Advertising expenditure in India expected to grow at 13.2% to Rs69,347 crore this year
New Delhi: Advertising expenditure in India is expected to grow at 13.2% to touch Rs69,347 crore in 2018, according to a mid-year forecast by WPP-owned media agency GroupM in its June report ‘This Year Next Year (TYNY)’.
GroupM had in February forecast that ad expenditure would grow at 13%. Recently, IPG Mediabrands-owned media agency Magna had predicted that Indian ad expenditure will grow at 12.5% to touch Rs68,000 crore in 2018.
Sports and elections will drive television advertising in India, according to the GroupM report. Although print will grow at a slower rate (around 4%), election spending will provide relief. Radio is expected to do well, driven by local-focused categories such as retail, services and e-commerce. Cinema and outdoor, which is growing at 20% and 15% respectively, will see good growth as technology adoption increases and makes them more ad-friendly. Digital, the fastest growing medium of the media pie, will continue to grow at 30% to reach Rs12,337 crore.
The initial estimates show that ad expenditure will pick up in 2019, growing at 14.2% to touch Rs79,165 crore. The majority of spends will come from television (45.6%), followed by newspapers (23.7%) and internet (20.3%).
“The Indian adex seems to have rebounded from the sluggishness we saw in 2017. We expect 2019 to be better than the current year,” said C.V.L. Srinivas, country manager, WPP India and chief executive officer, GroupM South Asia.
Automobile ad growth is expected to be high next year as car, scooter, luxury bikes and commercial vehicles will see good sales growth in 2019, driven by urban demand and infrastructure investment. Telecom ad growth will be driven by mobile handsets.
Packaged consumer goods ad spends will be modest given the prospect of higher raw material costs affecting margins. Consumer durables ad spends will witness average to high growth because of low penetration in consumer appliances, shorter replacement cycles and extreme weather conditions.
Service sector ad growth will be strong as travel and hospitality, healthcare and logistics are expected to perform well in 2019. The travel market, stated the report, is set to touch $40 billion by 2020 and logistics will benefit substantially from the implementation of GST.