GroupM's TYNY expects 12.6% growth in 2015

Recently, GroupM which is one of the leading global media management investment conglomerates released its biannual advertising expenditure futures report This Year Next Year (TYNY) in a plush property in town. While the report was a forecast of India’s advertising investment which is estimated to reach a whopping INR 48,977 crores in 2015, the report also represents a growth of 12.6% for the calendar year for all media spends as compared to last year’s growth of 12.5%.

At the onset, CVL Srinivas, CEO, GroupM, South Asia said that there is a lot happening at the macro level. He mentioned that all their agencies Mindshare, Maxus, Motivator, MEC and Mediacom have done a substantial amount of business in the last calendar year.

He adds that 2014 has been one of their best years yet with a lot of growth in terms of revenue & PBT growth, digital growth, awards, talent retention, Training and development, new products, partnerships and new businesses. While new businesses had a billing of about INR 1000-1200 crore, there were new partnerships with Facebook, Google and Huffington post to name a few.

He adds, “All of us live in such a fragmented world that marketing is getting difficult, and we want to de-fragment the same. That’s what we’re here for.”

With this he sets the tone for the event for his team to highlight key trends and focuses for the year to come.

Insights from the GroupM team:

Prasanth Kumar, Head of GroupM's Central Trading Group and a member of GroupM's South Asia Executive Committee said, "The Global growth in the ADEX which was at 4.9% and touched about 538 Billion USD." Speaking about the Indian ADEX he mentions that in 2015 it will touch 49000 Crore.

Commenting about the individual growth in each media, he tells us, "TV is expected to grow at 16%, print at 5%, Digital at 37%, OoH at 4%, Radio at 11% and Cinema at 20%. On an average there will be a 12.6% in all media."

On the Digital media mix front he said, "It is expected to be 9.5% in 2015."

While in 2015, the demand is likely to be more on TV, the growth drivers in this will be Telecom, Auto and e-commerce companies. On the trends front in TV, there have been new channel launches; south genres will continue to witness adoption of national content; Advertising in this sector is likely to gain momentum in the market, smaller advertisers will join TV; the HD space is getting more crowded; the ICC Cricket World cup is going to witness increased advertisers interest and lastly the Phase 3 digitization is likely to impact viewership in the latter part of 2015."

Lastly Prasanth talks about the trends in 2015 for Print and Radio where he says that, "Hindi Print to dominate growth; phase 3 radio roll out will help markets reach media dark markets; and lastly consolidation spree to continue across print and radio houses."

Milind Pathak, CEO MADHouse tells us about Mobile trends in 2015 where he said, "Mobile will aid in multi screen planning. He adds, "The key highlights of Mobile are 1. Mobile has the potential to compliment other media; 2. Mobile will provide the biggest platform to communicate with consumers in rural and lastly 3. Native advertising will bite into share of standard banner advertisement."

Vinit Karnik, National Director - Entertainment, Sports & Live Events at GroupM speaks about top three trends in the space that he is in. He said, "First one being, blurring the gap between entertainment and sports; and try to tap different sectors. We see a blurring gap because entertainment superstars today own sporting franchises. So that's definitely a trend that we see going forward."

He adds, "From advertisers to sponsors is the journey that we see. Advertisers include sponsored content on television. We see that getting translated to sceptical as well. The third one being from going “ASSOCIATIVE” to “associative + Integration + Surround + Social.” We all want to see surround content, see more background and what happens behind the dressing rooms."

Atique Kazi, Head Xaxis India tells us about "Demystifying Programmatic". He said, "About 50% of the ad budgets are moving towards programmatic. Normally our marketing strategy is sample based and on the internet what happens is, whenever you search a data point that data point can easily be converted into what users are interested in and what they're not." He adds on to why one needs programmatic, "If we see the number of channels we have today there are about 728, when it comes to print publications there are about 80000 print publications and when it comes to the number of websites, the number actually goes into millions. So in order to manage this we have a publisher’s side which is the supply side platform and the advertiser’s side which is the demand side platform and these two sides work hand in hand to fulfil each other’s needs."

On a concluding note to the session, Kazi adds, “All advertising is going digital. All digital is getting programmatic.”

Key Highlights:

As per GroupM’s in-depth research of the Indian media industry, digital media continues to show the maximum growth with 37% in 2015. Digital has been growing at an average rate of 35% over the last two of years. This year within digital media Video, Mobile and Social will be the biggest growth drivers.

Television shows a higher growth percentage in 2015 compared to last year with 16%. TV channels will especially be bullish with cross media integration via their own digital platforms. The big ticket event this year is the ICC Cricket World Cup in February and March, with scope for programming and advertising innovation during the tournament.

Even with pressures on advertising revenues, the print medium shows an increase by 5.2% as against the 2014 estimate of 7.6%; however print magazines continue to be on the decline, as several are looking at digital delivery mechanisms.

The surprise element in the media mix has been cinema advertising which finally closed 2014 with a 25% increase. This year too, GroupM estimates this media category to grow at 20%, as multiplex chains consolidate, leading to a more organized and accountable environment. With technology fuelling exhibition and distribution, especially in smaller towns, consumers will get a better viewing experience.

This Year, Next Year, is part of GroupM's media and marketing forecasting series drawn from data supplied by holding company WPP's worldwide resources in advertising, public relations, market research, and specialist communications. The TYNY report is the most comprehensive understanding of the estimated media spends by advertisers in the current year. It also highlights some of the industry sectors that will have a major effect on advertising spend across media.