By A Correspondent
Leading media agency network ZenithOptimedia says its growth forecast for advertising expenditure in India will be 13 percent for 2016. Â Television largely fuels this at 15% and print – newspapers – at 10%. Digital is expected to grow upwards of 20% while all other media are expected to grow at 5-10%. E-commerce, telecom, mobile phones expected to have the maximum growth followed by automobiles and FMCGs.”
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‘13% growth in adspends is a positive movement’
Anupriya Acharya, Group CEO, ZenithOptimedia India on her agency network’s global spends forecast as she tells Pradyuman Maheshwari that the actual growth for 2015 will be at 13% as against 12% forecast last year, primarily driven by higher than expected growth on TV at 15%.
You speak about rational optimism for the year ahead. But given your overall forecast for adspends as 13%, will you say that “achche din aanewaale hain” or would it be that “they could well have been ‘kharaab’, so be happy with this one”?
The rational optimism is to contrast it with the irrational exuberance that was there last year this time given the new government. But to answer your question… I would say at 13% it’s a positive movement and if we have sustained momentum, it should go up further in the coming years.
But even as forecast reports such as yours paint a rosy picture, friends in various media sales jobs rue that sales aren’t happening in right earnest…
That’s right… at an informal level one can get different reports depending on who one is talking to. For example, most sellers will tell buyers that the market is booming and most buyers will tell sellers that it’s a tough market! :))
Our report however is based on closely tracked data, including inventory sold, impact properties hitting media, annual reports of media companies, secondary research on economic parameters and key categories, actual movement on pricing coupled with market intelligence on key deals.
Real estate for instance has taken a severe beating…
That’s right… but actually sometimes that’s when it’s really advertised!
Your forecast for 2015 was a 12% growth. How has it been in 2015 looking at actual spends. And what about specific sectors… the forecast % v/s actual?
By the time we close 2015, it looks that the actual growth will be at 13%, primarily driven by higher than expected growth on TV at 15%.
You’ve mentioned automobiles to see have a good growth, but we have seen modest rise there with very new brands too cutting price?
Yes, as a category, AdEx on automobiles are quite volatile, say compared to FMCGs which are fairly stable in terms of growth/ degrowth. But this year we have seen a healthy 25% plus growth in automobile spends. New brands cutting price also need to advertise it!
“In 2018 we expect the internet to overtake television to become the largest single advertising medium,” the report says. Would this apply to India too? And if not, by when do you think will the internet overtake television?
It does not apply to India at this point in time. But if quite a few things kick in well and collectively like 4G, broadband highways, consumer’s earning and spending potential – and this coupled with the marketer-advertising fraternity accelerating their understanding of this space then it is not impossible to expect it in the next 7-8 years. I must also point out that interestingly, this is not because of slow growth of internet but because in India TV is also growing and far from saturation point!
Lastly, given that we are the world’s largest democracy, second-most populous country… with a smart and creative advertising fraternity and have very active marketers, isn’t a matter of shame that we are sooooo far behind China?
Well, China’s GDP is five times of India and their currency ten times stronger! We need to accelerate growth on all fronts in our country and media, marketing and advertising are a subset of it. Collectively, we can and we will 🙂
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ZenithOptimedia predicts global ad expenditure will grow 4.7% in 2016, reaching US$579 billion by the end of the year. This will be a 0.8 percentage point improvement on 2015: 2016 being a ‘quadrennial’ year, when ad expenditure is boosted by the Summer Olympics, the US presidential election and the UEFA football championship in Europe. “The global ad market has enjoyed stable growth since 2011, with growth rates ranging between 4% and 5% a year, and we expect it to maintain this pace for the rest of the forecast period,†the report adds
Interestingly, while television is currently the dominant advertising medium with a 38% share of total adspend (in 2015), in 2018, ZenithOptimedia expects the internet to overtake television to become the largest single advertising medium. According to the report, one of the reasons for television’s loss of share is the rapid growth of paid search, which is essentially a direct response channel (together with classified), while television is the pre-eminent brand awareness channel – and we expect it to remain so for many years to come.
Audiovisual advertising as a whole – television plus online video – is gaining its share of display advertising. Television offers unparalleled capacity to build reach, while online video offers pinpoint targeting and personalisation of marketing messages. Both are powerful tools for establishing brand awareness and associations. Audiovisual advertising will account for a record 48.4% of display advertising in 2015, up from 44.1% in 2010, and its share can be expected to reach 48.9% in 2018.
Also, in 2018 mobile advertising will overtake desktop and account for 50.2% of all internet advertising. Programmatic advertising will account for more than half of digital display advertising (53%) for the first time this year, and will increase its share to 60% in 2016. “We expect programmatic advertising to grow another 34% in 2016 and 26% in 2017, at which point two thirds of global display will be programmatic,†the report adds.
At regional  levels, Fast-track Asia economies (China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam) are growing extremely rapidly as they adopt western technology and practices, while benefiting from the rapid inflow of funds from investors hoping to tap into this growth. China accounts for 74% of adspend in Fast-track Asia, so its slowdown naturally has a large effect on the region as a whole. The expectation is for ad expenditure in Fast-track Asia to grow 8.9% in 2015, and at an average rate of 8.4% a year between 2015 and 2018, down from 14.7% a year between 2009 and 2014.
Adspend growth is slowing down in three out of the four BRIC markets that were responsible for much of last decade’s ad market expansion. India – the only BRIC market – continues to combine rapid growth and large scale, making it a distinct hot-spot of adspend growth. The market is benefiting from sustained, healthy economic growth and strengthening personal consumption. With adspends growing at double-digit annual rates here, ZenithOptimedia expects the market to expand by US$3 bn between 2015 and 2018.
