MUMBAI: Video advertising growth will outpace the advertising growth on digital. Digital advertising, which is expected to corner Rs 12,337 crore in 2018, is projected to grow at 30% while video advertising growth has been pegged at 54%, according to GroupM’s annual ad forecast report “This Year Next Year’.
Video advertising growth will be aided by improvement in bandwidth as well as data and mobile device becoming more economical for the consumer.
Digital’s share of the total ad expenditure (AdEx) is expected to rise to 17.8% in 2018 compared to 15.5% in 2017. As ad spends on digital see an upswing, the issue of measurement and transparency will become of paramount importance.
Last year, GroupM globally led the conversation on measurement and transparency in digital media and released viewability standards that are higher than those stipulated by the Media Rating Council in the USA.
In India, GroupM is working with industry bodies, brands and publishers to adhere to a standard viewability index that would become integral to the digital ecosystem. Along with viewability, GroupM also held knowledge and training workshops for client teams, on mitigating ad fraud and assuring brand safety.
The GroupM has forecasted that the overall AdEx is expected to grow 13% to reach Rs 69,346 crore from Rs 61,263 crore in 2017. The AdEx in 2017 grew by 10%.
TV is expected to log a stronger growth in 2018 due to volume growth with free to air (FTA) channels as well as value with HD channels. The report pegs the TV AdEx to grow at 13% to Rs 31,596 crore. In 2017, the AdEx grew at 10% to Rs 27,961 crore. Cable TV digitisation is also expected to aid rural viewership.
Speaking about the TYNY 2018 report, WPP India country manager, and CEO, GroupM South Asia CEO CVL Srinivas said 2017 was one of the most difficult years where the AdEx growth was 10% compared to 12% in 2016 and 14% in 2015.
“As consumer sentiment stabilises and spending increases, we estimate 2018 to be a relatively better year from an ad spend perspective. Growth in digital media will continue to outstrip other media but unlike most markets, India continues to see traditional media formats grow. After a couple of sluggish years, rural volumes are expected to pick up this year leading to increased marketing budgets. The structural changes witnessed in the last couple of years could pave the way for a more stable outlook in the coming years. We haven’t yet realised our full potential as an ad market but are headed in the right direction,” Srinivas stated.
Continuing urbanisation and rising wages are supporting consumer growth in finance, durables, services, and retail. E-commerce is becoming a key channel for FMCG, and ad investment is anticipated to increase in shopper and performance marketing. India is witnessing an increase in spending from rural markets, as sales growth at 1.5-2.5X of urban sales growth for major FMCG and consumer durable companies.
He also said that early 2016 was when the first sign of sluggishness was seen and FMCG and e-commerce pulled back on spends. The structural changes that subsequently came in the form of demonetisation and GST added to the negative sentiments.
“Hopefully we are getting back to more positive numbers. Besides FMCG – E-commerce, Tech/ Telcos, Auto and BFSI will be the growth drivers in 2018. India is a unique market where all media have headroom to grow. India is the fastest growing ad market in APAC and among the fastest growing markets in the world,” he noted.
The report also stated that India remains one of the fastest growing ad markets globally, and is among the top five countries that are expected to drive incremental investment in 2018. “Our growth percentage is three times that of the global AdEx and more than double of the APAC growth percentage,” said GroupM chief growth officer South Asia Lakshmi Narasimhan.
On the traditional media front, parliamentary elections in H1 2019 will stimulate advertising from the second half of 2018. Print will see a slight uptick in 2018 from the elections, with key markets in demand. The growth rate for newspapers is estimated at 4.2% with English papers growing slower than Hindi and regional newspapers.
Radio is expected to grow at 15% which is higher than the last couple of years. This growth is predominantly due to the launch of new radio stations across the country. Other media such as OOH will witness good traction of 15% growth from premium transit sites. Cinema will continue to grow at 20% in 2018, as the infrastructure investment made last year will attract a larger audience to theatres for a blockbuster experience.
FMCG continues to be biggest advertising category across media with 27% of total AdEx followed by e-commerce (8%), auto (8%), and retail (7%). The top 4 categories have 50% share of the AdEx. Tech/telco, BFSI, services, education, consumer durables, and real estate have 26% share of the AdEx while others comprise 22%.
The report also presented some of the biggest media trends that will emerge in India in 2018. As cross-platform marketing is the norm in today’s connected environment, these trends are around data, content creation and distribution and sports programming. The common thread across the 2018 media trends is the digital platform, which is core to the growth of media in India.
This Year, Next Year, is part of GroupM’s media and marketing forecasting series drawn from data supplied by holding company WPP’s worldwide resources in advertising, public relations, market research, and specialist communications. The TYNY report is an understanding of the estimated media spends by advertisers in the current year. It also highlights some of the industry sectors that will have a major effect on advertising spends across media.