 "2015 ad growth to be higher on stronger first half")
This figure was higher than the under 10 per cent growth the Rs 43,000 crore advertising industry saw in the last few years, they added.
“There has been an uptick and we will see good double-digit growth,” said Ashish Bhasin, chairman and chief executive officer, South Asia, Dentsu Aegis Network. His forecast of 12 per cent growth is in line with industry estimates.
Typically, the first half of a calendar year tends to be weak for advertisers because of the festive season that dominates in the second half of the year. “But this year, there was the cricket World Cup and despite the eighth edition of the Indian Premier League following immediately, there was no advertiser fatigue,” said Jai Lala, head of trading and partnerships, central trading group, GroupM.
Advertising revenues from the cricket World Cup this year were in the region of Rs 600 crore. While this is lower than the Rs 800 crore during the 2011 edition of the World Cup, which was won by India, when taken along with the IPL, the total revenue for the first half rises significantly.
Media agency executives said revenue from the eighth edition of IPL was around Rs 900-1,000 crore. Four years ago, revenue from IPL was around Rs 600 crore, they added.
“Besides, you also have e-commerce, which continues to be a strong advertiser,” said PM Balakrishna, chief operating officer at Allied Media, the media arm of the Percept Group. “This category will continue to be among the leading advertisers thanks to their need for brand-building,” he added.
A Rs 200-300-crore category about a year-and-a-half ago, e-commerce advertising is now over Rs 1,000 crore. “E-commerce, along with telecom, banking and finance, automobiles, durables, and electronic goods, will drive festive ad spends in the second half,” said Manas Mishra, formerly with Lintas Media Group, who now runs his own agency Mediant Communications.
“We will now see the true benefits of the new government. The benefits of legislation in sectors such as telecom, metals and minerals will translate into more advertising and marketing by these categories. There is also a mild revival in the automobile sector, coupled with new legislation in real estate, which will encourage companies in this space to open their purse strings,” Mishra said.
Fast-moving consumer goods (FMCG), which till a few years ago was the most dominant of advertising categories, is also expected to bounce back in the second half of the year. This is despite the fact that packaged food companies may not be very prominent during the festive season owing to the lack of new products, approvals for which are due from the food regulator.
The recent ban and recall of Nestle’s Maggi noodles also prompted packaged food companies to be cautious in their advertising, media agency executives said.
The prospect of a few initial public offerings hitting the market in the second half of the would also drive up advertiser spending, media industry experts said. Indigo Airlines and Cafe Coffee Day have filed documents with the Securities and Exchange Board of India to tap the capital market. Stock market sources said more companies wanting to raise funds might look at initial public offerings.
GROWING STRONGER
- Estimated ad growth for 2015: 12%
- Ad growth in the last few years - under 10%
Growth factors - Stronger first half in 2015: Ad revenues pegged at around Rs 1500-1600 crore.
- Last year: First half advertising pegged at around Rs 1,200 crore
- Second half of 2015 expected to be led by festive advertising as well as IPO advertising