Indian adspend up in 2014

11 February 2014
MUMBAI: Advertising expenditure in India is forecast to rise by 11.6% during 2014, with spending on digital media growing between three and four times as fast as that on TV and print, a new report has said.

Media investment business GroupM made the prediction in the latest edition of its annual report This Year, Next Year. Digital media were projected to increase 35%, with TV slowing to 12% from last year's 14.6% and print picking up to 8.5% from 4.6% in 2013.

The report highlighted several factors behind the improvement, the Business Standard reported, including a good monsoon and higher rural incomes and increased spending in an election year.

"We are cautiously optimistic about the media industry in 2014," said CVL Srinivas, GroupM South Asia. He expected some uncertainty in the first half of the year because of the economic and political environment but added that advertising by political parties ahead of state and general elections would boost adspend by as much as 2.5%.

A stronger second half would drive increased spend in other areas. "Sectors like FMCG, auto and retail will continue a stable increase in ad spends," he said, "and we will see an increase in rural spending by FMCG and telecoms."

The report noted that retail's growth would be helped by the entry of more businesses into the food and beverage sector, regional players stepping up to the national stage and ecommerce reaching into smaller towns.

While the automobile sector had seen a slowdown in passenger cars, GroupM said that the focus by two-wheelers on small towns and rural areas would likely lead to more launches by existing players and so more ad spending.

In the competitive telecoms market, meanwhile, increasing penetration of smartphones and phablets, along with falling prices for 3G packages, were the forces driving growing advertising expenditure.

The financial sector, however, was basing its optimism on changes to macro-economic policy, as it anticipated interest rate reductions and absorbed recent moves by the Reserve Bank of India to create more favourable business conditions.

Data sourced from Business Standard; additional content by Warc staff
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