GroupM revises cuts 2012 ad growth forecast to 6.6%

A weakening Indian economy has prompted GroupM, India’s largest media buying group, to cut its ad growth forecast for 2012, from 12% to 6.6%. CNBC-TV18's Animesh Das gets the details.
 
India's economic uncertainty is reflecting in advertising spends.  In its mid-year forecast, GroupM, has downgraded advertising expenditure in 2012 to Rs 3.5 lakh crore, from its January estimate of Rs 3.7 lakh crore. This 5.4% decline is because of the ad slump in the television industry.

Vikram Sakhuja, CEO - South Asia, GroupM says, “While print was always was expected to be pretty sluggish at about 6-7%. So that has remain unchanged. Digital is growing reasonably well, radio remains at about 9-10%. But the one big change is definitely TV, which is brought down from 14% to 6%.”

Though television is the most affected it is still expected to grow by 5.6% to gross Rs 1.48 lakh crore.  Newspapers and magazines will maintain their 5% growth to gross Rs 1.39 lakh crore. But industry players say that it will be tough to meet these expectations.

Ashok Venkatramani, CEO, MCCS adds, “The real big intervention which I think can change the course is that if the state of the economy improves as a direct consequence of some direct action by the government in terms of opening up the economy and attracting more inflow of foreign funds. If that happens and the mood lifts up both in terms of the share market as well as the general buoyancy because of the inflow, I see some amount of caution being dropped and people starting to spend.”

Arun Anant, CEO, The Hindu explains, “We are looking at special initiatives with advertisers which will give them a bit delivery for example we launched the luxury supplement which will give them a better delivery.”

While Radio, Cinema and Digital advertising have kept pace with Group M's initial projections, Outdoor advertising has not. And so, been revised downwards from 9% to 6%.

However, GroupM expects demand to improve in the second half of the year, especially as large spenders like Telecom get back in the game.