India at number four in the top ten contributors to global adspend growth in 2017-2020

India at number four in the top ten contributors to global adspend growth in 2017-2020
Tanmay Mohanty

Advertising spending in India will grow by 8.3% in 2018 compared to 2017 to reach INR 58,422 crore, led primarily by television, according to Publicis Groupe-run media agency Zenith. The year 2017 will close with advertising spending of INR 53, 918 crore.

“Growing Internet penetration accelerated by operators such as Jio will significantly enhance digital ad spends in India and give access to previously untapped markets. India has seen some fluidity in overall ad-expenditure but remains one of the fastest growing advertising markets globally. With the dust settling down on demonetization and GST, we expect a measured recovery on ad spends. Consumer confidence is definitely on the rise. In 2018, mobile handsets, FMCG, automobiles, BFSI, travel & tourism and political ads will drive up the pace on ad spends,” says Tanmay Mohanty, group chief executive officer, Zenith India.

Traditional media platforms such as television and newspapers will continue to dominate in absolute ad spend but will lag digital when it comes to growth rate. According to Zenith, the growth rate for television is pegged at 9% for 2018 while newspapers will grow at 5%. Radio will grow at 10%, while cinema and out of home will grow at 5%, respectively. Digital advertising spending will see the most rapid growth at 20.4% in 2018 and internet will account for 15.4% of total ad spends in the country by 2020.

The report says that India will be at number four in the top ten contributors to global ad spend growth 2017-2020 after USA, China and Indonesia.

Global adspend growth at 4.1%
Zenith report predicts that global ad expenditure will grow at 4.1% to hit USD 578 billion by the end of 2018. It expects that between 2017 and 2020 global advertising expenditure to increase by USD 72 billion in total. The US will contribute 27% of this extra ad expenditure and China will contribute 20%, followed by Indonesia, India, the UK and Japan, which will contribute 4% each.

As per another report published by GroupM, global ad expenditure growth is anticipated at 3.1% this year and 4.3% in 2018, an increase of USD 23 billion next year. Six countries are expected to drive 68% of incremental investment next year: U.S., China, Argentina, Japan, India, and the U.K.

“India is looking past recent reform disruptions (demonetization and sales tax). Continuing urbanization and rising wages are supporting strong consumer growth in finance, durables, services and retail. E-commerce is becoming a key channel for FMCG, and ad investment is anticipated to shift significantly from other media to shopper/performance marketing. Amazon is now India’s second-biggest advertiser as it contests the e-commerce market with domestic rival, Flipkart,” GroupM said.

Digital investment growth is expected at 11.5% in 2017 and 11.3% next year; its share will increase from 34.1% this year to 36.4% in 2018. GroupM believes digital investment will exceed traditional TV in seventeen markets by year’s end: Australia, Canada, Denmark, mainland China, Finland, France, Hong Kong, Ireland, Hungary, Germany, The Netherlands, New Zealand, Norway, Sweden, Switzerland, Taiwan, and the U.K.

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