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ZenithOptimedia predicts India AdEx to grow at 13% in 2016, TV at 15%
MUMBAI: Driven by e-commerce, telecom and mobile phones, the overall advertising expenditure in 2016 is set to grow by 13 per cent in India, according to a new forecast by ZenithOptimedia.
Television will largely fuel the growth of AdEx with a 15-per cent jump, while print industry (newspapers) AdEx will grow at 10 per cent.
Further, on a lower base, digital medium will continue to grow upwards of 20 per cent, while other media are predicted to grow between 5–10 per cent.
ZenithOptimedia pointed out that ad spend growth is slowing down in three out of the four BRIC markets that were responsible for much of last decade’s ad market expansion.
India, in fact, is the only BRIC market which continues to combine rapid growth and a large scale, making it a distinct hot spot of ad spend growth. The market is benefiting from sustained, healthy economic growth and rising personal consumption. With ad spend growing at double-digit annual rates here, ZenithOptimedia expects the market to expand by $3 billion between 2015 and 2018.
ZenithOptimedia India group CEO Anupriya Acharya said, “It’s been over 18 months of the new government led by Prime Minister Narendra Modi. Last year this time, it had captured the collective consciousness of the country and we entered 2015 with a strongly positive consumer and business sentiment. This irrational exuberance has tempered down to a more rational optimism and all the current economic and sentiment indicators suggest that the forward view remains positive.”
“Our growth forecast for India ad expenditures for 2016 holds at 13 per cent. TV largely fuels this at 15 per cent and print, newspapers, at 10 per cent. Digital is expected to grow upwards of 20 per cent while all other media are expected to grow at 5–10 per cent,” she said.
The media outlook report for 2016 said that e-commerce, telecom and mobile phones are expected to have the maximum growth followed by automobiles and FMCGs.
Asian (China, India, Indonesia, Malaysia, Pakistan, the Philippines, Taiwan, Thailand and Vietnam) economies are growing extremely rapidly as they adopt Western technology and practices.
However, as China accounts for 74 per cent of ad spend in Asia, its slowdown naturally has a large effect on the region as a whole. “We expect ad expenditure in fast-track Asia to grow 8.9 per cent in 2015, and at an average rate of 8.4 per cent a year between 2015 and 2018, down from 14.7 per cent a year between 2009 and 2014.”
Meanwhile, on a global level, ad expenditure will grow 4.7 per cent in 2016, reaching $579 billion by the end of the year. This will be a 0.8 percentage point improvement on 2015.
Incidentally, 2016 is a ‘quadrennial’ year when ad expenditure is boosted by the Summer Olympics, the US presidential election and the UEFA football championship in Europe.
ZenithOptimedia expects global ad market to maintain stable growth of 4–5 per cent that it has enjoyed since 2011.
Globally, television is the dominant advertising medium, with a 38 per cent share of the total ad spend in 2015.
However, the agency predicts that the internet in 2018 will overtake television to become the largest single advertising medium.
“One of the reasons for television’s loss of share is the rapid growth of paid search, which is essentially a direct response channel (together with classified), while television is the pre-eminent brand awareness channel—and we expect it to remain so for many years to come,” the report said.
Audiovisual advertising as a whole—television plus online video—is gaining share of display advertising. Television offers unparalleled capacity to build reach, while online video offers pinpoint targeting and personalisation of marketing messages.
Moreover, in 2018 mobile advertising will overtake desktop and account for 50.2 per cent of all internet advertising. Programmatic advertising will account for more than half of digital display advertising (53 per cent) for the first time this year, and will increase its share to 60 per cent in 2016.
“We expect programmatic advertising to grow another 34 per cent in 2016 and 26 per cent in 2017, at which point two-thirds of global display will be programmatic,” the report said.