GroupM, the media investment group of WPP, in its annual advertising expenditure forecast 'This Year, Next Year', has projected India's advertising expenditure to grow by 13% in 2018.
Advertising spending grew by 10% in 2017 to Rs 61,263 crore, meeting GroupM's forecast from February last year, the report revealed. A 13% increase in 2018 to Rs 69,346 crore would imply a growth that's almost double of the forecasted economic growth across industries, which is pegged at 7.3% to 7.8% for 2018.
GroupM's report on the matter predicts a recovery in consumer demand and private demand.
“As consumer sentiment stabilizes and spending increases, we estimate 2018 to be a relatively better year from an ad spend perspective. Growth in digital media will continue to outstrip other media but unlike most markets, India continues to see traditional media formats grow. After a couple of sluggish years, rural volumes are expected to pick up this year leading to increased marketing budgets. The structural changes witnessed in the last couple of years could pave the way for a more stable outlook in the coming years. We haven’t yet realized our full potential as an ad market but are headed in the right direction”, said CVL Srinivas, Country Manager, WPP India and CEO, GroupM South Asia.
GroupM estimates the Digital Adex to continue to grow by 30% in 2018 to Rs. 12,337 crores. Video advertising on digital is estimated to grow at 54%, as bandwidth improves and data and mobility device become more economical for the consumer.
The growth projections for India are also higher than in extended geographies.
“Looking at the advertising industry worldwide, GroupM estimates the global advertising expenditure to grow by 4.3%, and APAC is anticipated to grow at 5.4%. Adding to the positive sentiment of the Indian advertising economy, Lakshmi Narasimhan, Chief Growth Officer, GroupM South Asia said, “India remains one of the fastest growing ad markets globally, and is among the top five countries that are expected to drive incremental investment in 2018. Our growth percentage is three times that of the global adex (advertising expenditure) and more than double of the APAC growth percentage.”
A break-up of the growth projections for India has also been provided: