FICCI-KPMG-Report-13-FRAMES

24 The power of a billion: Realizing the Indian dream
Advertisement spends were affected as private
consumption experienced a protracted slowdown. The
2012-13 advance estimates from the Central Statistics
Office indicate a sharp fall in the growth of real private final
consumption expenditure (PFCE). At constant (2004-05)
prices, the PFCE is estimated at INR 34,730 19 billion in
2012-13, an increase of only 4.1 percent over the previous
year. In comparison, the increase in private consumption
expenditure was estimated at 6.5 percent in 2011-12 and
8.1 percent in 2010-11 .
The absence of a mega sporting event, like a Cricket World
Cup in 2011, and a muted advertiser response to season
5 of the IPL contributed to the low television ad spends
in 2012. The ten week TAM black-out coincided with
the festive season, and the industry is reported to have
completed deals during this period on the basis data of the
preceding eight to ten weeks. This may have led to niche
and fringe broadcasters being unable to achieve the full
advantage of the festive season spends.
A study of marketing spends of a sample of advertisers
suggests that while select large advertisers increased
spending on advertisement and promotion in order to
revive demand, on an overall basis, advertising spend
remained muted.
Illustrative analysis of key advertisers
“
There was some pressure overall on the
industry in the last few months. Advertisers
have reduced their campaign size and
outlays, which tends to impact smaller
channels first. For us, this fiscal year has
been good. We are however cautiously
optimistic about the next year.
“
- Nitin Nadkarni
CFO,
Multi Screen Media Private Limited
This year, growth in the ad market was
muted. Leading players came into focus in
this year, with their large GRPs and reach.
Scan the QR code to hear more from Man Jit
“
- Man Jit Singh
CEO,
Multi Screen Media Private Limited
“
Key advertisers
Advertisement spend (April to
December, INR billion)
A&P expenses as share of revenue
(April to December)
Increase in A&P spends
over last year
2012 2011 2010 2012 2011 2010 2012 2011
HUL 24.1 19.7 21.4 12% 12% 14% 22% -8%
Colgate Palmolive 2.7 3.2 2.7 12% 16% 16% -15% 19%
Bharti Airtel 64.4 52.9 46.0 11% 10% 11% 22% 15%
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Ideal Cellular 18.7 17.3 13.6 11% 12% 12% 8% 28%
Godrej Consumer Products
Ltd.
Source: Company fillings on BSE
Advertising spends are expected to grow at a similar rate in
2013. However, outlook for the Indian television advertising
industry remains positive in the medium term with a CAGR
of 14 20 percent over 2012-17.
4.6 3.2 2.5 10% 10% 10% 44% 27%
Note: A&P expenses refer to Advertisement and Promotion expenses for Hindustan Unilever Ltd. and Colgate Palmolive India Ltd., Sales and Marketing spends for Bharti Airtel Ltd., Advertisement and Publicity
for Godrej Consumer Products Ltd. and Subscriber acquisition, Service and Business promotion expenditure for Idea Cellular
“
TV is the most undervalued media
and continues to get the lowest rates,
especially for the kind of reach it delivers,
while being an accountable media where
brands know exactly how many people
watched their commercials.
“
- Rohit Gupta
President,
Multi Screen Media Private Limited
On the other hand, subscription revenue for broadcasters
is estimated to grow at a CAGR of 26 percent from 2012
to 2017. Increase in the declared subscriber base and
aggregation of distribution on behalf of broadcasters is
expected to drive up the share of subscription to total
broadcaster revenue from 36 percent in 2012 to 48 percent
in 2016 21 .
19. Central Statistical Organization
20. Industry discussions conducted by KPMG in India, KPMG in India analysis
21. KPMG in India analysis