ZenithOptimedia media forecast 2009: TV and radio to grow faster than print

By Sangeeta Tanwar , afaqs!, New Delhi | In Media | May 06, 2009
However, print media which includes both newspapers and magazines will continue to corner a larger share of advertising pie

ZenithOptimedia, part of the Publicis Group, has released its annual media forecast report for 2009. The report predicts the advertising spends for media including newspapers, magazines, TV, radio, cinema, outdoor and the Internet.

The report provides advertising spends and revenue earned by various sections of the media for the past year and predicts the same for the current year. The report predicts healthy growth for selective media based on the observation that apart from less than enthusiastic performance by a few metros, well performing towns are fuelling the consumption demand by cushioning selective media from adverse effects of the current economic downturn.

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Speaking to afaqs!, Pavan Chandra, managing director, West and South, ZenithOptimedia, shares the methodology adopted for arriving at the forecast for various media, saying, "For arriving at advertising spends for listed media, we fall back upon trends of past 20 years and at the same time take account of the economic environment. For this year's projections, too, we have taken into consideration national as well as international economic conditions affecting the performance and growth of media."

The report puts the total advertising spends for the current year to be Rs 22,758 crore as compared to total advertising pie of Rs 21,380 crore in 2008. As per the report, this year, the advertising spends for newspapers and magazines will see a marginal increase, whereas TV and radio will register a greater increase in advertising revenue.

In 2009, newspapers and magazines will command a business of Rs 9,210 crore and Rs 1,295 crore respectively. Actual revenue commanded by both these media in 2008 stood at Rs 9,102 crore and Rs 1,142 crore respectively.

The report predicts TV and radio registering an increase in revenue for the year 2009 over the previous year. TV's ad-pie is estimated to be at Rs 9,302 crore, in comparison to the Rs 8,502 revenue commanded by it in 2008. Radio advertising will be worth Rs 754 crore this year as compared to its share of Rs 646 crore last year.

Even with comparatively less increase in advertising revenue, print will walk away with the larger share of total advertising pie for the current year in comparison to TV.

Advertising estimates for print, TV and radio for the current year have been derived from independent and internal research and study done by the media agency, whereas the data for revenue share by all the three media for 2008 is as per the TAM Adex data.

Chandra explains the dynamics behind TV promising an encouraging year ahead. "In sectors such as finance, retail and real estate that have taken a hit in the metros, the advertising scenario is bleak for these businesses. Other media such as, say, TV is less affected as it depends on FMCG, Telecom and health, which are considerably well off."

This year, cinema will clog revenue worth Rs 146 crore in comparison to business worth Rs 145.5 crore in 2008. Outdoor will command business worth Rs 1,596 crore this year as against actual business of Rs 1,492 crore in 2008.

Revenue forecast for the current year for two industries, cinema and outdoor, are based on estimates by ZenithOptimedia and other industry estimates. Revenue share for the previous year (2008) are also from ZenithOptimedia.

Internet is expected to deliver business worth Rs 455 crore, having delivered revenue to the tune of Rs 350 crore in the previous year. This year, the share of display advertising in the Internet advertising pie will be Rs 255 crore, while classified business will contribute more as it will bring in another Rs 109 crore. Another Rs 70 crore will be added to Internet's kitty by means of revenue contributed through search advertising.

Over the years, the Internet medium has seen a rise in revenue. In 2005, it had a revenue share of Rs 107 crore, followed by increasing shares in the subsequent years - Rs 210 crore (2006) and Rs 280 crore (2007). The revenue estimates for Internet media has been based on the data and predictions shared with ZenithOptimedia by the Internet and Mobile Association of India (IAMAI).

The media report provides interesting break-up of revenue shares between national and regional newspapers, along with advertising commanded by B2B and B2C magazines. For the year 2009, the report pegs total advertising attracted by newspapers to be worth Rs 9,210 crore. Out of this, national newspapers are estimated to corner revenue worth Rs 4,246 crore, whereas regional newspapers will make up for another Rs 4,964 crore.

However, in 2008, newspapers netted total revenue of Rs 9,102 crore. To this, national newspapers contributed ad-revenue of Rs 4,196 crore in comparison to Rs 4,906 crore added by regional newspapers.

While counting the contribution by national newspapers, the publications taken up for this purpose were The Times of India, The Economic Times, Business Standard, The Hindu, Hindustan Times, Dainik Bhaskar and Dainik Jagran.

In the past year, total advertising attracted by magazines was worth Rs 1,141 crore, which in the year 2009 is estimated to be worth Rs 1,295 crore. Within this, B2B (business to business) magazines added Rs 127 crore in 2008. For 2009, the estimates are that B2B will account for advertising worth Rs 144 crore. B2C (business to consumer) magazines, on sheer strength of their numbers, ended up adding actual revenue of Rs 1015 crore in 2008 and as per the predictions, will add nearly Rs 1,150 crore in the current year.

The ZenithOptimedia forecast also throws up some interesting figures relating to actual and estimated contributions of revenue by terrestrial and C&S media to the television business. For the year 2009, total revenue coming to the medium has been pegged at Rs 9,306 crore, out of which terrestrial business' contribution will be Rs 460 crore in comparison to the lion's share of revenue (Rs 8,841 crore) contributed by C&S.

In 2008, the total advertising revenue commanded by television stood at Rs 8,502 crore. To this, terrestrial TV's advertising share was Rs 421 crore against revenue of Rs 8,081 crore contributed by C&S.

Chandra also emphasises that with stress on higher and better ROI (return on investment) by advertisers, advertising platforms such as radio and outdoor will experience more traction.

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