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Adex in India pegged at 16.2% in 2016: IPG Mediabrands India study

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Adex in India pegged at 16.2% in 2016: IPG Mediabrands India study

Adex in India is expected to grow 16.2 per cent in 2016, according to a forecast by IPG Mediabrands India. The size of the industry, is expected to touch $ 9 billion or Rs 564 billion equivalents. This half yearly report has been put together by Magna Global, the strategic global media unit of IPG Mediabrands. 

MAGNA in December 2015 had predicted the Adex to grow +18.4% in 2016 and now revises it to +16.2%. MAGNA also reports an early prediction of the India Adex in 2017, which it says will grow +15.7%. India pips Italy to get into Top 10 list this year and estimated to move up 4 ranks to become the 6th largest advertising market by 2020.

India will retain its position as the fastest growing economy with real GDP (gross domestic product) growth of +7.5% in 2016. According to International Monetary Fund (IMF), India is likely to maintain the same GDP growth in 2017 as well. Consumer inflation slightly outside of target will force the central bank to hold onto its policy rates. However the earlier reduction in rates gave the much needed impetus to automobile, housing, durables and education sectors. The farm sector, if favoured with a good monsoon, will set to rebound its output. The report estimates private consumption to mirror the growth rates and push for higher marketing spends.

This year, events like T20 World Cup, State elections, UEFA Euro 2016 will generate incremental spends. In addition, the 4G landscape destined to explode will make both service providers and handset manufacturers press the ad spend accelerator and Government investment on infrastructure and social awareness projects will hit a new high. E-commerce and automobile will continue to occupy significantly larger media space.

Shashi Sinha, CEO, IPG Mediabrands, said, “The outlook is extremely positive as globally India remains one of the fastest growing markets. Infact, India is now one of the top ten advertising markets in the world.”

Talking about the revised forecast, S Venkatesh, EVP, Director Intelligence Practice, Magna Global – India, said, “Basis our initial read of the emerging trends we had envisaged a stronger headwind across digital formats on the mobile platform while the real numbers for H1 2016 suggests a lesser significant acceleration”

Television with 42% market share will grow +17%. The biggest contributor to revenue will be the T20 World Cup, Indian Premier League (IPL) and non-cricketing leagues buttressed by E-commerce, Telecom, Auto and CPG advertising. Addressable television and expansion of the measurement into rural India equips advertisers to reach more consumers and broadcasters to monetize now counted audience. Measurement will evolve to include addressable TV audience and though connected TV currently doesn’t pose a threat to linear advertising, it will open doors for more on demand content access. Mushrooming of both domestic and international OTT (over-the-top) players will eventually fragment TV viewing time.

Print will continue to be the second biggest medium in India with 35% market share and ad sales growth of +8%. Conventionally print heavy advertisers in CPG, BFSI, Automobile and now E-commerce contributes to the segment growth.

Digital formats continue to disrupt traditional with the highest growth at +40% and increasing its share of market by 2 points to 13%. Videos will be the fastest growing format driven by consumption on mobile devices. Screen time will only increase as smartphones get bigger with better displays and faster bandwidth. Trailing this trend expect advertisers to ear mark higher promotional budgets. 

Radio through foot print expansion along with increase in volume is estimated to grow +18% in 2016. OOH will grow +15% in 2016. Both these segments will hold onto their market share of 4% and 6% respectively. 

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