MUMBAI: TV adspend in India registered growth of just 11% in the first half of the year and the decline against earlier projections is pulling down the whole advertising market, a new report has revealed.
Pitch Madison, one of the leading media agencies in India, predicted earlier this year that TV adspend would grow 20% in 2016, but with growth of just 11% in the first half of the year, it has now revised down its full-year projection to 11%.
The relatively slow growth in TV advertising expenditure has also left its mark on the total Indian ad market, which grew at 12.9% in the first half, and Madison Media now expects reduced growth of 13.2% for the full year compared to its original projection of 16.8%.
"The drop in growth rate of television advertising does not augur well for the economy as generally a spurt in adspend leads to higher GDP growth," said Sam Balsara, Chairman of Madison World.
The report said the revised 11% growth for TV adspend "compares poorly" with the 35% growth rate achieved in the first half of 2015 over the same period in 2014.
And it attributed the decline to falls in e-commerce advertising (down 23% year-on-year) as well as certain consumer categories, such as jewellery (-7%), travel and tourism (-4%).
Overall, TV advertising is now expected to generate Rs. 19,160 crore in 2016, down from Madison's original projection of Rs. 20,713 crore.
In turn, the total market is expected to generate Rs. 49,812 this year when it was originally forecast to grow to Rs. 51,365 crore.
On a more positive note, Madison Media has kept its double-digit growth projections for all other media and emphasised that TV is expected to be the only one to record slower growth this year.
Commenting on the findings, Vikram Sakhuja, CEO of Madison Media & OOH, said: "The drop in growth rates in TV is led by a lower contribution of e-commerce, which is a category known to pick and choose high priced inventory/impact programmes, and substituted by FMCG users who resort to everyday advertising and seek high value for money."
Data sourced from Madison Media; additional data by Warc staff