PITCH - MADISON ADVERTISING REPORT 2016 Advertising industry will grow 16. to reach ` 51,365
Total size of media and advertising industry will be Rs 51,365 TV PRINT DIGITAL RADIO OOH CINEMA `20,713 `18,629 `6,656 `1,823 `3,010 `535 ASSOCIATE PARTNERS CO SPONSOR (Figures in Rupees denote size of each vertical after projected growth in 2016)
04 05 16. 17. 16. BOOM TIME FOR MEDIA The Indian media and advertising industry is growing like never before. In 2015, the industry grew by 17., exceeding our mid-year projections of 13.. 2016 promises to be yet another high growth year, with the market expected to grow 16., notching up an additional Rs 7,300 to reach a total size of Rs 51,365 9. 5. 11. `27,433 `28,854 `32,106 `37,405 `43,991 `51,365 CATEGORY CONTRIBUTION & CATEGORY ACROSS ALL MEDIA IN 2015 INDIAN ADVERTISING MARKET 2015-16 2015 Growth to Growth Medium 2015 ( cr) 2016 ( cr) Growth Product in 2015 / in TV Print 17261 16935 20713 18629 20. 10. Sam Balsara Vikram Sakhuja Nilesh Bagaria The Indian media and advertising industry is BOOMING, like never before. In 2015, the advertising industry grew by 17., close on the heels of LY growth of 16.. This growth is 4 percentage points higher than our mid-year projections of 13.. It is interesting to note that it took five years (2008 to 2013) for the industry to add Rs 10,586, moving up from Rs 21,520 to Rs 32,106, but only two years (2013-15) to add Rs 11,885 to reach Rs 43,991. With this growth, India finally earned the distinction of being the fastest growing advertising market in the world. In terms of absolute numbers, the Indian advertising industry has increased by Rs 6,586 to touch Rs 43,991 in 2015. The categories that have contributed most to the overall growth in 2015 are FMCG, e-commerce, Auto and Telecom/DTH. FMCG continues to be the most dominant sector with a 2 share of the total Indian advertising industry pie followed by e-commerce () and then Auto (). Contrary to the general perception that e-commerce has taken the media market by storm, it is good old FMCG that has contributed Rs 2050 to the overall growth. E-commerce came a distant fourth with a contribution of Rs 793 to the overall growth. E-commerce, though, has become the second largest category, a distant second, but definitely second after FMCG. FMCG E -commerce Auto Telecom / DTH Real Estate & Home Improvement Clothing Fashion Jewellery Education BFSI HH Durables Travel & Tourism Retail Media Corporate Alcoholic Beverages 12364 4231 4105 3307 2296 2238 1940 1822 1795 32 1159 511 498 222 6071 43991 2 1 2 2 2 3 1 1 1 2 4 1 1 3-1 2050 793 899 848 100 343 269 206 405 458 181 56 40 57-119 6586 3 1 1 1 - Radio Outdoor Digital Cinema Total 1545 2665 5120 465 43991 1823 3010 6656 535 51365 18. 12. 30. 15. 16. It is interesting to note that it took five years (2008 to 2013) for the industry to add Rs 10,586, moving up from Rs 21,520 to Rs 32,106, but only two years (2013-15) to add Rs 11,885 to reach Rs 43,991
06 O ur prognosis for 2016 is that it is going to be yet another GOOD YEAR for Media. In arriving at the numbers for advertising in each medium, we are conditioned by the fact that the Indian economy has become the fastest growing economy of the world; our GDP growth rate at + is the envy of the Western world, now looking at India in a new light. Our Bharatiya Janata Party government tells us that it has made a number of structural interventions to prepare the economy for high growth and continues to remind us that they are strongly focused on stimulating the country s economic growth for which probusiness policies are essential; at the same time not ignoring subsidies for the poor, which should also add to purchasing power of Rural India. Finally, commodity prices including that of oil are likely to remain soft throughout 2016. Although Indian businesses have expressed concern that all the positive actions taken by the government have not resulted in growth on the ground, we feel that India Inc. remains very optimistic about India s future and they will once again invest heavily in advertising to protect and grow market-share of their brands and also launch a number of new brands and variants, e-commerce platforms and apps to capture the imagination and meet the requirements of modern India. All this will help the advertising market cross the Rs 50,000 mark. We expect the market to grow by more than Rs 7,300 to reach a total size of Rs 51,365, which represents a growth of 16. over 2015. India will also retain the distinction of being the fastest growing advertising market in the world for the second consecutive year. On the supply side, a big contributor of this growth will be the ICC Cricket T20 World Cup and the busy schedule of Indian Cricket for the next six months. TV will continue as the largest contributor to the overall advertising pie with a share of 4, gaining a further 1 percentage point. Share of Digital spends will increase to a respectable 1 of the overall advertising pie. In conclusion, 2016 promises to be yet another high growth year for the Indian advertising market. Perhaps no market anywhere in the world has grown so consistently across the last three years to achieve a growth of 6from 2013 to 2016. In the previous three years from 2010 to 2013, the growth has only been 2. Paradoxically, the market enablers are growing at a faster rate than the markets they hope to stimulate. Not many categories in the past three years would have grown by 6. A sure sign that India Inc. has confidence in India s future. TOP ADVERTISERS OF INDIA T his year, in response to many requests from Advertising & Media professionals, we are releasing a chart of approximate ad spends of the Top 50 advertisers of India for the year 2015. Advertising continues to be a game of the Big Boys. The Top 50 advertisers account for 3 of the advertising market. This number is significant, considering that there are over two lakh advertisers in Print and over 12,000 advertisers in TV. The Top 10 advertisers account for as much as 1 of the total market and contribute to 4 of the total 50 list. By the time you reach rank 50, you are down from Rs 2300-2500 to Rs 100-150. A note of caution here - some advertisers who in our list rank between 50-60 may well be in reality in the top 50 list or vice-versa. HUL continues to lead the pack with spends of about Rs 2,500. Amazon India comes in next, followed by Procter & Gamble, Flipkart, Maruti Suzuki, Mondelez, Godrej, ITC, Snapdeal and Reckitt Benckiser that have ad spends ranging between Rs 400-700, to make up our Top 10. (We may mention that many Madison clients feature in this list, but we hasten to add that we have not used confidential information that we are privy to in arriving at this list. The list has been arrived at using a standard structured process.) SR NO 1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 TOP ADVERTISERS IN 2015 Hindustan Unilever Amazon Procter & Gamble Flipkart Maruti Suzuki Mondelez Godrej Consumer ITC Snapdeal Reckitt Benckiser Hero Motocorp Samsung Bharti Airtel Colgate Palmolive Marico Glaxo Smithkline Nestle India Pepsi TVS Motor Johnson & Johnson L Oreal Dabur Olx Honda Motor Mahindra & Mahindra Bajaj Auto Coca Cola India Vini Emami Future Retail Tata Motors Idea Cellular LIC Of India Hyundai Motors Ford Renault Panasonic India Vodafone Quikr Amul Gitanjali Gems Hotstar MRF Titan Yepme.com LG Electronics Wipro Britannia Raymond Asian Paints APPROX SPENDS IN RS CRORE 2300-2500 900-1000 600-700 600-700 500-600 400-500 400-500 400-500 400-500 300-400 300-400 300-400 250-350 250-350 250-350 07
TELEVISION 08 09 The Small Screen Rules After four years, Television reclaims top position from Print to garner the largest chunk of the advertiser s spends at Rs 17,261 (a whopping 2 growth), with FMCG being the biggest spender on the medium. Television will continue to remain brands all-time favourite medium in 2016 and grow by another 2 on the back of FMCG, Telecom, mobile hand-sets, e-commerce and auto players Television has grown by a whopping 2 to reach Rs 17,261 and is on track with our mid-year projections of 2 growth. With close to 4 share, Television becomes the largest contributor to the advertising pie. In terms of absolute numbers, TV advertising has grown by Rs 3,103. The main categories that have fuelled the overall growth of Rs 3103 in 2015 are FMCG (Rs 13 ), Telecom/DTH (Rs 499 ), E-commerce (Rs 457) and Auto (Rs 326 ) The e-commerce category grew dramatically by 6 to reach Rs 1,223. However, in absolute terms, it contributes only to the overall TV market. 2015 s biggest cricketing event, the ICC Cricket World Cup contributed approximately Rs 500 to the overall growth. IPL had another successful year and netted almost Rs 1000 in 2015. In terms of category contribution, the pecking order remains the same with a marginal 2 percentage points shift in contribution from FMCG to e-commerce. FMCG, however, continues to rule the roost contributing 5 share of total TV spends (down from last year s 5), followed by Telecom/DTH () & Auto (). Looking at genres within Television, Hindi GEC contributes nearly 2 of the overall TV revenue and continues to remain the leader of the pack. In terms of growth, Hindi GEC, Sports and South regional show substantial increase. With all networks selling HD channels separately for regular as well as impact properties, revenue from HD channels has grown dramatically in 2015 although the base is still very small. The impact of TRAI s 10+2 ruling seems to be on the wane, with many channels having telecast more than 12 mins/hour of FCT. This has also been confirmed by TRAI in its latest press release. This increase in FCT has also been a major contributing factor to the dramatic increase of 2 in the TV advertising market. TV GENRE-WISE REVENUE CONTRIBUTION IN 2015 Genres Hindi GEC Hindi +English News Tamil Reg Sports Marathi Reg Telugu Reg Hindi Movies Bengali Reg Kannada Reg Music Malayalam Reg Kids Info Movies Eng Eng Niche Revenue in 2015 2 1 `11,478 `11,478 8. `12,419 1 `,158 21. 2 `17,261 `20,713 Approx Revenue in Rs 4600 5600 1700 2000 00 1800 1500 2000 700 850 700 850 700 850 550 700 500 650 500 600 450 600 450 600 450 600 375 500 250 350 1000-1300 CATEGORY CONTRIBUTION & CATEGORY IN TV IN 2015 TV - 2015 Product FMCG Telecom / DTH Auto E Commerce HH Durables Clothing Fashion Jewellery Real Estate & Home Improvement BFSI Travel & Tourism Corporate Alcoholic Beverages Education Retail 8999 1796 1347 1223 777 578 552 391 261 253 181 152 123 627 17261 in 5 Growth 2015 / 1 3 3 6 3 2 2-2 1 3 2-2 2 to Growth 13 499 326 457 200 125 113-19 53 31 50 9 26-180 3103 in 4 1 1 1 - - Paradoxically, as India races to have 500 million users on the Net, we expect TV, most brands all-time favourite medium, to grow by another Rs 3450 or 2 in 2016 to reach a total figure of Rs 20,713. Factors that will lead to this high growth are: Organic growth coming from the largest contributor to TV Market, FMCG. Entry of new Chinese manufacturers into India, specially in Electronics and mobile handsets like Vivo, Xiaomi, Le-Eco and others. Big bang launch of Reliance 4G services Jio anytime soon, and the defensive efforts of existing telecom operators. Thirty new car and 25 new two-wheeler launches expected in the Auto industry. Continued emergence of new e-commerce advertisers, covering more and more categories and new services. Election campaigns of political parties, given that five State assembly elections in Tamil Nadu, West Bengal, Assam, Pondicherry & Kerala are scheduled in 2016. New channel launches from existing networks will increase inventory supply to absorb this growth, as also the inevitable rate increases.
PRINT 10 11 1 Headlining Growth Print beat our estimates and grew substantially by 1 to reach Rs 16,935 in 2015. However, advertisers lost their appetite for magazines, which saw negative growth. In 2016, dailies will continue to lead the expected growth, with language publications at the frontier; new editions by regional publishers expected to attract new Print has grown substantially, by as much as 1 (compared to our forecast of 5.) to reach Rs 16,935 and continues to be the second highest contributor after TV to the total advertising pie, with a share close to 3. While dailies increased by 1 in 2015 over 20, magazines as a medium failed to gain advertiser interest and saw a negative growth of. Nearly 7 of Print s growth of Rs 1661 is accounted for by just three categories e-commerce (Rs 398 ), FMCG (Rs 393 ) and Auto (Rs 360 ). Another 2 is accounted for by Education (Rs 224 ) and HH durables (Rs 4 ). In terms of category contribution, the decision of many publishing houses to follow a differential pricing for FMCG has begun to bear results and now FMCG is also the largest contributor to the Print pie, with a contribution of 1. Auto is the second largest contributor at 1, followed by Education (). Also, whilst in terms of contribution, e-commerce comes way down the list, it shows the highest growth of 12. While only four categories account for 7 of Television advertising, it takes as many as 10 categories to contribute the same to Print advertising, demonstrating that Print is less vulnerable to any category degrowth. In terms of volume in column centimetres (cc), Hindi publications continue to be ahead of English publications. Hindi publications contribute 3 of the total volume while English publications contribute 2. In our estimates, though, in terms of growth of volume cc, both English & Hindi publications have grown at the same rate of 7-. Telugu publications also grew at the same rate. Bengali & Oriya publications show the highest increase of 13-1, but Gujarati publications show a decline of. PRINT - LANGUAGE WISE PUBLICATION VOLUME IN CC IN 2015 ( CC IN MN ) Language Hindi English Marathi Tamil Telugu Gujarati Kannada Malayalam Oriya Bengali Assamese Punjabi Urdu Yr 20 109.1 79.4 27.6 22.3 21.4 15.4 12.5 11.2 7.8 4.2 2.4 2.3 1.3 316.8 Yr 2015 117.9 84.8 28.8 23.5 22.9.8 12.8 11.2 8.8 4.8 2.4 2.4 1.3 336.8 Growth (Yr 15/ ) - 1 1 0. `11,509 `11,970 `13,167 `15274 10. `16935 `18,629 in (2015) 3 2 0. CATEGORY CONTRIBUTION & CATEGORY IN PRINT IN 2015 Print - 2015 Product FMCG Auto Education Real Estate & Home Improvement Clothing Fashion Jewellery Retail BFSI HH Durables E Commerce Telecom / DTH Travel & Tourism Corporate Media Alcoholic Beverages 2470 2174 1661 1191 1018 952 797 784 729 639 323 218 172 10 3797 16935 in 1 1 2 Growth 2015 / 1 2 1-1 2 12 1 2 1-1 to Growth 393 360 224-37 91 7 71 4 398 63 56 1 3 2-255 1661 in 2 2 1-2 -1 Print: We expect the Print advertising market to grow by a further in 2016, mainly from dailies, taking the total print market close to Rs. 18,600 s. Most of this growth will come from language publications and new editions by regional publishers that will attract new Retail advertisers. Other factors contributing to growth of Print advertising market are likely to be: Election campaign in the 5 States heading for Assembly Elections this year Organic growth from various Print loyalists like Auto, Durables and Education. Big Bang launches, using Front page jackets by new Mobile apps and stream of tactical offers by Ecommerce and Retail companies Multiple launches across both 4-wheelers and 2-wheelers from all leading auto companies
DIGITAL 12 13 Strong Surge Continues Digital advertising grows 2, crosses Rs 5,000 mark as video, social and mobile grow fast. Digital is expected to finally come into its own in 2016 with a growth of about 3. Advertisers will begin to use Digital as a reach and awareness building medium At 2, growth in digital media is in line with our earlier expectation. The Digital advertising market now crosses the Rs 5,000 mark. Though the absolute spends on Search have increased, its share of the digital pie has gone down due to the fact that video, social and mobile display have grown at a faster rate last year. Desktop display growth has also further slowed down, as mobile is the allpervasive platform of choice today. While e-commerce players are by far the biggest spenders on Digital, spends are skewed towards Search and Social with Mobile as a key platform. The uplift in Video comes from the fact that more and more FMCG players are using the digital space to reach out to their audiences to support their Television campaigns. We expect Digital to gain momentum and grow by about 3 in 2016 to reach close to Rs 6,650. Search spends are likely to stabilize and Desktop display would see a further downward trend in terms of share of pie. Programmatic Buying has seen some traction in 2015; this is likely to get further strengthened in 2016. With more users on mobile, spends will be strongly focused on this platform; and whether it is Search, Social or Video, about 8 of all ad impressions will be delivered on the mobile device. As the reach of Digital crosses 400 mn, digital will start coming into its own; some advertisers will begin to use it as a reach and awareness building medium. It will, however, not lose its importance as a conversion or performance medium and as a strong support medium to TV. FMCG, Telecom, consumer durables, real estate, apparel and BFSI will continue to be growth drivers; e-commerce will remain the backbone of the industry. 4 5 `1,535 `2,302 `3,050 `3,970 INTERNET EXCLUDING SEARCH 2016 INTERNET SPENDS ON SEARCH 2016 3 3 2 3 `5,120 `4,424 CR `2,232 CR `6,656
RADIO 15 A Sound Growth Radio has grown by 2 in 2015 to become a Rs 1,545 market, but maintains its share of the total advertising pie at 3.. E-commerce and Automobiles emerge as major contributors. New radio stations, multiple auto launches and State elections will aid Radio to grow by 1 in 2016, taking the total Radio advertising market close to Rs 1,800 Radio has grown by 2 in 2015 to become a Rs 1,545 market and has maintained its share of the total advertising pie at 3.. In terms of absolute numbers, Radio advertising has grown by Rs 260. E-commerce advertisers have emerged as one of the main contributors to the growth followed by Automobiles category. Revenue from e-commerce players, in fact, has almost doubled in 2015 on Radio on account of various offer-based tactical campaigns. The Automobile category has grown by 3 on radio in 2015 on the back of new launches across segments. In terms of category contribution, Real Estate & FMCG sectors continue to lead the pack contributing each of total Radio spends followed by Telecom/DTH & Auto sectors (both at ). E-commerce now shows up as a major contributor at. The growth has come on the back of higher inventory sold across stations. `903 `930 1 `1,097 1 `1,285 2 `1,545 1 `1,823 CATEGORY CONTRIBUTION & CATEGORY IN RADIO IN 2015 Print - 2015 Product FMCG Real Estate & Home Improvement Telecom / DTH Auto BFSI E Commerce Media Retail Clothing Fashion Jewellery Travel & Tourism HH Durables Education Corporate Alcoholic Beverages 160 156 107 106 105 90 87 72 70 66 50 47 27 4 398 1545 in 2 Growth 2015 / 1 3 3 9 1 1 1 1 1 3-3 2 to Growth 7 2 10 28 26 43 1 8 9 7 6 6 7 0 101 260 in 1 1 3 We expect Radio to grow by 1 in 2016, taking the total Radio Advertising market close to Rs 1,800. Factors contributing to this growth will be: Election campaigns in the five States heading for Assembly Elections this year. Multiple launches across both 4-wheelers and 2-wheelers from all leading Auto companies. Many new radio stations emerging after winning bids in the recently held Phase 3 auctions.
OOH 16 17 Rise of Digital OOH & Malls The sub-segment of Digital OOH & Malls has seen rapid growth even as the overall OOH market grew by 1 in 2015 to Rs 2,665. Higher adoption of Digital and technology and greater use of transit media will be seen in 2016, when the total Outdoor Advertising Market is expected to grow by 1 to cross Rs 3,000 Our OOH estimates now include Digital OOH & Malls, which are growing quite rapidly and hence we have recast OOH revenue figures for the last three years when this sub-segment began to emerge. Digital OOH & Malls revenue is estimated at Rs 300 in 2015 (Digital OOH & Malls netted an additional Rs 100 in 20 & Rs 50 in 2013). The OOH market has grown by 1 in 2015. Transit media, though, grew by 1. In terms of absolute numbers, OOH advertising is now a respectable Rs 2,665 market. Retail, Real Estate & Automotive continue to be the top three categories in terms of contribution. The highest growth was in the e-commerce category (1) followed by Automotive (6), both together, contributing 6 of the overall growth. The usual big spenders - TV channels, Banks, Print Media, Mutual Funds, etc., reduced their OOH spends in 2015. FMCG, which is the largest contributor to TV, Print & Radio, does not use OOH substantially except perhaps HUL, therefore FMCG contribution to OOH is only. In terms of city-wise spread, Mumbai continues its lead as a major contributor (2) followed by Delhi (1). Bangalore replaces Kolkata as the Number 3 city with a contribution of. OOH has maintained its contribution to the total media pie, at.hul leads the pack of top advertisers in OOH media for the year 2015 - TOP 10 OOH ADVERTISERS IN 2015 Advertiser Hindustan Unilever Life Insurance Corp Of India State Bank Of India Maruti Suzuki Bharti Airtel Honda (4 Wheelers) ITC Honda (2 Wheelers) Quikr.Com Hyundai Approx Spends in Rs 8. `1,717 `1,862 70 90 55-70 45-60 45-60 40-55 15-45 30-40 25-35 25-35 25-35 8. `2,027 15. `2,333. `2,665 12. `3,010 CATEGORY CONTRIBUTION & CATEGORY IN OOH IN 2015 OOH - 2015 Product Organized Retail Consumer Services Real Estate & Construction Automotive Telecom Financial Services FMCG E-commerce Media Electronic Durables 371 364 347 279 252 217 189 172 100 66 306 2665 in 1 1 1 1 Growth 2015 / 6 2-1 - 1 to Growth 28 32 2 111 50-8 8 90-12 3 27 332 in 3 1-2 - 2016 FORECAST We expect Outdoor to grow by 1 in 2016, taking the total Outdoor Advertising Market to more than Rs 3,000. Many of the factors outlined for Print and Radio will also be responsible for driving the growth of Outdoor. We see also a higher adoption of Digital and Technology and greater usage of transit media at airports and metros. Our OOH estimates now include Digital OOH & Malls which are growing quite rapidly and hence we have re-cast OOH revenue figures for last 3 years when this sub-segment began to emerge
CINEMA 19 A Blockbuster Performance 20. Cinema advertising grew by 2 in 2015, to clock a total revenue of Rs 465. It now garners of the advertising pie, helped by substantial contribution from government and local retail advertising. It is expected to grow by 1 and cross Rs 500 in 2016 fuelled by digitization of single screens, multiplex screen presence in Tier II and Tier III towns and popularity of Hollywood & regional films in India W e recognize that we have under-reported Cinema advertising in our earlier estimates. Cinema advertising from various government agencies and many local/retail advertisers using static slides are a substantial contributor and growing quite rapidly. Therefore, we have included spends by these advertisers for this year and also in our estimates of previous years. This has led Cinema to grow by 2. It now contributes to the total advertising pie with total revenue of Rs 465 in 2015. The multiplex boom in smaller towns, digitization of single screens, and substantially increased activity on marketing of movies (both Bollywood & Hollywood) has created interest around the medium that has attracted new advertisers. We expect Cinema to grow by 1 in 2016 taking the total Cinema advertising revenue to Rs 535. Digitization of single screens, presence of multiplex screens in Tier II and Tier III towns and increasing popularity of Hollywood and regional films in India are expected to fuel the growth of Cinema advertising. 17. 1 11. 11. 7. 18 `290 2011 `312 2012 `347 2013 `385 20 `465 2015 `535 2016 Cinema advertising from various government agencies and many local / retail advertisers using static slides are a substantial contributor and growing quite rapidly Therefore we have included spends by these advertisers for this year and also in our estimates of previous years