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India adspend to grow across the board

News, 21 January 2016

MUMBAI: Advertising expenditure on digital will grow faster than any other channel in India in 2016, but all traditional media platforms will show also positive growth, one of the few large markets in the world where this will happen, according to a new report.

The latest This Year Next Year report from media agency GroupM predicted overall growth of 15.5% for the year ahead, up from last year's growth of 14.2%.

Sporting events like the T20 World Cup, taking place in India this year before the India Premier League starts, will boost spending, as will a number of state assembly elections, IndianTelevision.com reported.

Digital advertising expenditure is forecast to leap 47.5% to Rs 7,300 crore, helped by significant investment in cross-screen campaigns.

Lakshmi Narashimhan, GroupM South Asia chief growth officer, pointed out that digital media was now achieving audience reach numbers second only to television.

"Multi-screen planning is the order of the day," he said. "We have seen focused targeting of digital and native advertising with programmatic buying over the last two years, and this momentum will continue in 2016, as automation increases."

In terms of total expenditure, however, digital will take only a 12.7% share. Television remains the dominant medium and will account for 47.1% of spending in 2016, the report said, up from 46.3% in 2015.

Newspaper spending is expected to increase 6%, thanks to the activities of certain sectors – including auto, banking, finance and insurance and government – even as its overall share dips from 32.4% to 29.7%.

Out-of-home will grow at a similar pace (5.8%) while radio spending is slated to rise almost 10% as a number of new stations come on air following the government's sale last September of almost 100 FM frequencies in 69 cities.

Cinema is the smallest of the traditional media but it is experiencing something of a renaissance: GroupM predicted a 25% increase in adspend via this medium in 2016 as larger multiplex chains create a richer viewing experience for consumers.

In terms of sectors, FMCG will continue to be the major advertiser, accounting for 28% of all spending, followed by automotive on 8.2%.

E-commerce adspending has grown rapidly and it is now the third largest sector (8.1%), ahead of retail (7.6%). Spending in 2016 will continue to be high because of increasing competition and a fight for market share.

E-commerce platforms like Flipkart and Amazon have also become a platform for advertising, a trend that will continue in 2016.

Data sourced from IndianTelevision.com, Campaign India, Mint; additional content by Warc staff