The predictions for next year by a leading forecaster of advertising spending will have the India’s ad fraternity smiling.
According to the report, India, among other emerging economies such as China, will lead the charge in terms of advertising growth over the next few years.
Magna Global, an IPG group company responsible for forecasts and insights, said in a study released on Wednesday that India will see a compounded annual growth rate (CAGR) of 16 per cent in advertising revenues from 2010 to 2015 -- just 200 basis points lower than China, which is projected to grow at 18 per cent in the same period.
India's advertising industry, for the record, is small -- just about 1.1 per cent, or Rs 18.500 crore of the international advertising industry, which stands at $358 billion or Rs 16,71,878 crore (one dollar = Rs 46.7005). China's industry is larger at about 14 per cent, or Rs 2,34,000 crore of the global advertising industry.
Even then, the growth projections made by Magna for India are heartening given the fact that developed economies such as the US, UK, Japan and Germany, whose share in the global advertising industry is large, is likely to see single-digit growth in the range of 1to 4 per cent in the same period.
"India is not large by global advertising standards, but the country does show enormous growth potential, “says Premjit Sodhi, chief planning officer, Lintas Media Group, an IPG group company in India.
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India's growth potential can be gauged from this: When much of the advertising industry in the world was reeling under recession through the latter half of 2008 and 2009, India's advertising industry was actually growing. For the calendar year 2008, the advertising industry in the country grew by 6.8 per cent. This year, says the Magna report, the cumulative growth will be 10.4 per cent. And next year, it is estimated to be 14.8 per cent.
Television, says the Magna Report, will continue to be the driver in terms of ad spends in the country. This year, says the report, TV's growth will be 41.7 per cent in terms of share of ad spends. Newspapers will be a close second at 40.3 per cent. Next year too, the scenario is not likely to change drastically for TV, at least, though print is likely to see a marginal drop in terms of ad spends. According to the Magna report, TV is likely to register a growth of 41.7 per cent in terms of share of ad spends while print, that is, newspapers' share of spends will come down by 50 basis points touching 39.8 per cent.
Share of ad spends of new media, digital, internet etc will continue to be small in the overall advertising pie of the country, but what is worth noting is that advertiser interest in these segments is growing steadily, says Sodhi. "If you look at the rate at which advertising on these media is growing then you will note that it is going up," he says. The Magna report shows that the annual growth of search-engine-based advertising, for instance, went up by 33.3 per cent in 2008 in India. It is slated to touch 43.3 per cent at the end of this year and 40 per cent in 2010.
Radio, says the report, is another medium to watch out for. Though 2008 saw good growth at 37.1 per cent for the medium. It will continue to tag along at 22.8 per cent at the end of this year and 20 per cent next year.
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