Indian adspend set to decline

03 September 2009

MUMBAI: The Indian advertising market will contract by 5% in 2009, having recorded double-digit growth rates in the last few years, a study by Madison Communications, the media agency, and Pitch, the monthly advertising magazine, says.

The Pitch–Madison Media Advertising Outlook 2009 predicts that Indian adspend will fall from 20,717 crore rupees ($4.2bn; €3.0bn; £2.6bn) in 2008 to 19,777 crore rupees this year, compared with expansions of 22% in 2007 and 17% in 2008.

It also found that total ad revenues reached just 7,452 crore rupees in the first half of 2009, a figure that will climb to 12,325 crore rupees in the period from July to December due to increases in both advertising volumes and media rates.

Newspapers and magazines faced a particularly challenging climate from January to June, when ad sales tumbled by 32%, while television also registered a decrease of 19% on an annual basis.

By contrast, the internet enjoyed an uptick of 16% in H1, seemingly confirming previous predictions that this channel will be one of the main drivers of growth in India over the medium-to-long term.

For 2009 as a whole, print revenues are set to fall to 9,039 crore rupees, down 8% year-on-year, with TV likely to remain static, at 8,319 crore rupees.

Outdoor will post a decline of 20%, to 1,419 crore rupees, with cinema also off by 10%, to just 116 crore rupees.

By contrast, the internet will see its totals rise by nearly 25%, to 453 crore rupees, with radio up by 8%, to 715 crore rupees.

Earlier this year, ZenithOptimedia estimated that Indian adspend would improve by 6.4% in 2009, a figure that GroupM pegged at 6%, although both of these companies had paired back their previous expectations.

Shashi Sinha, ceo of Lodestar Universal, part of Interpublic Group, argued that while there has been a slowdown in the Asian nation, advertising expenditure levels should still rise by between 3% and 4% in 2009.

"I believe we have seen the worst already. So yes, there would be growth, but limited growth. And this growth would come from consumer products and telecoms, two very strong spenders," he said.

Data sourced from Livemint; additional content by WARC staff