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Gaurav Laghate | Mumbai February 02, 2013 Last Updated at 17:36 IST

2012: year of muted growth in ad spends

Overall ad spend by advertisers up 4% to Rs 34,724 cr. TV sector saw 3.1% growth, newspapers saw just 2.4% over 2011 Contrary to the expectations of the media honchos, who were betting an advertising expenditure (AdEx) growth of over 8-9 per cent at the beginning of last year, the actual growth in AdEx, across sectors, in the calender year 2012 had remained at a mere 4 per cent. Incidentally, many media agencies had revised the forecast downwards in June 2012, but the actual figures came out much lower even after downgrade. As per the Indian media forecast by largest Indian media agency GroupM's latest report This Year, Next year CY 2012 closed with an AdEx growth of 4 per cent compared to CY2011, with a net revenue of about Rs 34,724 crore. The first half of 2012 was quite sluggish and the economic climate was not as we anticipated. Also, in the first falf of 2011, we had Cricket World Cup and IPL, which saw significant ad spends. But in 2012, the IPL spends were far less, T Gangadhar, MD of media agency MEC India said. As per media pundits, the absence of Cricket World Cup and lacklustre performance of IPL in 2012 jointly gave a setback of Rs 900-1,000 crore to TV medium alone. GroupM is expecting that the AdEx will grow at 9% in CY2013, as a recovery is visible in financial services and some other sectors are also expected to perform better. Gangadhar explained, Advertiser categories like telecom, financial services, automobiles and consumer durables had reduced spends in the last year. We are expecting a revival in 2013. Telecom, automobiles and consumer durables also are expected to spend more in this year./ Also, there is some action in real estate. So we estimate a 9 per cent AdEx growth in 2013. However, there are agencies, which are not so bullish on the forecast. There is a definite slowdown not just in minds but hard numbers too. AdEx is directly linked with the GDP growth. And now that there is an overall pressure on margins and consumers dont have enough disposable income, we do not see a major change in 2013 either. The indication from the clients and our gazing in the first quarter shows that the ad spend budgets will shift from ATL (above the line) like TV, and print to more BTL (below the line) activations like on-ground and digital. Spends look stagnant for 2013 as of now, Sulina Menon Executive Director, Starcom India opined.

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Television TV as the medium saw only 3.1% growth over the year ago to Rs 14,461 crore as per GroupM report. However, it is expected to grow at a much faster pace, 12 per cent in 2013, the report predicts. Newspapers As a medium, dailies saw just 2.4 per cent growth over 2011 to Rs 13,622 crore. The growth expectation for 2013 is kept at 5 per cent as automonbiles and financial services are expected to increase spends. Radio Another year went by when radio broadcasters kept waiting for the phase III auctions. But the medium for advertisers remained sluggish at 5 per cent to Rs 1,530 crore. The sector is expected to grow at 7 per cent in 2013. OOH One of the worst hit sector was Out of Home, which saw just 2 per cent growth in adEx growth in 2012, against a 6 per cent which was expected. Next year it is expected to grow at 6 per cent Digital and cinema as medium saw robust 28 per cent and 15 per cent growth respectively in 2012. In 2013, digital medium ad spend is is expected to grow at 30% while forecast for Cinema sector is 15 per cent.

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