The This Year Next Year (TYNY) report projects 30% growth for Digital Adex, with video advertising expected to see an impressive 54% growth, while Print and traditional media will benefit in the latter half of the year from the Parliamentary elections in H1 2019
BY TEAM IMPACT
GroupM, the media investment group of WPP, has forecast India’s advertising investment this year to be an estimated Rs 69,346 crore in its report titled ‘This Year, Next Year’ (TYNY) 2018. The report projects a growth of 13% for the calendar year 2018. Various industry estimates peg economic growth at 7.3% to 7.8% for 2018 as the benefits of GST- higher productivity and lower cost of goods sold- become apparent. This, combined with key reforms already implemented, such as bank recapitalization, budget provisioning of non-performing assets and the Bankruptcy Bill approved by law, are likely to facilitate a recovery in consumer demand and private investment.
Speaking on the TYNY 2018 report, CVL Srinivas, Country Manager, WPP India and CEO, GroupM South Asia, said, “As consumer sentiment stabilizes 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 realized our full potential as an ad market but are headed in the right direction.”
Some take-aways:
1. Growing urbanization and increase in wages are key factors driving consumer growth in finance
2. E-commerce is becoming a key channel for FMCG, and ad investment is expected to drive growth in shopper and performance marketing. India is already seeing an increase in spends from rural markets as sales have grown between 1.5 to 2.5 times the urban sales growth for major FMCG and consumer durable companies.
3. Continuing urbanization 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.
Looking at the advertising industry worldwide, GroupM estimates the global advertising expenditure to grow by 4.3%, and APAC is anticipated to grow at 5.4%, adding to the positive sentiment of the Indian advertising economy. Lakshmi Narasimhan, Chief Growth Officer, GroupM South Asia, said, “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.”
GroupM estimates the Digital Adex to continue to grow by 30% in 2018 to reach a size of Rs 12,337 crore. Video advertising on digital is estimated to grow at 54%, as bandwidth improves and data and mobility device become more economical for the consumer. As Digital becomes 18% of the overall advertising spends in India, measurement and transparency become paramount. On the traditional media front, parliamentary elections in H1 2019 will stimulate advertising from the latter 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 slightly slower than Hindi and regional languages.
Television continues to be the largest medium, with its contribution remaining at close to 45% share. This year, the growth rate for TV is 13%, and the last leg of cable digitization will improve quality of delivery to rural India, also driving viewership.
Radio is expected to see a growth of 15%, higher than the past couple of years, and this is largely due to the launch of the 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.
GroupM 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.
