India faced headwinds from two successive regulatory distractions in the form of de-monetization (Nov 2016) and Goods & Service Tax (July 2017). This held back the economic growth to 6.7% in 2017 (8.2% in 2015 and 7.1% in 2016) and its lingering effects continued in the early parts of 2018. With the negative impact fading, the economy is on the recovery mode and IMF has forecasta growth of 7.3% in 2018 and a consistent 7+% growth till 2023 in its October 2018 report. Advertising expenditure per capita continues to grow from ₹ 515.3 in 2018 to ₹ 586.7 in 2019.
Good monsoon backed by minimum support price for crops boosted consumption in rural markets. Consumers got the benefit of lower tax incidence post GST. Digital access got easier and device penetration made a significant positive impact on sectors like e-commerce, auto etc. This growing consumption is attracting the attention of the marketers. Measurement of rural media consumption by BARC and IRS is encouraging advertisers to invest. With economic activity resuming full throttle,overall industry is brimming with positivity and all sectors including Media and Entertainment has shown buoyancy and growth.
Marquee events like IPL was a major revenue spinner despite aggressive acquisition cost. Extended festive period helped advertisers justify higher marketing investments. Magna estimates the ad market in 2018 to accelerate further compared to previous estimates and exit with a +14% growth(+1.5% higher than June 2018) notwithstanding the restraint caused by the natural calamity in southern part of India.
Digital is stimulating overall growth. High-speed broadband and online video is driving elementary changes. Though it is still a duopoly of Google and Facebook attracting >70% of the revenue, this will change the balance as OTT and E-commerce ad platforms are gaining scale and are increasingly attracting advertising monies. Advertiser’s confidence in the medium is very strong despite Face Book’s strategy to declutter ads on news feed followed by a rate increase and YouTube doubling rates for their premium assets. The market share of Digital will go up from 21% to 24% of total advertising spends with revenues touching ₹188Bn in 2019.
S Venkatesh, SVP, MAGNA India, “Digital is leading with +32.8% growth in 2019. Massive expansion in smartphone usage is shifting the consumption from collective to discrete. Streaming video will be the biggest gainer in terms of format and is estimated to double its revenue in 2019. Total revenues will grow from INR 687.75 Bn to INR 793.1 Bn.
Television has immense headroom to grow with 34% of the homes still being Non-TV as per BARC. While organic growth is absolute, cyclical events like ICC World Cup and National elections will generate strong advertising demand.Healthy distribution realisation with digitization gaining momentum will reduce dependence on advertising and aidbroadcasters demand better yield. Despite digital growth, TV continues to be dominant as it enjoys unmatched tor of audiences. With 40% allocation of advertising spends, TV will expand+15.4% in 2019 and will continue to grow CAGR +12.5% till 2023.
Print:Physical news delivery compared to global trend of negative growth has grown CAGR +1.9% in the last 5 years till 2017 as per ABC. Also the fact that readership has grown across age groups establishes print’s dominance, relevance and growth. English newspapers are facing stiff competition from Digital platforms and this drop in readers is offset by the growth in languages. Publishers are also gearing up to move beyond pure-play print revenue stream. Print will attract a larger pie of the political campaigning and Government spends because of elections. Real Estate and Education advertising reaching its earlier peak will help achieve growth of +6.2% in 2019.
ShashiSinha, CEO, IPG Mediabrands, said, “India is the only market in the world where Print continues to be dominant and is growing in all aspects – circulation, readership and geography. The medium is growing strongly on the back of language which has led to the growth in the number of language newspapers. Secondly, print is growing because of the credibility it offers in this era of fake news. There is no denying that there are platforms causing strain on Print but the attributes of well researched, in-depth content and authenticity can only be endorsed by Print and that makes the medium more credible and hence relevant for advertisers. In 2019 print will further emerge as a dominant force because of all the state elections and the general election and we expect the growth rate to be higher than 2018.
“Lot of investment is going on Print digital properties including Google’s product Navlekha. The digital edition measurement from IRS when reaches scale will help publishers monetize both forms of readership”, added Venkatesh.
Radio segment is facing surplus inventory because new station launches, in addition, music streaming apps have become easy to access because of fall in data prices. Fearing drop in listenership base, radio stations have cut down advertising load to increase engagement. While some of the networks have been able to increase rates, this approach is affecting top line growth with advertising revenue witnessing a jump of +12% in 2019. Automobile, finance, real-estate and E-commerce are primary contributors to growth with Government and political spends increasing during the election window.
For OOH it will be a promising year with major contributions from OTT and Mobile Apps along with Telecom and E-commerce. Government’s promotion of welfare schemes and Election spending will sustain this momentum. Estimated to recover with a +11.4% growth the category continues to be data scarce and shall hold 4-5% share of total spending.
|Media||2018 Estimated||2019 Forecast|
|In Jun 2018||In Dec 2018||In Jun 2018||In Dec 2018|
|Total INR Mn||678332||687521||768120||793148|
|Total INR Mn||687521||793148|