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Mar 01, 2012, 08.50 AM IST | Source: CNBC-TV18

Ad-mad world? Not really so in 2011, but 2012 may be better

The Indian media and advertising industry is feeling the pinch of the global slowdown. It grew just 8% to cross Rs 25,000 crore in 2011, and is expected to grow just 9% in 2012. But Animesh Das reports that the second half of the year may bring some cheer.

Animesh Das, Reporter, CNBC-TV18

The Indian media and advertising industry is feeling the pinch of the global slowdown. It grew just 8% to cross Rs 25,000 crore in 2011, and is expected to grow just 9% in 2012. But Animesh Das reports that the second half of the year may bring some cheer.

First the facts: The annual pitch Madison media advertising outlook shows that in 2011, the industry grew a paltry 8% against an estimated 17% and this sluggish growth is expected to continue in 2012. The report says the industry will grow at 9% in 2012, with overall revenues crossing Rs 28,000 crore.

However, the advertising fraternity remains confident this sluggishness is just a passing phase.

"India is a growing economy and you can't hold this growing economy down for too long, says Sam Balsara, CMD, Madison World. We think we've had a bad last half of 2011, 2012 has also started not on a very optimistic note. So we think after a gap of one year after slowdown, the second half of the year should really pick up."

CVL Srinivas, chairman of Starcom MediaVest Group agrees. I think sooner or later, we will start seeing a few business-friendly policy announcements being made by the government in the area of retail, particularly. He believes that once we see softening of interest rates and inflation comes under check, offtake shall improve. If the recent performance of the stock market is any indication, then obviously, the sentiment is only going to improve," he points out.

Here are more findings from the report:

It says television will continue to enjoy the lion's share of the Indian advertising pie and will maintain its 10% growth rate.

Budget cuts in key sectors like Banking & Financial Services, real estate and education, however, could bring growth in print advertising to just 6%. 

Online advertising is in no danger and is expected to grow a whopping 50%. This should help it overtake radio, outdoor and cinema advertising to become the third largest medium.

"Digital has been growing significantly over the last few years and we consider it an extremely important part of us communicating with our customer base, and yes, we will certainly be spending more in real terms and also as a percentage of our marketing spend on it," says Nigel Wark, executive director -  marketing, sales & service, Ford India.

For the media and advertising industry, 2011 brought back memories of 2009 - the year of the slowdown. The drop in print, the flat 2% growth of radio and plummet in outdoor spends signaled low faith in these media, but it is not all doom and gloom. The consensus for 2012 is that advertisers will continue to be cautious, but won't completely put the brakes on spending.

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