MUMBAI: After GroupM, Madison and Dentsu Aegis, the IPG Mediabrands has come out with its own estimate of the ad expenditure growth in 2017.
According to IPG MB Magna AdEx 2017 Forecast, the TV AdEx will grow at 10.3% to reach Rs 24,516 crore. TV’s market share of the total AdEx is expected to 41%.
The media agency’s forecast of TV AdEx growth is more optimistic compared to GroupM’s prediction of just 8% growth for the segment to Rs 27,378 crore.
Pitch Madison Advertising Report 2017, on the other hand, has projected 13% growth in TV AdEx to Rs 21,300 crore. Dentsu Aegis Network’s Ad Spend Forecasts – June 2017 has projected the ad growth for the category to be 12%.
According to IPG, the release of rural audience data by BARC India has opened up a new revenue stream in the form of free-to-air (FTA) channels. Quality localised content and HD experience will help regional TV to keep their audiences hooked.
It also said that sporting leagues outside of cricket is finding way to generate mass involvement and television will play a larger role. Star Sports Tamil demonstrating tangible results will increase fandom for local/state level formats, it noted.
In 2017, AdEx is estimated to grow at 11.5% to touch Rs 61,100 crore, predicts MAGNA, the intelligence, investment and innovation strategies agency of IPG Mediabrands.
Ad spends will be driven by sectors like social, fin-tech, and payment banks, telecom service, and content distribution platforms in addition to FMCG, auto and e-commerce
Overall, advertising revenue which accounts for 0.38% of the gross domestic product (GDP) is likely to grow at a CAGR of 12.6% to touch Rs 99,200 crore by 2021.
Within advertising, offline is estimated to grow at a CAGR of 9.7% while digital will grow at 25.5% in the next 5 years.
Mobile is projected to overtake desktop by 2020 while television is expected to remain the largest media in 2021 with a market share of 39%.
The report also stated that print media has been successful in guarding its revenues. However, it has been losing its share to digital year-on-year. The medium, which accounts for 36% of total AdEx, is expected to grow by 5.7% boosted by the government’s focused campaign to popularise their marquee initiatives.
Traditional sectors like auto, telecom and education will contribute to ad spend growth. After a gap of three years, the category will invigorate with the release of new IRS and help publishers realize merit-based value.
Audit Bureau of Circulation (ABC) measuring digital consumption will lend authority and help in monetisation, the report noted.
Digital AdEx is projected to grow at 28% and within digital, mobile is driving spends with a growth rate of 65.7% on a lower base.
The entry of Reliance Jio’s 4G service has a triggered pricing war which led to a drastic fall in data prices, thereby leading to an increase in content consumption.
With improved speed video, native and customised content has tremendous potential to grow, the report stated. Additionally, BARC’s decision to launch digital audience measurement will also help the segment’s cause.
With expanding content library, OTT viewing is no more restricted to national languages. Aggressive push by Amazon and Netflix to address the original content gap will attract larger base of audience.
With mobile increasingly being the choice of access, traffic will be higher than desktop. This will result in advertising propelled by mobile which is estimated to grow at CAGR of 48%. E-commerce, telecom, auto, BFSI and durables are large revenue contributors.
The report estimated radio AdEx to grow 13%. It will continue to grow at CAGR of 13.8% in the next five years, thanks to the addition of 150 new frequencies following Phase III auction, which is set to deepen further and will help generate incremental revenue.
The widening of radio measurement, which is limited to four cities, will help radio to increase its share of AdEx from the current 4%.
Out-of-home (OOH) is projected to grow at 12% in 2017. Technology integration will increase effectiveness and help DOOH to drive ad spends. Urbanisation in the form of new Metro lines and smart cities, modernisation of Indian Railways and their new advertising policy etc., will provide opportunities for a planned development of quality assets and also push the industry to innovate and move beyond billboards. Regional cinema is pushing boundaries to outdo Bollywood cinema which augurs well for the industry.