Media to get boost on polls, other ad spend: GroupM

The media industry is expected to get a mega boost from political parties ahead of the general elections and a likely higher spending by key advertisers such as FMCG, telecom and auto during 2014 would translate into an overall 11.6 percent rise in total ad spend, says a report.

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“Advertising by political parties alone is expected to give a boost to the sector by up to over 2.5 percent. We envisage a stronger second half with an upsurge in ad spends,” media buying firm GroupM said in a report on Tuesday.

WPP Group-owned GroupM is the largest media buying firm in the country. WPP Group is the world’s biggest advertising company.

“Sectors like FMCG, auto and retail will continue to see a table increase in ad spends. We will see an increase in rural spending by FMCG and telecom,” GroupM Chief Executive (India and South Asia) CVL Srinivas said.

The firm said the first half of the year will continue to be uncertain given the general economic and political environment, and ambiguity over the viewership rating system.

Of the 11.6 percent increase in total ad spend, 35 percent will be in digital media which includes mobile, Internet and value-added services. This will be followed by 12 percent in TV, a drop from 13.6 percent in 2013.

Advertising in cinema will remain constant at 12 percent, while for the print medium there would be an increase of 8.5 percent, owing to growth in the vernacular publications.

The report said good rural income and benign raw material prices will give more flexibility to FMCG companies to increase spending on advertising.

The advertising expenditure is likely to increase this year in the retail sector on the back of more players getting into the food and beverage segment, e-commerce making inroads into small towns and regional players getting into national arena, it added.