PITCH MADISON ADVERTISING REPORT 2019

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Advertising industry grew by 14.6% in 2018;

surpassing our estimate of 12.03%

16.4% growth expected in 2019,

on the back of GeneralElections, ICC Cricket World

Cup and growing consumption economy

January 2019 | PITCH | 17

of anything from a data breach to a tweet made in bad taste to a product gone wrong to a false accusation or rumour. Regardless of the source or nature of the problem, every crisis needs a response and quickly. Here is also when the CSR marketing initiatives help the brand emerge out good. Online publishers are more likely to write positive articles about a brand which does good deeds.

Best-practices companies operate coordinated programs across the CSR and their marketing portfolio. Some of their initiatives indeed create shared value; some though intended to do so.

The Indian Media & Advertising industry is on a high growth path, and appears to be finally reaping the benefits of demonetization and the Goods & Services Tax (GST), that had hit the growth of Adex in 2016-17. Surpassing our projected growth rate of 12.03% for 2018, the advertising industry grew by 14.6%, and the bullishness is set to continue in election year. In 2019, the market is expected to grow by 16.4%, adding Rs 9,980 crore to Adex, taking it to an all-time high of Rs 70,888 crore

HAPPY DAYS ARE HERE AGAIN!

Many readers will remember the memorable and catchy jingle ‘Happy days are

here again’ used by Thums Up way back in 1977. This is the over-arching theme of our report this year, because against our estimate of 12.03% growth, the market has actually grown by 14.6%, crossing the Rs 60,000 crore mark. Our projection for 2019 is equally bullish at 16.4% growth. But more about 2019 later.

After two dull years in 2016 and 2017, this bullishness will come as refreshing news to media owners and it’s probably a sign that India Incorporated is reaping the benefits of both demonetisation and GST. One can indeed see growth in prosperity, amongst the middle or the consuming class, though the farm sector seems to be under some stress. The last time we have seen such high

growth was in 2014 (16.5%) and 2015 (17.6%), three years after low growth in 2011 (9.6%), 2012 (5.2%) and 2013 (11.3%).

In absolute terms, Adex has grown from Rs 53,138 crore to Rs 60,908 crore in 2018, an addition of Rs 7,769 crore, the highest addition in one year of the last decade. Also, the growth rate of 14.6% achieved in 2018 is almost double the growth rate achieved in 2017.

A 10-year perspective shows that during the last decade, Adex has tripled in size from Rs 19,582 crore to Rs 60,908 crore, registering a compound annual growth rate of 12%. Whilst Adex has been growing, the growth rates have oscillated widely from a high of 27.8% to a low of 5.2%, (if you ignore 2009, one of the few years in Indian advertising history, when Adex de-grew by almost 9% on the back of a global crisis).

Sam Balsara

Vikram Sakhuja

Nilesh Bagaria

GROWTH %

YE

AR

LY S

PE

ND

S (R

s C

RO

RE

)

2011 20152013 20172012 20162014 2018

INDIAN ADVERTISING MARKET OVER LAST 8 YEARS

27,433 28,85432,106

37,40543,991 49,480

53,138

60,9089.6%

5.2%

11.3%

16.5%17.6%

12.5%7.4%

14.6%

16.4%

GROWTH FORECAST FOR 2019

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4 5

`18

,83

1

`18

,15

1

`1,7

49

`52

3

`2,9

10

`7,3

15

`19

,65

0

`23

,43

2

`18

,64

0

`19

,45

7

`1,8

75

`214

4

`58

6

`80

5

`3,0

85

`3,3

65

`9,3

03

`11,

70

5

38%

37% 38%

37% 35% 32%

4% 4% 4%

1%1% 1%

6%6% 6%

15%

18% 19%

2016 2017 2018 SHARE OF ADVERTISING PIE

TV PRINT RADIO CINEMA OUTDOOR DIGITAL

19.2% 4.4% 14.3% 37.4% 9.1% 25.8%

Growth % 2018/17

CATEGORY CONTRIBUTION & CATEGORY GROWTH ACROSS TV + PRINT + RADIO IN 2018

FMCG

Auto

Telecom

Education

HH Durables

Real Estate & Home Improvement

E-Commerce

Clothing Fashion Jewellery

BFSI

Retail

Travel & Tourism

Corporate

Alcoholic Beverages

Others

14,717

4,755

3,450

2,322

2,097

2,006

1,986

1,756

1,478

1,471

791

647

302

7,257

45,032

33%

11%

8%

5%

5%

4%

4%

4%

3%

3%

2%

1%

1%

16%

100%

14%

13%

9%

11%

22%

12%

21%

13%

2%

12%

11%

14%

20%

7%

12%

1,798

538

297

222

378

208

351

203

33

154

77

80

50

478

1434

37%

11%

6%

5%

8%

4%

7%

4%

1%

3%

2%

2%

1%

10%

100%

TV + Print + Radio - 2018

Product Category

Category Contribution

In Rs crore

in %

Category Growth %

2018/ 17

Contribution to Growth

in %In Rs crore

Whilst it is no surprise that in a rapidly digitising India, most of the growth in 2018 has come from Digital, it is significant to note that TV not only grew by a dramatic 19.2%, but also succeeded in increasing its share of Adex from 37% to 38%.

India is perhaps the only major market where Print Adex is actually growing year on year, although its growth rate is rapidly declining. India again is probably the only country in the world where Print still commands a majestic 31.9% share of Adex.

Amongst the smaller media, our figures show that Cinema has grown at a fast pace, clocking a growth rate of as much as 37% on the back

of digital distribution and growing multiplexes in smaller towns. The actual growth rate may not be quite so high, perhaps because we under-reported Cinema Adex in the last two years.

Household durables, e-commerce and alcoholic beverages have grown the most last year, registering a 20% plus growth rate. The evergreen FMCG continues to dominate TV, Print and Radio with a market-share of 33% with Auto coming in a distant second at 11%. FMCG, Auto, Telecom and Education continue to be the four biggest categories. These four categories contribute to as much as 57% to total traditional Adex.

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FORECAST FOR 2019

We are bullish in our projection for Adex in 2019. We expect Adex

to grow by 16.4%, taking it to an all-time

high of Rs 70,888 crore. If our forecast is to come true, and we are sure it will, Indian

Adex would have added in just two years about Rs 18,000 crore,

i.e., a growth of 33%. This is a sure indication that India Incorporated

is optimistic about India’s growing

consumer market and has confidence

that the economy will continue to grow. With such high growth, India

is likely to once again become the fastest

growing advertising market in the world.

There are several factors that lead us to our optimistic forecast.

• India will witness the biggest spectacle of all – the General Elections. Having seen what the BJP achieved through advertising in 2014, more parties are likely to use advertising as a potent tool to improve their chances of a win.

• The first quarter of the year will also see a substantial increase in government spending, since the party in power will spend government resources to showcase its achievement in the last four years. All governments seem to do this.

• This year will also see the ICC Cricket World Cup taking place in June 2019. It is now being played in a league format, which will reassure Indian advertisers and promise them safe return on their money. Encouraged by the growth in Indian Premier League (IPL) revenue last year on the back of a lot of innovation and increase in number of channels airing IPL, Star India is likely to make a push for higher money for IPL and succeed, given that many new advertisers who came in last year, expressed satisfaction with their investment in IPL.

• OTT, the new kid on the block, has seen initial success with growing adoption and viewership base and OTT players are likely to spend substantially, like Satellite TV did in its early years when competition heated up.

• Both the Centre and the States are likely to focus greater attention on the rural economy, specially farmers. Advertisers will be spending money on media and activation, to tap money that will become available to farmers.

`23

,43

2

`19

,45

7

`2,1

44

`80

5

`3,3

65

`11,

70

5

`27,

64

9

`20

,42

9

`2,4

01

`1,0

47

`3,7

50

`15

,612

2018 2019 SHARE OF ADVERTISING PIE

38%32%

4% 3%

1% 1.5%

6%5%

19%22%

TV PRINT RADIO CINEMA OUTDOOR DIGITAL

INDIAN ADVERTISING

MARKET : 2018 & 2019

33.4%11.4%30%12.0%5.0%18.0%

Growth % 2019/18

39%

29%

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8 9

38% 39% 38% 37% 38% 39%2014 2015 2016 2017 2018 2019P

`27,649GROWTH %

SHARE OF ADEX

YE

AR

LY S

PE

ND

S (R

s C

RO

RE

)

18%

22%

14%

19%

TV ADEXTV

`23,432`19,650

`18,831

`17,261

`14,158

9%4%

Television grew by an unbelievable 19%, adding Rs 3,782 crore to Adex in 2018, to reach a size of nearly Rs 23,500 crore. Fuelled by FMCG and Auto,

this growth is the highest the TV industry has seen in the last three years. In 2019, Television is expected to grow 18% to reach a total figure close to Rs 27,650 crore, on the back of election-related advertising and increased

spends around sporting properties such as the ICC Cricket World Cup

BULL RUN

In an increasingly Digital World, TV grew by an unbelievable 19% to reach close to the Rs 23,500 crore mark, reinforcing regular advertisers’ unshakeable faith in

this medium, no doubt aided by the robust measurement mechanism set up by our industry. This is the highest growth TV has witnessed in the last three years. In terms of absolute numbers, TV advertising has grown by Rs 3,782 crore in 2018. Its share in the Adex pie stands at 38%. Whilst its share has declined over the decade from 43% in 2009, it is significant that since 2015, it has increased its lead over Print, and now the gap in share is as much as 7 percentage points.

The main categories that have fuelled the overall growth of Rs 3,782 crore in 2018 are the evergreen FMCG (Rs 1,660 crore) and Auto (Rs 360 crore). The e-commerce category too grew dramatically by 29% to reach Rs 1,100 crore from Rs 850 crore in 2017.

FMCG continues to rule the roost, contributing as much as 50% to the total Television Adex, followed by Telecom at 12% and Auto at 8%.

Increase in FCT has also been a big contributing factor to the overall increase of 19% in the TV Advertising market. The overall FCT demand in 2018 has increased by a good 12% led by growth in frequency channels and new channel launches.

Whilst Hindi GECs continue to dominate TV Adex, contributing 26%, their contribution has dropped by 2 percentage points. In terms of FCT growth, Bengali, Telugu, English Movies, News and Tamil show maximum growth in FCT consumption.

CATEGORY CONTRIBUTION & CATEGORY GROWTH IN TV IN 2018

FMCGTelecom

AutoHH Durables

E-CommerceReal Estate & Home Improvement

Clothing, Fashion JewelleryBFSI

CorporateTravel & Tourism

Alcoholic BeveragesEducation

RetailOthers

TOTAL

11,7212,7901,8731,1751,101695676498345335289256223

1,454

23,431

50%12%8%5%5%3%3%2%1%1%1%1%1%6%

100%

17%14%24%37%29%21%27%24%18%36%22%16%23%19%

19.2%

1,660340361316246120145955389513642228

3,781

44%9%10%8%6%3%4%3%1%2%1%1%1%6%

100%

TV - 2018

Product Category

Category Contribution

in %

Category Growth %

2018 / 17

Contribution to Growth

in %In Rs crIn Rs cr

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We expect TV to grow further by a dramatic 18% in 2019 to reach a total figure close to Rs 27,650 crore. Overall market sentiment looks in favour of the TV industry, having recovered from the blow that it suffered due to demonetization and imposition of GST in 2016 and 2017.

Key factors that will lead to this high growth are:

• The upcoming general elections and sporting events such as ICC Cricket World Cup will drive ad revenues this year• Many regional parties are also expected to spend substantially on TV in the pre-election period• Star Sports aggressively selling IPL and ICC Cricket World Cup across TV and Hotstar to cross last year’s high revenue• Organic growth coming from FMCG on the back of rural demand and new launches.• New launches in Auto sector

We do not believe that the current disruption because of the Telecom Regulatory Authority of India (TRAI) ruling on giving consumers the option to subscribe to individual channels will disrupt Adex, as much as some earlier disruptions like Digital Addressable System (DAS) in 2012 did.

FORECAST FOR 2019

TV – GENRE-WISE REVENUE CONTRIBUTION IN 2018

Hindi Mainline GEC

Hindi Secondline GEC

News

Tamil Sat

Sports

Hindi Movies

Telugu Regional

Marathi Regional

Kannada Regional

Bengali Regional

Music

Kids

Malayalam Regional

Infotainment

English Movies

Enlish Niche

Others

16%

10%

11%

9%

10%

5%

5%

4%

4%

4%

3%

3%

3%

3%

3%

2%

7%

4%

8%

17%

16%

4%

-1%

23%

-4%

13%

32%

7%

-10%

15%

1%

20%

-13%

17%

6,000 – 6,500

2,200 – 2,700

1,800 – 2,000

1,700 – 1,900

900 – 1100

900 – 1100

800 – 1000

700 – 800

700 – 800

550 – 650

550 – 650

500 – 600

500 – 600

500 – 600

300 – 400

1,200 – 1,600

GenresRevenue

Contribution in 2018

FCT Growth

2018 / 17

Approx Revenue

in Rs crore

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PRINT

STILL GROWING, BUCKING GLOBAL TRENDS

Print Adex grew 4.4% in 2018, marginally lower than our projection of 5%. Despite

this, it continues to be the second highest contributor to Adex, after TV, with a share of 32%. Print share of Adex in India is probably the highest in the world. In 2019, the Print

advertising market is expected to grow by 5% to come close to Rs 20,500 crore

We estimate that Print grew by 4.4% during the year, marginally lower than our projection of 5%. This is a low growth, for the second year in a row. However, Print

continues to be second highest contributor to Adex after Television, with a share of 32%. It is significant to note that for the last few years, Print has been steadily losing share, but this year the decline accelerated and Print lost 3 percentage share points. In terms of absolute numbers, Print continues to grow, having added only Rs 820 crore to total Adex. Whilst these are sobering thoughts for Print barons, also saddled with high newsprint cost, we should not forget that with a share of 32%, Print share of Adex is probably the highest in the world. Another interesting fact that brings out the resilience of Print is that it has 2,00,000 advertisers and the number is growing, compared to TV which has only 12,000 advertisers.

41% 38% 37% 35% 32% 29%2014 2015 2016 2017 2018 2019P

`20,429GROWTH %

SHARE OF ADEX

YE

AR

LY S

PE

ND

S (R

s C

RO

RE

)

5%

11%

16%

4%

PRINT ADEX

`1,9457`1,8640

`1,8151

`1,6935

`1,5274

7%

3%

CATEGORY CONTRIBUTION & CATEGORY GROWTH IN PRINT IN 2018

PRINT – 2018 CATEGORY CONTRIBUTION

CATEGORY GROWTH %

CONTRIBUTION TO GROWTH

PRODUCT CATEGORY IN RS CRORE IN % 2018/17 IN RS CRORE IN %

FMCG 2,805 14% 4% 113 14%AUTO 2,723 14% 6% 154 19%

EDUCATION 1,990 10% 9% 170 21%RETAIL 1,129 6% 8% 85 10%

REAL ESTATE & HOME IMPROVEMENT 1,083 6% 5% 48 6%CLOTHING FASHION JEWELLERY 1,007 5% 5% 51 6%

HH DURABLES 858 4% 6% 49 6%BFSI 818 4% -10% -86 -11%

E- COMMERCE 770 4% 12% 84 10%TELECOM 532 3% -10% -60 -7%

TRAVEL & TOURISM 358 2% -6% -24 -3%CORPORATE 261 1% 9% 22 3%

MEDIA 175 1% 2% 4 0%ALCOHOLIC BEVERAGES 8 0% -21% -2 0%

OTHERS 4,941 25% 4% 211 26%

TOTAL 19,457 100% 4% 817 100%

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Print - Language wise Publication Volume in Cc in 2018 (Cc in million)

LANGUAGE 2017 2018 GROWTH %

(2018/ 17)

CONTRIBUTION IN % (2018)

HINDI 114.8 117.7 2% 35%ENGLISH 92.2 85.9 -7% 25%MARATHI 29.6 29.9 1% 9%TELUGU 23.4 22.7 -3% 7%

TAMIL 21.3 20.5 -4% 6%GUJARATI 14.7 14.5 -1% 4%KANNADA 15.0 16.3 8% 5%

MALAYALAM 11.0 10.4 -5% 3%ORIYA 9.1 9.2 1% 3%

BENGALI 5.5 5.3 -3% 2%PUNJABI 2.2 2.1 -6% 1%

ASSAMESE 2.4 2.5 4% 1%URDU 1.1 1.1 1% 0%

TOTAL 342 338 -1%

Nearly 75% of Print’s growth of Rs 820 crore is accounted for by just five categories – FMCG, Education, Auto, Retail and e-commerce.

In terms of category contribution, FMCG and Auto are also the largest contributor to the Print pie, with a contribution of 14%, followed by Education at 10%. Contribution of e-commerce comes way down with just 4%. Telecom, BFSI and Travel & Tourism categories have de-grown in 2018. It is significant that despite the sluggish Real Estate sector, this category has maintained its 6% share.

While only four categories account for 75% of Television advertising, it takes as many as 13 categories to contribute the same percentage to Print advertising, demonstrating that Print is less vulnerable to any single category de-growth.

In terms of volume, Hindi publications continue to be ahead of English publications, contributing 35% of the total volume while share of English publications dropped by 2%, and now stands at 25%. In terms of growth too, volume of English publications has de-grown by 7% while Hindi publications grew by 2%. South publications, except Kannada, show decrease in volume. Kannada publications, bucking the trend, show a substantial increase of 8% in the Cc volume.

FORECAST FOR 2019 We estimate Print Adex to grow by 5% in 2019 taking the Print market close to Rs 20,500 crore.

Print growth is likely to be aided this year by political campaigns during general election and Government ad spends. Categories like Real Estate and Education are likely to continue with large spends on Print. New launches in Auto sector, which have now become a common feature in the crowded Auto industry, will also contribute to Print growth.

16

RADIO BACK TO GROWTH

Radio maintained its share of the advertising pie at 3.5%, growing by 14% in 2018 to become

a Rs 2,150 crore market. Real Estate, Retail, BFSI and FMCG sectors continued to be the biggest spenders on Radio, and contributed

44% to total Radio Adex. In 2019, Radio is estimated to grow by 12%, to take the Radio

advertising market to Rs 2,400 crore

Radio has grown by 14% in 2018 to become a Rs 2,150 crore market and has maintained its share of the total advertising pie at 3.5%.

In terms of absolute numbers, Radio advertising has grown by Rs 270 crore.

Real Estate advertisers have emerged as one of the main contributors to Radio’s growth followed by Retail, BFSI & FMCG categories. These categories collectively contributed 44% to Radio’s growth.

In terms of category contribution, Real Estate and FMCG continue to lead the pack, contributing to 11% and 9% of total Radio spends respectively. e-commerce also shows up as a major contributor at 5%. Just 7 categories contribute to 50% of the total Radio Adex in 2018.

3% 4% 4% 4% 4% 3%2014 2015 2016 2017 2018 2019P

`2,401GROWTH %

SHARE OF ADEX

YE

AR

LY S

PE

ND

S (R

s C

RO

RE

)

12%

20%

17%14%

RADIO ADEX

`2,144`1,875

`1,749

`1,545

`1,285

13%

7%

CATEGORY CONTRIBUTION & CATEGORY GROWTH IN RADIO IN 2018

RADIO – 2018 CATEGORY CONTRIBUTION

CATEGORY GROWTH %

CONTRIBUTION TO GROWTH

PRODUCT CATEGORY IN RS CRORE IN % 2018/17 IN RS CRORE IN %

REAL ESTATE & HOME IMPROVEMENT 228 11% 22% 41 15%FMCG 191 9% 15% 25 9%

BFSI 162 8% 18% 24 9%AUTO 159 7% 17% 23 9%

TELECOM 128 6% 15% 16 6%RETAIL 119 6% 30% 27 10%

E-COMMERCE 115 5% 24% 22 8%MEDIA 101 5% -14% -17 -6%

TRAVEL & TOURISM 98 5% 14% 12 5%EDUCATION 76 4% 28% 17 6%

CLOTHING FASHION JEWELLERY 73 3% 10% 7 2%HH DURABLES 64 3% 26% 13 5%

CORPORATE 42 2% 13% 5 2%ALCOHOLIC BEVERAGES 4 0% 49% 1 0%

OTHERS 585 27% 10% 52 19%

TOTAL 2,144 100% 14% 269 100%

FORECAST FOR 2019 Radio has been growing at a fast pace in the last five years, except 2017. We expect Radio to maintain this momentum and grow by another 12% in 2019, taking the total Radio Advertising market to Rs 2,400 crore.

Radio should continue to enjoy the support of its top seven categories, along with election campaigns coming in as icing on the cake.

Also, many Radio stations have started experimenting with content, featuring interesting stories from horror and romance to real-life inspiring stories. This should catch the attention of people and bring in new listeners.

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We recognize that we have under-reported Cinema Adex in our earlier estimates

and therefore our current figures show that Cinema has grown phenomenally by 37% due to improved expansion of Digital distribution, infrastructure and emergence of multiplexes in smaller towns. We believe that in 2018, Cinema Adex has crossed Rs 800 crore. Despite this huge growth, Cinema continues to be a marginal player in Adex, with a share of little more than 1%. In 2018, success of small budget films has also reinforced advertiser confidence and given them greater opportunity to use Cinema more often.

We expect Cinema to grow significantly by 30% in 2019, taking Adex to cross the Rs 1,000 crore mark. If this

growth materialises in 2019, Cinema will contribute almost 1.5% to Adex after hovering at 1% for almost a decade.

Cinema has been growing steadily in the last few years due to increase in number of multiplexes in both larger

cities and towns, digitisation of single screens and growth in regional cinema and we expect this trend to continue.

FORECAST FOR 2019

Cinema has grown by a phenomenal 37% in 2018,

taking Adex to Rs 805 crore on the back of improved

expansion of Digital distribution, infrastructure

and emergence of multiplexes in smaller

towns. Despite this huge growth, Cinema has a share of little more than 1% in the

total advertising pie. It is expected to grow at 14% in 2019, and cross the Rs 1,000 crore mark to reach

Rs 1,047 crore

1.0% 1.06% 1.06% 1.10% 1.32% 1.48%

2014 2015 2016 2017 2018 2019P

`1,047GROWTH %

SHARE OF ADEX

YE

AR

LY S

PE

ND

S (R

s C

RO

RE

)

30%21%

11%

37%

CINEMA ADEX

`805`586

`523

`465

`385

12% 12%

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20 21

In 2018, the Out of Home (OOH) market grew by 9% and now stands at Rs 3,365 crore. Organised Retail, Consumer Services and Real Estate were the top three categories that contributed to OOH; OTT players are emerging as big spenders

on the medium. In 2019, Outdoor advertising is expected to grow by 11% to reach a size of Rs 3,750 crore

GOOD VIEW

In 2018, OOH crossed the Rs 3,300 crore mark and saw a growth of 9%, almost at par with our projection of 10%. Transit Media grew by 8.5%, as against projected growth of 8%, and Outdoor grew by 9.3%, bringing the overall

growth to 9.1%. Over last seven years, OOH is one sector that has maintained its contribution to the total media pie at 6%.

Organised Retail, Consumer Services & Real Estate continue to be the top three categories in terms of contribution to OOH.

Highest growth was recorded in consumer services category (33%), followed by Organised Retail (24%) and then Real Estate (18%); the top three categories contributed to more than 75% of the overall growth.

FMCG, which is the biggest category in Adex, has also started to use OOH heavily and now contributes 9% to the overall OOH Spends. FMCG in OOH medium has recorded a growth of 18% in spends as compared to 2017.

OOH

We expect Outdoor to grow by 11% in 2019, taking the total Outdoor Advertising Market to Rs 3,750 crore. Billboards will continue to be the largest revenue contributor, although metro line, malls and airports continue to boost the category size. Emerging categories like OTT have begun to dominate OOH in key metro markets. Digital screens are slowly but surely growing in number and will in a couple of years contribute to this medium’s growth.

FORECAST FOR 2019

6% 6% 6% 6% 6% 5%2014 2015 2016 2017 2018 2019P

`3,750GROWTH %

SHARE OF ADEX

YE

AR

LY S

PE

ND

S (R

s C

RO

RE

)

11%14%15%

9%

OOH ADEX

`3,365`3,085

`2,910

`2,665

`2,333

9%6%

CATEGORY CONTRIBUTION &CATEGORY GROWTH IN OOH IN 2018

Oganized Retail Hospitals, Restaurants, Education, OTT

Real Estate & ConstructionFMCG

Financial ServicesTelecom

AutoMedia

E-CommerceElectronic Durables

Petroleum/LubricantsPharmacy

EnergyOthers

TOTAL

5484804123152922482321781318121200

407

3,365

16%14%12%9%9%7%7%5%4%2%1%1%0%12%

100%

14%24%14%18%15%-13%4%15%7%16%-14%-17%-18%-5%

9%

6793504738-37923811-3-40

-20

280

24%33%18%17%13%-13%3%8%3%4%-1%-1%0%-7%

100%

OOH – 2018

Product Category

Category Contribution

in %

Category Growth %

2018 / 17

Contribution to Growth

in %In Rs crIn Rs cr

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DIGITAL UP, UP AND AWAY

Digital grew by 26%, adding Rs 2400 crore to

Adex, to reach a size of Rs 11,705 crore in 2018. It now

contributes a whopping 19% to Indian Adex, with

Video advertising and programmatic advertising

gaining ground. Digital advertising is projected to cross the Rs 15,000 crore

mark on the back of Video, e-commerce and Regional

languages, and grow to Rs 15,612 crore in 2019

11% 12% 15% 18% 19% 22%2014 2015 2016 2017 2018 2019P

`15,612GROWTH %

SHARE OF ADEX

YE

AR

LY S

PE

ND

S (R

s C

RO

RE

)

33%29%30%

26%

DIGITAL ADEX

`11,705`9,303

`7,315

`5,120

`3,970

43%

27%

DIGITAL ADEX OVER LAST 3 YEARS - IN RS CRORE

PLATFORM 2016 2017 2018MOBILE 4,490 7,256 9,949DESKTOP 2,825 2,047 1,756

Total 7,315 9,303 11,705

DIGITAL ADEX OVER LAST 3 YEARS - IN RS CRORE

VERTICAL 2016 2017 2018SEARCH 2,255 2,632 3,475DISPLAY + PROGRAMMATIC + AD NETWORKS

3,270 3,162 3,827

VIDEO 1,640 3,339 4,183OTHERS 150 170 220

Total 7,315 9,303 11,705

FORECAST FOR 2019 We expect the Digital medium to further accelerate its growth trajectory and grow at 33% in 2019. At this rate, Digital is expected to cross the Rs 15,000 crore mark on the back of Video, e-commerce and Regional languages. More advertisers will begin to look at OTT platforms, excluding Facebook, as an extension of TV rather than Digital.

FMCG, BFSI and e-commerce will contribute significantly and will be growth drivers for Digital Marketing. Spends will be strongly focused on mobile and whether it is Search, Social or Video, about 90% of all ad impressions will be delivered on the mobile device.

The digital advertising market had an impressive growth of 26% in 2018. It has been growing at a compounded annual growth of 30%+ for the last 10 years and 24% for the last five years.

The continued growth of Digital is fuelled by mobile, online video and social media, which are increasingly attracting more advertising investment. Digital Adex at Rs 11,705 crore is 19% of Adex in 2018. It was only 9% in 2013.

Desktop display contribution to overall digital pie has further slowed down, as mobile has become the universal medium of choice today. Video advertising has gained traction rapidly and enjoys a massive 36% share of the digital market. Time spent on video consumption is almost 67 minutes per day, today. One of the key reasons for this growth has been the proliferation of OTT platforms. The OTT playing field has seen a 3.5x increase in number of players from just nine players in 2016 to 30 players now.

Programmatic buying has seen increasing traction, but the numbers are still not significant.

Google and Facebook continue to dominate digital spends, cornering 65% of the total digital advertising pie.

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10 YEARS OF INDIAN MEDIA

A VIBRANT DECADE

Indian media’s #10YearChallenge: A look at the principal changes it has

undergone over the last 10 years

Inspired by the popularity of the #10YearChallenge on social media, we bring you a glimpse of the changes that have occurred in Indian media over the

last 10 years. The last decade has seen the Indian advertising industry grow to thrice the size it was in 2009, crossing the Rs 60,000 crore mark in 2018, registering a CAGR of 12%. Growth came mainly on the back of Digital, which grew by leaps and bounds every year and clocked the highest growth rate of all media consistently. Internet penetration and adoption of digital media in India is growing at a rate faster than the world average, driven by affordable data and the smartphone revolution.

The last decade has seen a significant change in the pecking order of brands vis-a-vis the advertising pie. While Television continues to be the largest contributor to Adex with a 39% share, not so closely followed by Print at 32% share, Digital now is established as the third largest medium with a share of 19%, almost double the combined share of Radio + OOH + Cinema.

The categories that have contributed maximum to this growth of Print, Television and Radio are FMCG, Telecom, e-commerce and Auto. Emerging categories are e-Wallets and OTT players.

While Digital has grown substantially, traditional media has also grown significantly year on year with a compound annual growth rate of 10%, and even today, contributes more than 80% of total Adex.

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2009 2009 2009 2009 2009 20092018 2018 2018 2018 2018 2018

SHARE OF ADVERTISING PIE

43%41%

4%

19%

3%

4%

1%

1%

7%

6%

TV PRINT DIGITAL RADIO CINEMA OUTDOOR

INDIAN ADVERTISING

MARKET : 2009 & 2018

9%14%12%32%9%11%

38%

32%

Compounded Annual Growth Rate %

IN RS CRORE

`19,582

`60,908

2009

2018

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• Number of television channels has tripled in the last 10 years, largely on account of Regional and News channels.

• More than 2,000 new advertisers on TV, and more than 80,000 new advertisers on Print have been added

• In 2009, Top 50 advertisers contributed approximately 43% of the total Adex whereas in 2018, this number has gone down to 35%.

• In Print, in the last 10 years, contribution by English and Hindi publications in terms of volume has not changed and contributes to around 60%. However, in terms of growth of volume, adspace in Hindi publications has doubled over last 10 years. In terms of total volume, Print has grown by 73% over last decade, but significantly English which contributed 33% to volume in 2009 now contributes only 25%.

• In TV, in terms of genre contribution, on account of success of IPL and non-cricket leagues, revenue contribution of Sports genre has seen a major shift from only 3% in 2009 to 10% in 2018 and contribution of Hindi GEC has decreased by 10% whereas

Regional channels have seen a growth of 10%, confirming the long held belief that you have got to communicate with your Target Audience in their language to be effective.

• Government spending on TV & Print has witnessed an over 100% increase in ad spends since the Modi government has come to power, given the importance they ascribe to communicating with the public. This is further boosted by spends by political parties during elections.

• Till 2014, Print saw growth in double digit in most years; however, growth has tapered off in the last four years. Magazines as a medium have failed to gain advertiser interest for a few years now, and in recent years, it has seen negative growth.

• Science and data-based planning has finally arrived in OOH: Planning with most sites is being graded on multiple parameters and some baby steps are being taken to get traffic count. Airport advertising has now got firmly established and commands a healthy share of the OOH market.

• We have seen over the years that

We outline below a few more significant facts in the space of traditional and digital media that have

characterised the decade:

Adex is quite resilient, but certain mega interventions like demonetisation and GST did temporarily derail it.

• Digital predictably has seen the maximum change, growing in share from 4% to 19% over the decade.

• Reliance Jio, which helped reduce per GB data price from Rs 269 to a mere Rs 19, has led to a dramatic increase in video consumption.

• Internet penetration has increased from 4.2% to 41.4% over the decade.

• We have now become a mobile first economy, thanks to availability of cheap smartphones from leading Chinese innovators like Xiaomi, One Plus and Vivo.

• Facebook has grown from 7.45 million users in 2009 to 280 million today and with WhatsAapp, Instagram, Snapchat, Twitter, Quora and what not, social media contribute as much as 21% of the total Digital spend.

• Video has become a dominant force,

with India becoming the fourth largest consumer of mobile video ads.

• OTT has taken root and seems ready for take-off with a number of players, going from just nine players in 2016 to 30 OTT players today.

• We are now the world’s second largest smartphone market with a smartphone user base of 400 million.

• The last five years have seen languages entering Digital in a big way and language Internet users are expected to grow at a CAGR of 18% vs English users at a CAGR of 3%.

• Many e-commerce portals have now emerged among Top 10 Digital advertising platforms, and deliver very good ROI to advertisers.

• Voice has become an important driver of Digital with more searches on Internet dominated by Voice. Google Voice Search queries have increased 35% from 2009 to 2018 as per a Google Trends Report.

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This year, there are five new entrants to our Top 50 Venerable list. They are Parle Biscuits, AMFI, Xiaomi, Britannia and Kent.

Not surprisingly, four out of top 10 advertisers are from the FMCG sector but the list includes advertisers from diverse categories like Telecom, Auto, e-commerce and consumer durables, too.

HUL, Amazon, P&G and Reckitt Benckiser continue to be the top four advertisers of India in 2018, as they were in 2017.

In keeping with the tumultuous year, there are a large number of shifts in the pecking order, with 26 advertisers gaining rank and 16 advertisers dropping rank. One of the biggest change in this year’s list is Patanjali who has dropped from Rank 5 in 2017 to Rank 32 in 2018.

Among those who moved up many ranks

are Flipkart (+11), Reliance Industries (+8), TVS Motors (+9), Honda Motors (+8), Google (+7), Vodafone (+7) and Airtel(+6). Those who lost rank are Patanjali (-27), LIC (-10), Tata Motors (-15), Mondelez (-6) and Pepsi (-12).

The Top 50 advertisers account for 35% of the advertising market. This number is significant, considering that there are over 2 lakh advertisers in Print and over 12,000 advertisers in TV. The Top 10 advertisers continue to account for as much as 16% of the total market and contribute to 46% of the total 50 list.

We may mention that many Madison clients feature in this list, but we hasten to add that we have not used any confidential information that we are privy to and arrived at our list and ranking using a standard, structured process. A note of caution: some advertisers who are in our list may well be in reality below Top 50 and vice-versa.

ADVERTISERS OF 2018The Top 50 advertisers in the

country account for 35% of the advertising market

Rank in 2018 Rank in 2017 Change in Rank

Advertisers Approx Spends in Rs crore

1 1 0 Hindustan Lever 3,100 – 3,400

2 4 2 Reckitt Benckiser 700 - 850

3 3 0 Procter & Gamble 700 - 850

4 2 -2 Amazon 700 - 850

5 6 1 Maruti Suzuki 650 - 750

6 8 2 Samsung India 650 - 750

7 15 8 Reliance Industries 600 - 700

8 16 8 Honda Motorcycle & Scooter 600 - 700

9 12 3 Vivo Mobiles 550 - 650

10 7 -3 Godrej Consumer Products 550 - 650

11 17 6 Bharti Airtel 450 - 550

12 10 -2 Hero Motocorp 450 - 550

13 24 11 Flipkart 450 - 550

14 21 7 Google 450 - 550

15 14 -1 ITC 400 - 500

16 13 -3 Glaxo Smithkline 400 - 500

17 11 -6 Mondelez 350 - 450

18 19 1 Emami 350 - 450

19 23 4 Mahindra & Mahindra 350 - 450

20 27 7 Vodafone India 300 - 400

21 20 -1 Colgate 300 - 400

22 28 6 Coca Cola 250 - 350

23 26 3 L’Oreal India 250 - 350

24 33 9 TVS Motor 250 - 350

25 22 -3 Marico 250 - 350

26 32 6 Bajaj Auto 250 - 350

27 29 2 Hyundai Motors 250 - 350

28 18 -10 Life Insurance Corp Of India 200 - 300

29 37 8 Apple 200 - 300

30 30 0 Nestle 200 - 300

31 38 7 Honda Cars 200 - 300

32 5 -27 Patanjali 200 - 300

33 39 6 Titan 200 - 300

34 31 -3 Idea Cellular 200 - 300

35 40 5 Asian Paints 200 - 300

36 47 11 Wipro 200 - 300

37 41 4 Vini Products 200 - 300

38 45 7 Future Retail 200 - 300

39 35 -4 Johnson & Johnson 150 - 250

40 25 -15 Tata Motors 150 - 250

41 34 -7 Dabur India 150 - 250

42 46 4 Ford India 150 - 250

43 New New Parle Biscuits 150 - 250

44 42 -2 Renault India 150 - 250

45 New New Association Of Mutual Funds In India 150 - 250

46 48 2 Amul 100 - 200

47 New New Xiaomi 100 - 200

48 36 -12 Pepsi 100 - 200

49 New New Britannia 100 - 200

50 New New Kent 100 - 200

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