Advertising spends in India are expected to grow 15.5% year on year to Rs 57,485 crore in 2016, according to estimates from media buying agency GroupM. Of this, Digital Advertising spends will account for Rs 12.7% of total spends at around Rs 7,300 crore. Digital is the third highest category of advertising spends, albeit lagging far behind TV (Rs 27,074 crore, 47.1% of total) and Newspapers (Rs 17,099 crore, 29.9% of total). Of all the segments, magazines are expected to decline for a third consecutive year, down by 14.8% year on year, and to around 1% of total advertising spends.
This estimate of growth comes in the face of concerns over the state of the global economy, and a possibility of a slowdown in investment in India’s startup ecosystem: startups spent heavily on advertising last year. CVL Srinivas, CEO, GroupM South Asia said in a note that “India is the fastest growing ad market among all the major markets of the world. 2015 was the best year for ad spend growth we’ve had in the last five years.”
– FMCG (28% of spends), Auto and Ecommerce to contribute to growth in advertising in 2015
– “In 2016 Ecommerce ad spends are expected to be high on the back of increasing competition, market expansion and newer players entering the space. Many leading traditional retailers will be expanding their Ecommerce presence in 2016 even as consolidation continues in the sector.”
– Telecom, BFSI and the Government sector will also ramp up spends. “With the advent of 4G services in India, telecom service providers are expected to roll out extensive marketing campaigns across media.This roll out will also see global and domestic handset manufacturers launching new models of 4G/ LTE handsets.Another big contributor to the Indian AdEx this year will be the Auto sector, on the back of multiple launches across both 4-wheelers and 2-wheelers.”
– Digital will remain the fastest growing platform.
– Spends from Ecommerce are expected to increase, and Ecommerce companies are expected to be avenues for advertising
– Digital advertising continues to show the maximum growth with 45% in 2015, and an expected 47% growth in 2016.
– GroupM expects cross-screen campaigns to be the biggest growth drivers.
– Video on Demand is expected to grow in 2016, and spend money to acquire customers online over the next 12-14 months.
– Oddly, GroupM considers online audio platforms as opportunity for radio, saying that “Digital audio platforms are gaining in popularity, opening up a new format for radio”
– Programmatic and Native advertising are growing. Lakshi Narasimhan, Chief Growth Officer for GroupM South Asia says: “We have seen focused targeting of digital and native advertising with programmatic buying over the last 2 years, and this momentum will continue in 2016, as automation increases.”
– “Digital Advertising = Mobile Advertising. With 1 billion mobile connections and counting, mobile is now emerging as the gateway to the connected world, driving awareness, engagement and commerce for advertisers, leading to a lion’s share of the digital marketing mix.”
– “100 Million is the new lowest common denominator on mobile. Every mobile media, be it video, audio, infotainment, social has reached 100 million users across multiple publishers, giving scale to multi-screen planning.”
– “Marketers will demand higher accountability on mobile. The ecosystem will work towards developing common metrics and standards to address the needs of marketers.”
– Television is expected to grow at a marginally slower pace of 17.6% compared with 18.98% in 2015.
– Television will continue to account for a majority share of advertising spends in India, at 47.1%.
3. Print (Newspapers and Magazines)
– Even with pressures on advertising revenues, newspaper advertising is expected to grow by 6.04% in 2016. It grew by 5.2% in 2015.
– An increase in ad spends is expected from print heavy sectors like Auto, BFSI and the Government sector.
– Regional advertising of Telco and FMCG brands will benefit language dailies.
– Print magazine spending is expected to continue to decline.