Live Markets »News & Advice»Latest Stories»Latest Stories Details
Latest Stories Details
Back

GroupM forecasts India's advertising expenditure to grow 13% in 2018

Viveat Susan Pinto/Mumbai 13 Feb 18 | 09:05 PM

The country’s largest media agency network GroupM has forecast a 13 per cent advertising expenditure (adex) growth for the domestic market in its latest report, ahead of peers Magna (part of IPG Mediabrands) and Dentsu Aegis Network (Dentsu). Magna had estimated a 2018 adex growth of 12.1 per cent recently, while Dentsu had forecast an adex growth of 12.5 per cent for the year. 

GroupM’s current estimate is an improvement over 2017 when adex growth was pegged at 10 per cent. Dentsu and Magna had also forecast lower growth rates last year at 9.6 per cent and 11.1 per cent respectively as marketers reined in ad spends following demonetisation and implementation of the Goods & Services Tax (GST).

Related Stories

    No Related Stories Found
Widgets Magazine

But as the market stabilises, GroupM says that categories such as print, television, digital, out-of-home and radio are expected to pick up in terms of growth rates, led not only by an increased need to advertise among companies, but also on the back of state-level elections to be held later in the year. Almost eight states will go to the polls this year including big ones such as Rajasthan, Karnataka and Madhya Pradesh even as the country prepares for the general elections next year.

Print, in particular, is expected to gain from the election spending despite political parties focusing their attention on social media, GroupM said, in a bid to catch the attention of young voters. CVL Srinivas, country manager, WPP India and chief executive officer, GroupM South Asia, says, “2018 will be a relatively better year from an ad spend perspective. But while growth in digital will outstrip other media, India will continue to see traditional media formats also grow."

This broad-based growth across media will also mean that India will remain among the fastest growing ad markets in the world, moving into the top ten this year from eleventh position last year, Lakshmi Narasimhan, chief growth officer, GroupM South Asia, said. 

India will also drive incremental ad spends in 2018 along with a few other countries including the US, China, Argentina and Japan. While India’s contribution (to incremental ad spends) is estimated to be only five per cent in 2018, this is expected to grow in the coming years, GroupM said, as market dynamics steadily evolve. Some other countries, whose contribution to incremental ad spends this year is expected to be in single digits only include Japan and Argentina, GroupM says, at six per cent each.

Independent experts and agencies such as Magna have already said that India is likely to get into the top five ad club in about five years from now by which time the domestic ad market will be over Rs 1 trillion in size. The world’s leading advertising markets currently include countries such as the US, China, UK, Japan and Australia among others.

groupM graph

Overall, India’s ad market for 2018 is estimated to touch Rs  693.47 billion in size vis-a-vis Rs 612.63 billion last year. This will be led by a 30 per cent growth in digital spends, followed by a 20 per cent growth in cinema spends, 15 per cent growth in out-of-home and radio spends each and a 13 per cent growth in television spends.

Print advertising while growing at the rate of just four per cent for the year (2018) will still help India push up its ranking for the category in the world. According to GroupM, India’s print advertising market, pegged at Rs 184.37 billion for 2018, will be the fourth largest in the world, up from the fifth position last year. 

Television advertising, pegged at Rs 315.96 billion for 2018, will be eighth largest in the world, up from the ninth position last year. And digital advertising, pegged at Rs 123.37 billion for 2018, will retain its ranking as the fifteenth largest in the world, GroupM says.

Despite its ranking, the growing importance of digital is not lost on advertisers as well as ad and media agencies in the country. Digital advertising, says GroupM, will contribute nearly 18 per cent to adex in 2018, up from 15.5 per cent in 2017. Print advertising, on the other hand, will come down to about 26.6 per cent in terms of adex share in 2018 from 29 per cent last year and television advertising will remain steady at 45.6 per cent.

Among advertising segments, fast moving consumer goods companies will contribute 27 per cent to adex in 2018, followed by e-commerce and auto majors at eight per cent each and retail companies at seven per cent respectively. Technology and telecommunication providers will contribute six per cent to adex this year, followed by banking & financial services companies at five per cent. 

Widgets Magazine

Sensex

Company Price Gain (%)
Sun Pharma.Inds.601.656.91
Yes Bank381.752.87
ICICI Bank332.302.17
Axis Bank618.302.15
Reliance Inds.1,210.952.00

Poll

Currently No Poll Available.

Online Portfolio

You can create Online Portfolio here using the below button.

Widgets Magazine