Slow economy affects adex: GroupM report

By afaqs! news bureau , afaqs!, Mumbai | In Advertising | September 18, 2013
Earlier, the estimated growth rate was 7.3 per cent for H2. The revised figure is 4.7 per cent.

GroupM has released a report that indicates that growth in adex (advertising expenditure) rates during H2-2013 (between July and December this year as opposed to the same period last year) will be less than originally predicted. This can be attributed to both, a slow economy and a weak rupee.


Specifically, the report indicates that H2 adex has slowed down to 4.7 per cent from the earlier figure of 7.3 per cent. Here is a break up from a media channel perspective. The first figure indicates the originally estimated growth rate; the second figure indicates the revised growth rate: TV (7.6 per cent, 5.9 per cent), print (4.8 per cent, 0.7 per cent), radio (5.7 per cent, 2.5 per cent), cinema (21.4 per cent, 12.2 per cent), OOH (3.8 per cent, 3.8 per cent) and digital (30 per cent, 30 per cent).

As indicated by these figures, print is expected to be most adversely affected. The report retains its original growth estimate for digital at 30 per cent.

Under the 'Categories Growing' section, the report states that political parties and government spends will increase owing to General Elections in 2014 and State Elections in 2013. Further, media efforts for new channel and programme launches will continue. The auto industry is in for some action too, as many new launches are lined up in the forthcoming months.

Under the 'Categories Slowing' section, the report states that the FMCG segment is facing pressure on raw material prices and manufacturing processes. As far as telecom goes, handset manufacturers are expected to be heavily dependent on imports of smartphones and feature phones. For the BFSI (banking, financial services and insurance) category, the report simply states: 'Interest rates not relenting, financial markets under performing'.

From an annual perspective, the original growth estimate for 2013 was 9.9 per cent (that is, from Rs 41,264 crore in 2012 to an estimated Rs 45,334 crore in 2013). The revised figure is 8.46 per cent (that is, from Rs 41,264 crore in 2012 to an estimated Rs 44,755 crore in 2013). These amounts indicate gross media spends across TV, print, radio, digital, OOH and cinema.

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