IPG Mediabrands India, part of Interpublic Group, has revised its forecast for advertising spends growth in India in 2016 to 16.2%, down from 18.4% it had predicted in December 2015, even though India has made it to the top 10 list in terms of advertising expenditure by value, and is expected to move up the list to become the sixth largest advertising market by 2020.
The latest forecast pegs India’s ad market size at Rs 56,381 crore ($9 billion) this year, with advertising growth at 16.2 per cent, the highest in five years. India overtakes South Korea and Italy – valued at Rs 54,502 crore ($8.5 billion) and Rs 53,861 crore ($8.4 billion), respectively – to break into the top 10 league. One dollar has been valued at Rs 64.12 by Magna Global.
The size of India’s advertising industry is expected to touch $9 billion in calendar year 2016. India was ranked twelfth in the agency’s previous forecast. “The outlook is extremely positive as globally India remains one of the fastest growing markets. In fact, India is now one of the top ten advertising markets in the world,” said Shashi Sinha, CEO, IPG Mediabrands.
The report is part of the global advertising revenue forecast which has been put together by Magna Global, IPG’s global media unit. According to the report, globally, media owner advertising revenues will grow by 5.4% in 2016 to $480 billion, an upward revision from 4.8% in the December forecast.
In India, television with 42% market share, is expected to grow 17% with T20 World Cup, Indian Premier League (IPL) and non-cricketing leagues buttressed by ecommerce, telecom, and automobile advertising as the biggest growth drivers. Print will continue to be the second biggest with 35% market share and ad sales growth of 8%.
Digital formats are expected to record the highest growth of 40% and expected to increase its market share from 11% to 13%. Radio is estimated to grow 18%, and out-of-home media (OOH) at 15% in 2016.
While India’s advertising to gross domestic product (GDP) ratio remains small at 0.36 per cent in comparison to the global average of 0.72 per cent, the long-term growth story remains intact, S Venkatesh, EVP and director, intelligence practice, Magna Global, says. “Our early prediction for 2017 is that India’s advertising growth rate will be 15.7 per cent. By 2020, India will be the sixth largest advertising market in the world, valued at $16 billion (Rs 1.02 lakh crore),” he says.