We are extremely bullish about adex in India: Sameer Singh
Compared to a 3.6 per cent adex growth globally, India is expected to see the fastest adex growth at 14 per cent in 2019, as predicted by GroupM in its futures report ‘This Year, Next Year’ (TYNY) 2019. TYNY forecasts India’s advertising investment to reach an estimated Rs 80,678 crore this year.
Sameer (Sam) Singh, CEO, GroupM South Asia, sees private consumption and government spending continue being the bedrock in terms of GDP consumption. A turnaround is also seen in terms of private investment and that seems to be picking up. The third most interesting thing is that current estimates for January seem to indicate a normal monsoon for 2019.
With 2019 being the year of the Lok Sabha Elections, there will be an escalation in political ad spends, of which digital is expected to have a sizeable share. As shared by Prasanth Kumar, Chief Operating Officer, GroupM South Asia, “We are expecting spends to be almost 50/50 between special events and elections. Closer to 20-25 per cent will actually go to digital media.”
When asked whether taking out the macroeconomic factors and election spends would mean that brands have not increased their spends, Kumar explained, “The point that we have made is that organic growth would be around 11 per cent, and adding election spends of 3 per cent to that would bring it up to 14 per cent. It is also a factor of the supply and demand. We have to look at it from a comprehensive standpoint.”
For Sam Singh, the elections and the ICC Cricket World Cup happening at the same time is not a typical phenomenon. He further said, “The deconstruction of the 14 per cent (11+ 3) does not mean that if the elections and the World Cup were not there the number would be 11 per cent. We are looking at a very different marketplace then, so that would be a much higher number.”
With the new tariff regime coming into force recently, both Kumar and Singh felt that it was too early to predict whether a decline in adex would be seen, as it would require some time for the viewership patterns to emerge. “It’s not just supply and demand, but the need for advertisers to reach the audiences. We are not seeing much change in that, however, only when the viewership data comes out we will be able to say,” they added.
When asked what made them so bullish on print media, the two senior GroupM executives replied, “There are many assets available to print publishers every month. We all know it is a challenging aspect for print. But what we’ve seen is that some of the practices which we mentioned – whether it is outcome based or solution based, and also the fact that there is a hike in government spends and with the opportunities rising for advertisers – are actually the reasons why we are seeing growth in print.
We work with multiple partners in different formats: Prasanth Kumar
You have talked about content becoming more important because of the new regime. You also spoke about how agencies should collaborate. Can you elaborate on that?
Content is obviously a pull factor for consumers. When you give consumers the choice to pick and choose what they want to watch, the right content will help them make the right decision. Therefore, serving the consumer with good content is relevant. In the entire ecosystem, we are a critical stakeholder. It helps the client also to be associated with the right content.
Would you be investing monies in content via partnerships?
We work with multiple partners in different formats. For the solutions that we provide our clients and the solutions that we provide our partners, we assess the good opportunities and try to see how we can improve that. All that really helps fuel the viewership.
What is geo targeting technology?
We have technology that helps us see the correct TV consumption. All this actually helps us define a sharper target audience. It has led to the emergence of programmatic TV as a platform.
How is programmatic going to help in TV?
In that context it is about having multiple options. What are the eyeballs? Where do you want to reach? How sharply you want to reach?
In 2019, where are brands going to spend the maximum money?
The breakdown remains the same – 48 per cent will still be on TV. We are yet to see the changes post the implementation of the new tariff regime. At the end of the day, nobody knows what’s going to happen.
While the new regime kicks in, will you only be looking at the BARC data or other data as well?
We will be looking at all relevant data. At the end of the day, we are responsible for client spends. The ecosystem stakeholders also recognise that and they also respect it. Today, multiple sources of data points are assessed and synthesised to see what best can be done.
Do you envisage an advertising blackout?
I’m not so sure because first of all, there is no data blackout. Which means the stakeholders have come together to assess what is going on and been responsible enough to look at these in the appropriate form. Secondly, why should there be a blackout? After all, this is not a short-term industry.
Will media planners relook at their strategy for the coming weeks?
We have a situation where there are viewership changes on a weekly basis. We keep on doing it anyway in a regular manner.
In the March-June quarter of FY20, how do you think the ad spend pie is going to be distributed?
There will be a spike in news and sports for sure. We will see some of the regional players getting benefitted.
Television is a vibrant ecosystem, but print is evolving too: Sam Singh
Where do you see the 14 per cent growth in adex coming from?
There are two growth trends that we have kept in mind – one is the secular long-term growth of about 13 per cent and the 14 per cent number is a bump up. The second one is that the last year’s 15 per cent growth was on the back of a slightly softer 2017 because of the various one off events that had happened. So, I actually see it as a pretty solid progression in the same direction. It is 2X of GDP growth at 7.57 per cent, which is the highest of a country in the world. This is on the back of very strong consumer & government spends, a favourable Interim Budget, and promising monsoon forecast for 2019. We see a turnaround happening on the expense side. All these things add up. When compared to other countries, India is at No. 10 in terms of size of advertising expenditure, but No. 3 in terms of growth and No. 1 in terms of actual growth rate. Thus, India YOY is playing a much larger part in the global ecosystem. Therefore, we are extremely bullish about adex in India.
Where do you see brands putting in their money? Since digital and television are looking more or less neck and neck, what will the trend be in 2019 to see where the money is going? Will it be skewed towards digital?
As we have indicated, digital will continue on a 30 per cent growth year on year, while TV is expected to see about 15 per cent. In terms of the share of the total market, TV is significantly larger than digital even today. So, compared to TV’s 48 per cent share, digital’s share is 20 per cent, while print has a 28 per cent share.
Television is a very vibrant ecosystem. In fact, India is the only large market where every medium, including print, is growing. It is often on the back of strong economic and consumer fundamentals; the entire country is seeing growth in terms of purchasing power of consumers and growth in living standards so that is what is driving adex.
With TRAI’s new tariff regime kicking in, are you seeing some hesitation among clients in putting in their monies in different genres in television?
We just need to be more vigilant, because remember that from a data point of view it hasn’t been used yet. So, it’s a wait and watch for everybody; I suspect there would be an “if then” kind of conversation going on. However, I think a few things will remain – the fact that consumer spends are on the rise, brands are growing, and TV is still going to be the No. 1 medium when it comes to reaching out to people. What I do not expect to see is the large screen going dark inside homes. I think that is highly unlikely.
Do you see OTT consumption growing at the back of this new regime?
Television in India is unique in the sense that single TV households are prevalent. I think what OTT has done is it has given more choice in the house; by the way, a lot of the OTT consumption is of the television players. You need to keep in mind that digital consumption is not just fueled by UGC.
What keeps you so bullish on print?
We have forecast print to grow about two percentage points. I think there’ll be certain externalities that play a role in that, including the upcoming elections; we can also factor in the DAVP ad rate change, which will have its own impact.
You also spoke about print experimenting with new models, outcome-based solutions. Could you elaborate on that?
Few of these concessions play out when print is saying it’s not just about buying spaces, but also the impact that the medium has on clients’ businesses. And even if that’s not a commercial conversation, it is certainly more of a measurement and informational conversation. I think print is learning from some of the digital players, where if we wind back five years ago these were the type of concessions that played out. Thus, print is learning and is looking at different models for different verticals. How do I attract money from FMCG Vs Techplayer Vs Auto Vs Retail? They are evolving and that is a great for the print business.