GroupM forecasts lower growth rate for TV ads in 2017

Television advertisements are likely to witness a lower growth rate in calendar year (CY) 2017 when compared to demonetisation-hit CY 2016, according to media agency GroupM. On the positive side, it said that the overall advertisement expenditure (adex) would grow at 10 per cent in CY 2017.

Releasing its annual forecast "This Year Next Year" (TYNY) 2017, GroupM estimates that the overall adex in CY 2017 would be Rs 61,204 crore as against Rs 55,671 crore in CY 2016.

Read: Indian ad industry may not have grown at 17% in CY 2016 as projected

The bad news is reserved for television adex, a segment which is likely to grow at eight per cent to Rs 27,378 crore, unlike the 10 per cent growth in CY 2016 at Rs 25,530 crore. Its share in the overall advertisement pie is also expected to fall marginally to 44.7 per cent from 45.5 per cent in CY 2016.

"After many years, the FMCG growth rate is slower than overall AdEx growth rate, and TV growth rate is lower than the overall AdEx growth," CVL Srinivas, GroupM CEO, South Asia, was quoted as saying by the Television Post.

The 12 per cent growth rate in overall revenues for CY 2016 was lower than the 15.5 per cent projected for the year in January 2016. Demonetisation affected adex in the last two months of CY 2016.

The slowdown in adex from traditional advertisers such as FMCG, e-commerce and telecom is likely to be offset by spending by political parties in view of elections to states, though the first quarter (January-March 2017) is likely to see tepid growth.

Another silver lining will be the advertisements coinciding with sporting events such as the upcoming India-Australia Test Series, IPL 10 and FIFA Under-17 World Cup that will be played in India. The recently-concluded India-England Test, ODI and T20 series were also apparently a good one for India. Advertisers and media experts are of the view that whenever India are seen as winning, the viewership goes up and so does advertisements.

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"This year, we expect sports to continue to do well. We expect HD to do well. We are seeing a lot of growth in HD although it's a very small base. We also expect some FTA channels to do well considering the reach and the value proposition that they deliver," Rao said.

Signalling the shift in viewership from other segments to digital, the GroupM report projects ads in the digital space to grow at 15.5 per cent in CY 2017 as against 13.1 per cent in CY 2016.