Zenith Media's Ad Forecast foresees growth for television and radio in India

By , agencyfaqs! | In
Last updated : July 19, 2002
Despite advertising expenditure falling across the world, there seems to be some light at the end of the tunnel for Indian agencies

Hope of a 2002 recovery seems to be fading, as advertisers are still reluctant to make long-term spending plans. That is the crux of the latest Ad Forecast, released recently by the Zenith Optimedia Group.

Despite this gloomy picture, the study predicts a recovery in the Asian market excluding Japan, which is good news for an already beleaguered ad industry in this part of the world.

In India, the total advertising expenditure in 2001 was pegged at Rs 8,201 crore increasing to Rs 9,043 crore in 2002. The study predicts the figure to go up to Rs 10,247 crore and Rs 11,609 crore for the next two years, all of these indicating an upswing (Table 1).

Of the total ad spend, print got the maximum attention with Rs 3,985 crore and Rs 4,348 crore allocated to it in 2001 and 2002, with a further Rs 4,822 crore and Rs 5,396 crore predicted to be pumped into this medium in the next two years.

Interestingly, even though print seems to be the largest medium in terms of spends, Zenith Media predicts that television is likely to attract much of the new expenditure, with its share expected to increase from 40.7 per cent in 2001 to 41.8 per cent in 2004.
Radio, the study claims, will be the fast-growing medium over the next few years as private radio stations are launched in metropolitan areas.

Advertising as a percentage of Gross Domestic Product (GDP) is likely to touch 0.38 per cent in 2004, from a steady 0.36 per cent in 2001 and 2002. In 1990, advertising was 0.28 per cent of the GDP.

The study also claims that with business confidence slowly reviving after a slowdown last year, sectors such as telecommunications, pharmaceuticals, insurance and cars should increase their advertising expenditure over the next six months. Besides, with tariff barriers coming down, as agreed in the last round of WTO (World Trade Organisation) negotiations, foreign goods are likely to flood the marketplace, forcing Indian companies to increase their ad spends to keep pace.

On the international front, however, global advertising shrank by over 6 per cent in real terms in 2001. The global annual ad market for major media peaked in 2000, which, according to Zenith Media, could go down in 2002, having contracted by $23 billion in real terms. Of this, only $3 billion may be retrieved in 2003 and a further $7 billion in 2004.

Moreover, gross advertising billings for the first quarter of 2002 showed negative growth rates over the same period last year. Germany, for instance, registered a decline of 5.3 per cent, the UK a fall of 4 per cent. The tally for other countries stands at Spain (-5.2), France (-0.7), Italy (-5.8) and Japan (-6.0) respectively. Only the US market showed a positive increase of 0.2 per cent over the same quarter last year.

This hike has been attributed to the network television market enjoying a well sold out February Olympics. Besides, advance sales for the new season beginning September has been quite strong. However, a majority of the increase represents dollars held back from last year's budgets rather than an organic increase in total spends, and advertisers can revoke these advance purchases during the season (Table II). © 2002 agencyfaqs!

First Published : July 19, 2002
Search Tags

© 2002 agencyfaqs!