New Delhi: India continues to be the highest spending and fastest growing advertising market globally, according to the latest report by Carat, the global media agency under Dentsu Aegis Network.
The agency on Thursday released its Global Ad Spend Report for the year 2016-17 which shows that India’s advertising expenditure is expected to accelerate by more than 12% in 2016, with multiple media events such as the T20 Cricket World Cup, the Indian Premier League (IPL) and state elections taking place. The growth is expected to continue at 13.9% in 2017.
In terms of media channel growth, the report states that India is one of the few large markets where all traditional media platforms still show growth. Television continues to hold the highest share of spending at 38.5% in 2016 and 38% in 2017. It is forecast to grow by 12.3% in 2016 and 12.5% in 2017 driven by spending by packaged consumer goods brands and e-commerce companies.
Last month, however, media agency Madison Media released a mid-year review of its Pitch Madison Advertising Report 2016 which downgraded the growth rate for television advertising.
TV grew at 11% in the first six months of 2016 as opposed to the expected forecast of 20%, the mid-year review said. The slump was attributed to a slowdown in ad spending by e-commerce companies.
The agency also wrote down its full-year estimate for advertising spending across media to 13.2% from the 16.8% it had projected in February this year. In the first six months, it grew 12.9%.
Madison stuck to its original estimate of 10% growth for print advertising despite this growing only 9% in the first six months. The agency’s mid-year estimate also seemed to suggest that digital advertising is gaining ground faster than expected. The agency had originally estimated growth of 30% for the year. Digital advertising grew by 37% in the first six months.
In comparison, the Carat advertising growth estimates are conservative. Ashish Bhasin, chairman and CEO (South Asia), Dentsu Aegis Network, said that Carat had anticipated that the advertising spending in India will grow by 12% in 2016 and “in our latest forecast, we continue to maintain that.”
He added that the agency expected better growth in 2017. “We also anticipate that given the tailwinds through the macro economic factors, GST (goods and services tax) and other reforms, 2017 will have an even better growth of 13.9%. Digital will continue to be the fastest growing medium, accelerating both its growth rate and its relative market share in 2017. Mobile will drive the digital growth immensely and India will transform into mobile-only market very rapidly, aided by better broadband penetration and drop in data rates,” he said.
According to the Carat report, newspapers represent the second largest media with 35.7% share of total spending in 2016, and this is expected to continue to grow by 10.5% this year and 10.8% in 2017.
Although digital is the fastest growing medium in the country (31.5% in 2016 and 39.6% in 2017), its share of spending (8.9% expected in 2016 and 10.9% in 2017), still remains relatively low compared to the traditional media.
The report said that India is gradually transitioning from a mobile-first to a mobile-only country with spending on the mobile medium forecast to grow by 27.2% in 2016 and 35.1% in 2017.
For global advertising spending, the report predicts growth in 2016 at 4.4%, supported by major media events, including the US presidential elections, the Rio 2016 Olympics and Paralympics, and the UEFA EURO 2016 football championship. Global advertising spending is expected to hit $548.2 billion this year.