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Ad spend in India to see 12% growth in 2016: Carat

MUMBAI: T20 Cricket World Cup and the state elections will accelerate advertising expenditure in India, unlike in the other BRIC markets of Brazil, Russia and China where growth will stay muted.

According to global media network Carat’s latest ad spend report, India will witness a 12% growth in ad spend in 2016, marking 1% increase from last year. It estimates the ad spend in India to grow 13.9% in 2017.

TV will remain a dominant platform on which advertisers will bet their bucks. Consequently, TV advertising revenue in India is expected to grow by 12.3% this year, fuelled by strong spending from e-commerce companies and FMCG brands.

While globally ad spend on newspapers is declining, India continues to record growth in 2016 at 10.5%. Newspaper ad spend in India is supported by investment from e-commerce, automotive and a small contribution from government spending. Retail advertisers also continue to spend on print.

Although more and more advertisers are making use of the online video stream as an invaluable complement, the share of digital ad spend is still relatively low at 8.9% (estimated for 2016).

CARAT report YEAR ON YEAR GROWTH AT CURRENT

According to Carat, advertising spend globally will reach $538 billion in 2016, accounting for 4.5% year-on-year increase. This growth will happen on the back of big-ticket events such as the US presidential elections, Rio 2016 Olympics and the Paralympics, and the UEFA EURO 2016 Championships.

The report is based on data received from 59 markets across the Americas, Asia Pacific and EMEA.

The report forecasts digital to account for 27% of ad spend in 2016 and extend significantly to 29.3% in 2017, reaching $161 billion globally.

Paid search spend growth is coming from mobile as more and more consumers make search queries on-the-go via their smartphones and tablets. This is forcing advertisers to make bid adjustments for mobile and focus their attention on delivering their pay-per-click (PPC) ads onto the small screen.

Globally, paid search spend is forecast to grow by a healthy 10.6% in 2016 and 10.3% in 2017. It is expected to reach a solid 12.3% of the total advertising share this year and overtake newspapers share of spend in 2016 (11.2%) and 2017 (10.3%).

Key growth markets for paid search in 2016 include India (+48%), China (+20.8%) and Canada (+12.8%). Russia and the US also forecast double digit growth of +10.6% and +10.2% respectively in 2016.

Globally, the majority of the market share is commanded by TV at 42% in 2015 and is predicted to grow by 3.1% in 2016, courtesy of the Olympic Games and the US elections, which will garner significant TV viewership across markets.

Additionally, Carat’s forecasts reconfirm the steady decline of print in 2016. The report states that newspapers will decline by 5.4% in 2017 and magazines by 1.7% in 2016. It, however, highlights positive year-on-year growth in 2016 for all other media, including outdoor (3.4%), radio (2.2%) and cinema (2.8%), with the latter expected to grow further at 5% in 2017.