AD Agencies
Lower e-commerce spending slows down TV ad growth: Madison
MUMBAI: H1 2016 has not been a good time for the advertising industry – TV specially – according to leading Indian ad agency Madison Media.
Against the projected 20 per cent TV ad growth for the full year, only 11 per cent growth has been achieved in H1 2016. This compares poorly with the gee-whiz 35 per cent growth rate achieved in H1 2015 over H1 2014 on the back of a substantial increase in e-commerce spends and the ICC World Cup.
The drop in the TV ad growth rate is also the main reason why the total ad market growth in H1 2016 has only been 12.9 per cent, says Madison Media. This has led to a downgrade of the earlier projected growth rate for 2016 from 16.8 per cent to 13.2 per cent. The drop in value of advertising growth has been accompanied by a reduction in the volumes of adverts on most TV programming genres, with the exception of Hindi movie and Kannada channels.
The Madison-Pitch report says that the TV industry attracted around Rs 10,198 crore in ad spending in H1 2016 as compared to Rs 9186 crore in H12015. FMCG advertisers splurged 16 per cent more in H1 2016 at Rs 5,346 crore (Rs 4,622 crore in H1 2015) but contributed 72 per cent to the growth rate of the industry. E-commerce as a category shaved spending by 37 per cent as it fell from Rs 629 crore in H1 2015 to Rs 394 crore in H1 2016.
“The drop in growth rates in TV is led by a lower contribution of e-commerce which is a category known to pick and choose high priced inventory / impact programmes and substituted by FMCG users who resort to everyday advertising and seek high value for money,” explained Madison Media & OOH CEO Mr Vikram Sakhuja.
Clothing fashion and jewelry ad spending also slipped into the negative zone with a 22 per cent plunge from Rs 308 crore in H1 2015 to Rs 241 crore in H1 2016.
The telco internet and DTH segment, however, maintained its growth of last year with spends of Rs Rs 1198 crore (Rs 1068 crore in H1 2015),
In a release sent out last week, Madison Media said it expects this trend to continue and if it does, the overall ad industry should be on course to hit a spend of Rs 50,000 crore by end 2016. However, the agency says it is culling down its TV growth rate number from 20 per cent to 11 per cent.
Which Madison World chairman Sam Balsara says is not good news at all. “The drop in growth rate of TV advertising does not augur well for the economy as generally a spurt in ad spends leads to higher GDP growth.”
AD Agencies
Omnicom to divest $2.5 billion businesses in 12 months: CEO John Wren
Group doubles synergy target to $1.5bn as jobs, brands and markets go
NEW YORK: Omnicom Group is preparing to divest or exit businesses generating about $2.5 billion in annual revenue, stepping up a sweeping portfolio overhaul after its $13.25 billion acquisition of Interpublic Group.
Speaking on the group’s fourth-quarter earnings call, chairman and chief executive officer John Wren said Omnicom had already sold or exited units worth more than $800 million in annual revenue and expects to complete the remaining disposals within 12 months.
The company is also scaling back in smaller markets, shifting from majority to minority ownership in businesses accounting for roughly $700 million in revenue. These markets, Wren said, are no longer central to Omnicom’s long-term strategy.
Following the IPG merger, Omnicom has doubled its targeted annual run-rate synergies to $1.5 billion over the next 30 months, from an earlier estimate of $750 million. Management expects to capture $900 million of those savings in 2026 alone, with around $1 billion coming from labour cost reductions as overlapping corporate, network and operational roles are eliminated.
Further efficiencies will flow from simplified regional and brand structures, consolidated resources, and faster outsourcing and offshoring under a unified operating model. In December 2025, the group said it would cut more than 4,000 jobs and fold several agency brands into larger networks.
Wren also underlined stepped-up investment in automation and artificial intelligence to lift margins and sharpen client servicing amid intensifying competition.
The board has authorised a $5 billion share buyback, including a $2.5 billion accelerated repurchase programme, while committing continued investment in media, commerce, consulting and data capabilities.
Omnicom reported a 27.9 per cent rise in fourth-quarter fiscal 2026 revenue to $5.53 billion, reflecting organic growth and one month’s contribution from IPG, compared with $4.32 billion a year earlier. Wren said the IPG combination strengthened the client roster, citing new or expanded mandates from American Express, Bayer, BBVA, BNY, Mercedes-Benz and NatWest Group.
