LONDON: Media investment in India is on an explosive growth curve, set to exceed $5 billion (€3.45bn; £2.4bn) next year and possibly $10bn by 2011, forecasts a new study from WPP's media investment management unit GroupM.

Titled This Year, Next Year: India, the report includes an examination of all major media in India, including internet, outdoor, and cinema. It concludes that overall media investment is growing at an annual compound average of 21%.

Says GroupM'S London-based futures director Adam Smith, who oversees all TYNY reports: "Only China and Russia combine such scale with such growth.

"India is currently contributing between 3%-4% to annual global media investment growth, which compares to Japan, Canada and the largest European countries."

The boom is sparked in part by the evolving sophistication and increased spending power of the Indian consumer, leading in turn to increased lifestyle-led advertising in categories such as financial services, automotive, fashion, and high-end household goods.

Another key factor is that wages among the nation's urban dwellers are rising in parallel with the Indian economy, which currently boasts the lowest real interest rates in the developing world.

Among specific media, TYNY: India notes that:

  • Internet users have grown tenfold to 21 million since 2000. Online brand display advertising and transaction generation are the mainstay of internet ad revenues. Search is increasingly used by direct-response advertisers and total online ad revenue will shortly overtake magazines and radio.

  • Unique among the world's large emerging markets, newspapers dominate advertising. This is sustained by more colour, targeted supplements and ever-wider distribution.

  • TV growth is sparked by the launch of new channels and the growth of new ad categories. The majority of TV commercials continue to be for household consumer goods, but India's rising affluence - along with the telecoms revolution - is reflected in increasing spend contributions by telecoms providers, automotive and financial services; with retail now making a promising entry.

  • While terrestrial TV continues to lose share and cable TV grows, satellite TV is spreading fast in two directions. It already enlarges choice in 3m subscriber homes, and now delivers free TV to an estimated four million homes in hitherto 'media dark' provinces.

  • Radio is often the only channel where electricity and literacy are scarce. It is set to outperform other platforms as the government releases more bandwidth, consumer appetite for music-based content rises, more people drive, and audience measurement begins. Virtually all mobile phones now receive FM radio.
For further information on the report click here.

Data sourced from multiple origins; additional content by WARC staff