GroupM: Media growth rate to drop by 50 % in 2009

Sumedha Srivastav - Televisionpoint.com | Mumbai
Advertising in mediums like magazines and cinema will see a steep decline in 2009, while spends on the outdoor are unlikely to grow. Television and newspapers will see only a marginal growth in advertising spends, and the average growth rate across media will drop by 50 per cent in 2009.

The forecast has been made by GroupM, the media arm of the world's leading communications agency WPP, in its study titled 'This Year, Next Year'. The report predicts that the growth story of the Indian media will go back to the 2001 level when the industry grew at 9 per cent.

It may be noted that generally in the month of April, GroupM comes out with its annual report 'This Year, Next Year'. But a combination of factors, led chiefly by the economic slowdown, has forced the agency to depart from the practice and issue a revised, interim report now. The final report is expected in April.

In its outlook on the Indian media and entertainment industry, the GroupM study says that the overall size of Indian advertising industry is set to touch Rs 24,900 crore in 2009 compared to Rs 22,864 crore in 2008, thereby registering growth by only 8.9 per cent, which is half the growth rate of 16 per cent in 2008 over the year 2007.

In 2000-01 period when the size of Indian advertising industry was about Rs 7,000 crore, the year-on-year growth stood at about 9 per cent, similar to the projected growth rate for 2009. Thereafter, the advertising industry has grown in high double digits and the maximum growth was in 2007 when the industry grew 22 per cent.

Comparing 2009 projections with the revised figures for 2008, TV advertising is expected to grow by about 11 percent – from Rs 8,400 crore in 2008 to Rs 9,353 crore this year.

Newspapers, which accounted for Rs 10,033 crore in 2008, are expected to account for Rs 10,775 crore this year, a miniscule growth of 0.7 per cent.

Radio is expected to grow its advertising business by 12 per cent, from last year's Rs 880 crore to Rs 1,056 crore in this year.

Unlike TV, radio and newspapers, and despite the upward revision from the April 2008 forecast, the ad spend on magazines is set to experience a decline in growth. The report predicts that in 2009, magazines will register a 10 per cent decline in their ad revenues, down from last year's Rs 803 crore to Rs 722 crore.

Cinema, too, stands to lose out this year. In 2008, cinema accounted for Rs 80 crore, but it will slide to Rs 72 crore this year.

Out-of-home media (both retail and OOH) will grow slightly. The sector is set to become a business worth Rs 2,072 crore in 2009, whereas last year, the sector accounted for business worth Rs 2,038 crore.