Warc Blog

Digital no threat to Indian TV

16 April 2014
MUMBAI: Digital advertising is growing fast in India but print and television will continue to dominate adspend for some years to come a new study has said.

A media sector report from IIFL's Institutional Equities, reported on Indiantelvision.com, outlined how digital advertising expenditure had been increasing more than three times as fast as the overall market over the past decade, at a 43% compound annual growth rate compared to 13%.

Digital's share of the total had risen from 1% to 7% during this period and was now valued at Rs 25bn.

The trend would continue, the report said, as the internet user base carried on expanding and more advertisers accepted the new platform.

But even with this stellar growth rate, the dominant position of traditional media such as print and television would not be challenged in the short term. Digital still had limited reach, while a lack of fresh and vernacular content were further limitations; for now its role would be to complement older media.

In the medium-to long-term, however, print was most at risk, especially that in English. The sector has already seen growth slow markedly in recent years, from 16% CAGR between 2003 and 2007 to just 4.5% CAGR in the past three years, as some big-spending sectors, including banking, financial services and insurance, telecoms, and consumer durables, cut their adspend.

The report authors argued that TV was a more resilient medium. It had large audiences and a diverse viewer profile and further benefited from being more suited to certain types of advertising such as new product launches or brand building, all of which would help it withstand the twin challenges of a slowing economy and a growing digital sector.

Television was heavily reliant on just three categories, however, with FMCG, consumer durables and automotive making up 65% of its advertising expenditure and as their spending slowed, so television ad spend growth was expected to soften to high single digits.


Data sourced from Idiantelevision.com; additional content by Warc staff

 
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