MUMBAI: Advertising expenditure in India is expected to grow 13.5% to Rs 56,152 crores in 2017, although growth is not expected to really take off until after April, a new industry report has predicted.
According to the latest Pitch Madison Advertising Report, the market is forecast to grow by just 8% from January to April before recording more impressive increases later in the year.
That is partly because the Indian media and advertising industry was hit by a "tsunami" of demonitisation last year, which slowed growth to 12.5% in 2016, in line with Warc's India Ad Forecast, and hit advertising expenditure in November and December to the tune of Rs. 1,650 crores.
Growth was therefore much lower at the end of last year than previously anticipated and the report noted that TV advertising declined in November and December by 21% compared to last year and lost approximately Rs 850 crores. Demonetisation also hit print advertising hard, which lost Rs 580 crores.
However, last year's overall growth of 12.5% came on the back of digital advertising, which grew by 42.9% to Rs 7,315 crores, taking 15% of the market. Digital adspend is expected to grow a further 25% in 2017 to reach Rs. 9,144 crores.
Although TV and print suffered at the end of last year, both media are expected to recover in 2017 with growth rates of 13.1% and 9.5% respectively.
Madison expects TV advertising to reach Rs 21,296 crores and have 38% market share in 2017, while print is forecast to take 35% market share with a value of Rs 19,869 crores.
Meanwhile, radio advertising is expected to grow by 14.8% to reach Rs 2,008 crores, cinema by 15% to Rs 601 crores, and outdoor by 11.1% to Rs 3,234 crores.
"Our expectation is that the market will grow 13.5% in 2017, but growth rates will vary widely from month to month," said Sam Balsara, Chairman of Madison World.
"We expect the market to grow by just 8% for the period January to April 2017, 14% from May to October 2017 and 24% in November and December 2017, given that market had de-grown by 8% in November and December 2016," he continued.
"Our optimism for good growth in Adex starting May comes on the back of several government initiatives – from high government investment in infrastructure, lower corporate and personal taxes for small and medium companies and the masses, good government support for the poor, and consequently the wide scale expectation of yet another year of high GDP growth."
Data sourced from Pitch Madison Advertising Report; additional content by Warc staff