Campaign India Team
Feb 11, 2014

AdEx to grow 11.6 per cent: GroupM

Expects elections to boost spending by 2.5 per cent

AdEx to grow 11.6 per cent: GroupM
GroupM has released its annual report on estimated advertising expenditure ‘This Year, Next Year (TYNY) 2014’.
As per the report, the projected AdEx growth prediction is estimated at 11.6 per cent. The number is 1.6 per cent more than 2013. A significant part of the growth - 2.5 per cent - will come from elections alone, says the report.
Digital is expected to grow 35 per cent. Television follows with 12 per cent - a 1.8 per cent decrease from 2013. According to GroupM’s report, cinema’s growth remains constant at 12 per cent this year. Print is predicted to see a significant increase to reach 8.5 per cent growth, from 4.6 per cent in 2013. The rise in print’s growth is attributed to growth in vernacular print publications across the country.
CVL Srinivas, CEO, GroupM South Asia, said, “We are cautiously optimistic about the media industry in 2014. Sectors like FMCG, auto and retail will continue to see a stable increase in ad spends. We will see an increase in rural spending by FMCG and Telecom.”
He added, “The first half of the year will continue to be uncertain given the general economic and political environment, and ambiguity surrounding the measurement system. However advertising by political parties is expected to give a boost to the AdEx by upto 2.5 per cent. We envisage a stronger second half with an upsurge in ad spends.”
GroupM also launched mTrends, a reference book of media and communications opportunities in 2014. This list of 20 trends is a derivative of the TYNY 2014 report.
· Volume growth back for FMCG companies on the back of good monsoon and hence good rural income
· Raw material prices benign and hence more flexibility with advertisers
· Ad spends of most FMCG companies on the rise to ride on the back of higher disposable income due to election spending 
· Category growth story continues
 ·More players getting into the food & beverage segment
· E-commerce making inroads into small town India
· Regional players expanding getting into national arena
· Despite slowdown in the 4wheeler segment, bullish on entry level cars, sports utility vehicles and multi utility vehicles.
·2 wheelers to continue the focus on small town and rural India. Competitive intensity on the back of recent market developments leading to more launches by existing players and subsequently higher ad spends
· Smartphones penetration rising. Stiff competition in the segment to continue
· Phablets and connected devices gaining popularity
· Cellular phone service providers witnessing growth in revenue and ARPU. With service providers slashing prices for 3G schemes competitive activity expected to pick up in this segment
Banking, Financial Services and Insurance
·Revival expected in the segment on the back of likely rate reduction.
·IPO market to pick up pre-election owing to better market sentiments
·Recent RBI policies leading to a more favourable business environment
·New bank licenses likely to push AdEx of the category
Campaign India