Home >industry >Ad spending in India to grow 12.5% in 2018: report

New Delhi: Advertising expenditure in India will grow 12.5% to touch Rs68,000 crore in 2018, IPG Mediabrands-owned media agency Magna said in an advertising forecast report released on Thursday.

In its revised report, the agency escalated the projection it had made in December of ad spending pegged to grow at 12.1%. The ad market had grown by 9.8% in 2017.

S. Venkatesh, executive vice-president, director intelligence at Magna said he anticipated an even stronger growth in 2019 due to a combination of an accelerating economy, broader access to digital media, general elections and the Cricket World Cup.

“At a 12.5% growth, India is the fastest growing country amongst the top 20 ad markets globally," said Hema Malik, chief operating officer, Lodestar and managing director, Magna. “Boosted economy especially in smaller towns and rural markets expand the grounds for consumerism across categories. These markets will offer newer versions of regional media platforms leading to acceleration in media growth."

Clearly, digital is driving this growth, contributing close to 40% of the incremental advertising rupee and projected to grow by 27% in 2018. It represents 19% of total advertising budgets currently and will touch a quarter share of media growing at CAGR of 22.6% by 2022. Retail, BFSI (banking, financial services and insurance), FMCG, telecom and auto are major contributors to this growth.

Television retains its strong position, thanks to support from FMCG firms, representing 40% share of the total budget growing at 12.2% in 2018 and expected to expand through 2022 at CAGR of 11.9%.

Print media is expected to witness renewed growth with elections in large states and the fact that as national polls loom, political parties are setting the stage for aggressive campaigning. Government spending on publicity will push print growth to 6.1%. The war between print and digital will intensify and by 2022, both will draw equal share of advertising budgets.

The report said that radio will be the third fastest growing media with a five-year CAGR of 11% through 2022. Meanwhile, OOH (out-of-home media advertising) will see high single-digit growth of 8.7%. The medium continues to be data scarce and shall remain a 3-4% share of total media.

“India is probably the only exception where print is growing despite double blows of demonetization and GST rollout," said Arun Sharma, chief operating officer, initiative and managing director, Magna. “It’s expected to show better growth in 2018 versus last year due to higher government spending, good monsoon and higher economic activity."

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