Indian ad market set for rapid growth

30 July 2010

NEW DELHI: The Indian advertising market is set enjoy a surge in demand over the next five years, with television and the web driving the trend.

According to PricewaterhouseCoopers, the consultancy, the entertainment and media industry in India will grow by an average of 12.4% per year during the period to 2014.

This marks a recovery from the expansion of just 2.2% in 2009, when advertising expenditure was flat and the film sector saw figures fall.

"With confidence returning alongside a likely increase in consumer and advertisement spends, the E&M industry is looking to get back to its high growth trajectory," Timmy S Kandhari, leader of PwC India's entertainment and media practice, said.

"Addressability of distribution platforms, digital transmission, regional as well as differentiated content and of course rational regulation will be key drivers of E&M market in the forseeable future."

Within this, television revenues, including subscriptions and advertising, were predicted to climb by 12.9% from 265.5bn rupees to 488bn rupees between 2010 and 2014.

TV should take a 46% share of all ad sales by the latter of these dates, compared with the level of 41% held by this channel at present.

Circulation and advertising for print titles will deliver an uptick of 12.2% a year from 2010–14, giving newspapers and magazines an income of 230.5bn rupees.

As greater numbers of brand owners are expected to promote their products on radio, the medium's takings are anticipated to rise from 9bn rupees to 16bn rupees.

Outdoor is in line to experience a similar leap, from 12.5bn rupees to 21bn rupees, but its share will remain largely static.

Internet advertising revenues were forecast to improve by 20.1% every 12 months, as the web more than doubles in size from 6bn rupees a year and 15bn rupees a year.

Overall adspend will post a CAGR of 11.4%, despite the fact digital is struggling to achieve the central role it has rapidly assumed elsewhere.

"Although there is consistency in inevitable migration to digital, the change continues to vary by market," said Marcel Fenez, Global Leader, entertainment and media practice at PricewaterhouseCoopers.

"Uptake in digital media could be different in a country like India due to local factors around infrastructure as well as affordability."

PwC also partnered with AIDEM Ventures to survey chief executives in the E&M segment, in order to gain an insight into their views.

"On the whole, Indian media CEO confidence is rising from where it was a year ago," Ray Nayak, the managing director of AIDEM Ventures, said.

"They are now cautiously optimistic about generating revenue growth in the near term and decidedly more confident of their long term prospects."

Data sourced from India Infoline; additional content by Warc staff