This Year, Next Year

India Media Forecasts

June 2010

Summer Update
FY 2010 (Apr09-Mar10) has closed at an AdEx growth of 6% vs. FY 2009 Jan-Mar10 has seen a significant upswing in spends from traditional large spenders such as FMCG and Telecom as well as categories that had previously seen a dip: financial services, auto and retail. This upswing has nd continued into the 2 quarter of the year with IPL cricket season receiving significantly more spends than it did last year. With the onset of what appears to be a good monsoon and strong GDP rates, we look forward to a 14% growth in Advertising Expenditure in FY11 vs. FY10. The rest of the year expects to see over 10 new launches each of car brands as well as new insurance products.
Media, INR Cr TV Radio Newspapers Magazines Cinema Outdoor Digital Retail media Elections Media total 2007 Value % Contrib 7110 36 590 3 9290 47 760 4 75 0 1398 7 390 2 225 1 19,838 Value 8,400 880 10,033 850 100 1,448 600 312 22,623 2008 % Contrib % Growth 37 18% 4 49% 44 8% 4 12% 0 33% 6 4% 3 54% 1 39% 14% Value 8,820 1,012 9,832 808 110 1,300 738 312 350 23,282 2009 % Contrib 37.9 4.3 42.2 3.5 0.5 5.6 3.2 1.3 1.5 % Growth 5% 15% -2% -5% 10% -10% 23% 0% 3% Value 9914 1113 10363 808 121 1300 923 312 24,853 2010 % Contrib % Growth 39.9 12% 4.5 10.0% 41.7 5% 3.2 0% 0.5 10% 5.2 0% 3.7 25% 1.3 0% 7% Value 11897 1336 11088 864 133 1430 1199 343 28,290 2011 % Contrib % Growth 42.05 20% 4.72 20% 39.19 7% 3.05 7% 0.47 10% 5.05 10% 4.24 30% 1.21 10% 14%

Print (Dailies): Print is swinging back and is expected to show a growth of about 7%. This is driven by new launches in categories that were traditionally print heavy. Retail and consumer durables have seen strong growth in sales which is expected to fuel spends going forward. The new launches in auto and financial services of course give print a significant boost. Between players however, there is wide variation in growth levels, where some players have seen double digit growths and others have seen negative growths. This has been in part due to the economic strength of the respective regional markets Television: TV is enjoying a good run and is likely to clock 20% growth TV has benefited from both the traditional big spenders of FMCG and telecom as well as new launches. Revenues are strengthened due to 2 factors: 1. The industry is aggressively strengthening rates. This is helped by the fragmentation of viewing which leads to less overlapping viewers. As a result, to deliver the same reach, a plan now requires more channels. As channels get picked for incremental reach rather than merely to deliver frequency, the rate they can command improves 2. Improved viewership of regional language channels and the subsequent strengthening of their rates

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June 2010

Category Dependence %
Categories JAN- APR 2010 TV JAN- APR 2010 Print

Growth % YoY
JAN- APR 2010 TV JAN- APR 2010 Print

Auto BFSI Cons. Durables Corporate Display DTH Education Elections Events FMCG Industrials IT/ ITES Others Promo Real Estate Retail Services Social Ads Telecom

5.5% 7.0% 6.9% 2.7% 0.0% 2.4% 0.6% 0.0% 0.0% 49.5% 2.3% 1.7% 1.4% 0.3% 0.6% 4.3% 1.5% 0.1% 13.0%

5.8% 7.6% 4.0% 3.6% 4.8% 0.3% 7.4% 0.0% 3.3% 6.2% 0.6% 3.8% 5.8% 2.1% 5.2% 10.0% 5.5% 5.6% 3.1%

24.2% 27.5% 119.4% 50.9% -8.4% 85.0% 35.4% -98.8% -100.0% 33.9% 39.1% 84.6% -3.2% 137.9% 71.7% 29.7% 88.4% NA 96.4%

-15.3% 21.6% 9.0% 31.0% 194.8% 88.1% -14.7% -97.9% 2.4% 21.0% 26.8% 21.5% -0.7% 31.3% 35.9% 6.6% -10.7% -43.3% 45.0%

Radio: Expected to grow even stronger than last year at 20% The incumbent government channel All India Radio (AIR) 46%. Parliament / Lok Sabha Elections & National Congress Party elections contributed to approx 90 Cr. on radio. Due to recession, a lot of retail players looked at radio as a cheaper option (Oct to Dec 2009 & Jan-Mar 2010 most of the radio stations grew by 25% Vs an estimated 15% in the post recession scenario). FMCG / Telecom players / Consumer Durables - increased spends >15% (with all 3 categories contributing to approx 20% of overall radio monies) Going forward, rate inflation of 15% is expected with key players having announced hikes. The retail segment is increasing its spends in this medium. Hence, combined with volume increases, we expect to see at least 20% growths. OOH: Expected to show growth of 10% FY10 stayed against the same levels as FY09. Going forward the overall spurt of spending as well as new launches will result in increased money in outdoors also. There will of course be an impact of the Commonwealth Games. However, the extent is as yet unknown and is an unusual occurrence that will only impact the coming fiscal. 2011 expected to grow 10 % on back of additional inventory but will also depend on state of Europe and some global businesses. Digital As per IAMAI reports, the display numbers for 2009-10 has been Rs. 430 Cr. Which is a growth of 32% compared to the previous financial year. Over 25% of the media spends came from Online services (travel, job, matrimony etc.). As the economy stabilised, media spends showed an increase towards the last quarter of 2009. In 2010, we are already seeing inflation on some top sites and in some key properties. IPL on Youtube was able to draw advertisers. 2010 will see most categories increasing spends. Some of the large spends are likely to come from online shopping existing brands or new brands setting up online sales channel. Search and mobile advertising will also be key growth drivers. Search is expected to grow by 25-30%. The growth areas for the key players (read : Google, which covers over 90% market share ) are going to be broadly in three areas Online Search - Currently with Search volume pegged at 2.8 Bln Search queries per month (apr'10 data) with categories such as entertainment, telecom and technology registering a search volume growth of over 5075% on query terms. This is due to the concerted effort of Google trying to integrate search database of different Genre such as bollywood, Finance and News besides enabling itself to track activities on Social Media sites such as Facebook and Twitter as part of its Searches.
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This Year, Next Year India Media Forecasts

Mobile Search - Of the total Search queries on Google, a whopping 27% of the Searches happen on Mobile...i.e. people accessing Google Wap on mobile. Content Network - The avenues of growth is only expanding by the day with more and more sites both content and social networking sites incorporating Search ads through contextual targeting (through google or on its own). Google has further consolidated its position as the largest Ad network, by offering image and rich media creative options to the search advertisers like never before, with long tail sites across categories. Another area of Growth on Content piece and which is supposed to be the growth engine for Google is 'YouTube' , which has led one of the successful content tie-ups in online history in IPL-3. This is besides ever growing video content (both User generated as well aggregated) on the site, with a precision targeting technology in terms of content and demographics, has led to a 20-30% growth in traffic.

Growth Implications on Online Ad Industry With the Google covers 80% of the entire online universe (estimated to be 100 Million Unique Visitors), advertisers will continue to increasingly have Google as part of its online media plan. The Ad Industry is already witnessing categories such as FMCG, Auto, Technology and Telecom expanding their online pie in favour of Search Marketing.

Key happenings in the mobile space where most of the operators are opening up their inventory for advertising are: Mobile is becoming a part of every integrated plan (even for brands who may not use other digital media) More consumer exciting formats have been introduced which allow rich media creative Flash, Video streaming Usage of Advanced platforms such as Augmented reality, Location based advertising will be the future on Mobile advtg Introduction of 3G - Mobile Social Media, Utility Applications & Mobile TV will become a reality Retail Media As predicted in the last report, this medium stays flat. Digital networks have dropped revenue while the usage and spends on mall space has gone up. This is being driven more in smaller markets, where the relative difference in rates vs. larger towns has lessened and local Cinema The last 18 months have seen the demise of the minimum guarantee (MG) system. Theatre chains have begun selling directly to clients. This has resulted in a drop in rates in some cases. On the other hand, Digital cinema share has gone up considerably. As a result, overall industry number is likely to have marginal growths.

This Year, Next Year India Media Forecasts 4

June 2010