 "FMCG companies' advertising gets a leg up")
Apart from a positive impact on fast moving consumer goods (FMCG) companies, low commodity prices have had a similar effect on media entities.
For, FMCG companies are a big advertising category. And, their ad spending, with the cushion provided by low input costs, grew 18.6 per cent for media companies in the quarter ended June, from the previous one. When compared with last year in the same quarter, the rise was more than double - in the June 2014 quarter, it had risen 7.2 per cent only.
Another prominent trend was that television ad revenue growth outpaced those of print and radio. This, says Abneesh Roy, associate director, institutional equities, Edelweiss, was in sync with the trend in recent quarters. "Ad growth across media segments like print and radio remained largely moderate, even as TV outperformed," he said.
Print companies' advertisement revenues were also partly impacted by the high base in the June 2014 quarter, which saw a high election-related spending, Roy said.
E-commerce's rise
Even so, while FMCG continues to dominate the advertising pie for media companies, some analysts say e-commerce is slowly emerging as a key contributor here. A point also made by Sun TV's chief financial officer, S L Narayanan. While FMCG gave
Sun TV a little over 50 per cent of its ad revenue during the June quarter, e-commerce was beginning to gain traction, he said, while declining to give numbers.
Flush with funds from investors and chasing growth aggressively, e-commerce as an advertising category has crossed Rs 1,000-crore in size. Much of this has been poured into TV and digital as e-commerce entities strive to induce top-of-mind recall among consumers. Analysts say this trend is expected to stay in the coming quarters.
While the break-up of digital ad revenues was not indicated by most media companies, some of them such as HT Media saw close to a 30 per cent growth in revenues from this segment. For DB Corp, a regional major and publisher of Dainik Bhaskar, digital or internet revenues grew 72 per cent, albeit on a low base.
As a percentage of India's total advertising, digital advertisements are 9.5 per cent, according to a recent GroupM forecast. This is slated to touch 20-25 per cent in the next five to seven years, by when digital advertising would have crossed Rs 10,000-crore in size, from Rs 4,661 crore now.
Among broadcasters, Zee's 25 per cent ad revenue growth in the June quarter got a boost from its new channel (&TV), as well as national and regional channels, analysts said. This is expected to grow in the coming quarters, they said.
Print companies HT Media, Hindustan Media Ventures and Jagran Prakashan had a 5-12 per cent growth in ad revenue in the quarter, though DB Corp saw a 10 per cent fall, with a rise in rates. Entertainment Network India, promoter of Radio Mirchi, saw subdued growth in ad revenue at eight to nine per cent in the quarter; rival Radio City saw 10.3 per cent growth, analysts said.
What of the future? Ad spends are expected to gain momentum in the run-up to the festive season, ensuring revenue growth for most media companies remains intact, says Chirag Negandhi, managing director, institutional equity research, Axis Capital.
In the past three quarters, revenue growth for most media companies has remained at 10 per cent, even as profit growth has been volatile. With a possible interest rate cut on the way, says Roy of Edelweiss, rate-sensitive sectors such as automobiles, banking & finance and real estate could raise their ad spends, improving the revenue of media firms.
For, FMCG companies are a big advertising category. And, their ad spending, with the cushion provided by low input costs, grew 18.6 per cent for media companies in the quarter ended June, from the previous one. When compared with last year in the same quarter, the rise was more than double - in the June 2014 quarter, it had risen 7.2 per cent only.
Another prominent trend was that television ad revenue growth outpaced those of print and radio. This, says Abneesh Roy, associate director, institutional equities, Edelweiss, was in sync with the trend in recent quarters. "Ad growth across media segments like print and radio remained largely moderate, even as TV outperformed," he said.
Print companies' advertisement revenues were also partly impacted by the high base in the June 2014 quarter, which saw a high election-related spending, Roy said.
E-commerce's rise
Even so, while FMCG continues to dominate the advertising pie for media companies, some analysts say e-commerce is slowly emerging as a key contributor here. A point also made by Sun TV's chief financial officer, S L Narayanan. While FMCG gave
Sun TV a little over 50 per cent of its ad revenue during the June quarter, e-commerce was beginning to gain traction, he said, while declining to give numbers.
Flush with funds from investors and chasing growth aggressively, e-commerce as an advertising category has crossed Rs 1,000-crore in size. Much of this has been poured into TV and digital as e-commerce entities strive to induce top-of-mind recall among consumers. Analysts say this trend is expected to stay in the coming quarters.
While the break-up of digital ad revenues was not indicated by most media companies, some of them such as HT Media saw close to a 30 per cent growth in revenues from this segment. For DB Corp, a regional major and publisher of Dainik Bhaskar, digital or internet revenues grew 72 per cent, albeit on a low base.
As a percentage of India's total advertising, digital advertisements are 9.5 per cent, according to a recent GroupM forecast. This is slated to touch 20-25 per cent in the next five to seven years, by when digital advertising would have crossed Rs 10,000-crore in size, from Rs 4,661 crore now.
Among broadcasters, Zee's 25 per cent ad revenue growth in the June quarter got a boost from its new channel (&TV), as well as national and regional channels, analysts said. This is expected to grow in the coming quarters, they said.
Print companies HT Media, Hindustan Media Ventures and Jagran Prakashan had a 5-12 per cent growth in ad revenue in the quarter, though DB Corp saw a 10 per cent fall, with a rise in rates. Entertainment Network India, promoter of Radio Mirchi, saw subdued growth in ad revenue at eight to nine per cent in the quarter; rival Radio City saw 10.3 per cent growth, analysts said.
What of the future? Ad spends are expected to gain momentum in the run-up to the festive season, ensuring revenue growth for most media companies remains intact, says Chirag Negandhi, managing director, institutional equity research, Axis Capital.
In the past three quarters, revenue growth for most media companies has remained at 10 per cent, even as profit growth has been volatile. With a possible interest rate cut on the way, says Roy of Edelweiss, rate-sensitive sectors such as automobiles, banking & finance and real estate could raise their ad spends, improving the revenue of media firms.