Home >Industry >Advertising >Indian advertising market to see strong 13% growth: Warc

Mumbai: The Indian advertising industry is expected to register the strongest annual rise in advertising spend as compared to other markets in 2016, up 13.3% year-on-year, as per the latest Consensus Ad Forecast from Warc, the marketing intelligence service. The report indicates that this market will grow at a similar rate (13.4%) next year, as well.

Warc’s Consensus Ad Forecast report is based on a weighted average of ad spend predictions at current prices from ad agencies, media monitoring companies, analysts, Warc’s own team and other industry bodies. The sources for the report include Carat, eMarketer, GroupM, Magna Global, Nikkei Advertising Research Institute (NARI), Pitch-Madison, Pivotal Research Group and ZenithOptimedia.

While the Indian advertising market is expected to be a trailblazer, growing at 13.3%, global advertising spends were expected to rise by 4.5% during 2016 as a whole, before slowing to 4.2% in 2017, according to the forecast.

With the exception of newspapers and magazines, the statement said, all major media channels are expected to record ad spend growth this year and next. However, television which is expected to grow 2.8% year-on-year in 2016 from 2015, is forecast to register a softer growth of 1.1% in 2017 from 2016. The Internet which is expected to have grown 14.6% in 2016, is forecast to slow down to 13% in 2017 against 2016. The same is true for mobile advertising, though it is still set to be the fastest-growing ad channel in 2017 at 34.2%, compared with the 47.1% growth in 2016 against 2015.

“The latest consensus results present a positive outlook for advertising investment at both global and local levels. All 13 markets studied are expected to record ad spend growth in the short term, despite their contrasting socio-economic environments," said James McDonald, senior research analyst at Warc in a statement. “We have identified a common trend among more mature markets whereby increasing investment in internet—particularly mobile—ad formats is driving headline growth. Applying consensus trends to Warc’s ad spend data shows that mobile will grow to be the world’s third-largest ad channel by the end of 2016," he added.

According to the forecast, all 13 markets covered in the report, will see the amount invested in advertising rise both this year and the next. Though for eight of the markets—China, Spain, the UK, the US, Brazil, Italy, Germany and France—the growth rate will be softer next year.

India is expected to see the strongest annual rise in ad spend this year, up 13.3%, with a similar rate of growth anticipated next year. The world’s largest ad market, the US, is expected to post ad spend growth of 5.1% this year—buoyed by the presidential election campaigns and the Rio Olympics. US ad spend growth has been forecast to cool next year—rising by 2.8% only.

Despite the uncertainty surrounding the “Brexit" process by which the UK will leave the European Union in 2017, the nation’s ad market is forecast to record ad spend growth of 5.6% this year and 4.3% next; both above global respective rates.

France is forecast to record muted growth of 0.8% in 2017, the softest rate among the 13 markets studied.

All media, barring newspapers and magazines, are predicted to record year-on-year growth in 2017, with mobile expected to see the greatest ad spend rise, up 34.2%. Total internet (including mobile) growth is expected to be 13% next year, while television, the world’s largest ad channel by spend, is forecast to post growth of 1.1%.

In an earlier Mint report, Vikram Sakhuja, group chief executive officer, media and OOH, Madison, said that the consumer products segment will continue to drive growth of the Indian advertising industry. “…the 2013-16 demand growth continues to be fuelled by the bedrock of Indian advertising—the FMCG sector. It has invested, and reinvented itself and been a contributor to not only the TV industry but also print, and to an extent digital." His analysis was based on Pitch Madison Advertising Report 2016, which expected India’s advertising market to expand 16.8% in 2016 to Rs.51,365 crore. The annual report, jointly published by media agency Madison and advertising magazine Pitch, predicted a marginally slower rate of growth for most advertising media except digital.

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