Amid note ban and GST, ad spend seen growing in double digits

Magna sees 11.5%, Dentsu 13% jump for 2017; sector to touch Rs 61,000 cr this yr

Disruptions such as demonetisation last year and the goods and services tax (GST) roll-out are hardly going to affect advertisement budgets in the country, according to two mid-year forecasts of media agencies on Thursday.

Magna, part of IPG Mediabrands, and Dentsu Aegis Network have forecast advertising expenditure (adex) growth rate in the country for the year at 11.5 per cent and 13 per cent, respectively, lower than the two agencies’ previous estimates. Magna had forecast adex growth rate of 13.5 per cent for 2017, in December 2016, and Dentsu 13.9 per cent in September last year. These forecasts did not capture the impact of demonetisation, the agencies said. 

“Despite challenges, India’s adex this year will continue to grow in double digits and will push the country on to the list of world’s top-10 ad markets,” Venkatesh S, executive vice-president and director, intelligence practice, Magna Global, said.

For the calendar year 2016, India’s adex growth, according to Magna, was 11.8 per cent, with overall market size pegged at Rs 54,864 crore. In 2017, India’s ad market, said Magna, will touch Rs 61,100 crore.

Kartik Iyer, managing director, Carat India, part of the Dentsu Aegis Group, endorses the point about India’s robust adex growth, saying contributors include categories such as digital. 

“Overall adex growth (for 2017) is led by segments such as digital, whose growth rate is over 35 per cent, far in excess of other traditional media. While TV and cinema are expected to grow at around 12 per cent each, radio and out-of-home should see a growth of 10 per cent each and newspapers around eight per cent (this year),” he said. 

India, he notes, continues to be among the few countries in the world seeing double-digit adex growth, which is expected to continue. Dentsu Aegis Network has forecast India’s 2018 adex growth at 12.2 per cent.

Magna, on the other hand, has gone a step ahead, saying that India’s adex growth on a compound annual basis over the next five years will be 12.6 per cent, led by digital, which will grow at 25.5 per cent per annum. Offline, that is, print, television, radio and out-of-home, put together, will grow at a compound annual rate of 9.7 per cent over the next five years, the agency says. 

At the global level, adex growth will slow to levels of about 3.8 per cent in 2017 versus 4.8 per cent seen last year, according to Dentsu Aegis Network. In 2018, global advertising could pick up steam, it says, growing at the rate of 4.3 per cent per year.