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Digital fastest growing medium in India registering a 30% growth rate : Zenith Adex report

07-December-2016
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Digital fastest growing medium in India registering a 30% growth rate : Zenith Adex report

Publicis Media Company Zenith has just released its new Advertising Expenditure Forecasts in which it predicts that global ad expenditure will grow 4.4% in both 2016 and 2017, reaching US$566 billion by the end of 2017. The 2017 forecast is down by 0.1 percentage point from the forecasts published in September after small downgrades in Asia Pacific, which nevertheless remains one of the fastest growing regions for ad expenditure.

This is a strong performance, given that the unexpected results of the UK’s referendum on EU membership and the US presidential election have increased political uncertainty and raised the risks of restrictions to international trade. 2017 also faces a tough comparison with the quadrennial year of 2016, when spend was buoyed by the US elections, the Summer Olympics, and the European football championships, as it is every four years.

After 2017 continued steady growth in global ad spend is expected, of another 4.4% growth in 2018 and 4.1% in 2019. Global ad spend growth has been remarkably stable since 2010, growing at between 4% and 5% a year, generally at or below the growth rate of global GDP. Before the financial crisis, advertising would typically exaggerate the wider economy, growing faster in times of expansion and shrinking faster during recessions, with frequent changes in year-on-year growth rates. More recently the global ad market appears to have entered a phase of more stable growth.

Growth of adex (2016-19):

Television is currently the dominant advertising medium; attracting 36% of total global spends in 2016. However, the internet is expected to overtake television to become the largest medium in 2017.

As per the report, Global advertising expenditure in social media will grow 72% between 2016 and 2019, rising from US$29bn to US$50bn, according to Zenith’s new Advertising Expenditure Forecasts, published today. Social media advertising will account for 20% of all internet advertising in 2019, up from 16% in 2016.Social media advertising is growing at 20% a year and by 2019 will be just 1% smaller than newspaper advertising (US$50.2bn for social media compared to US$50.7bn for newspapers). By 2020 social media will be comfortably ahead.

India amidst fast-track Asia:

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. Fast-track Asia barely noticed the 2009 downturn (ad expenditure grew by 7.9% that year) and since then has grown very strongly, ending 2015 up an estimated 9.6%.

Zenith predicts that ad expenditure growth for India in 2017 stands at Rs.54, 344 crore, up by 11.2% over 2016. India is among the top ten contributors to ad spend growth, along with others such as  USA, China, Indonesia, UK, Philippines, Japan, Germany.  

Tanmay Mohanty, Group CEO, Zenith India says, “India remains one of the few bright spot economies in the world. Ad spending in India is on a steady growth curve and likely to stay that way in 2017, buoyed by the state elections in Uttar Pradesh and Punjab, the upcoming Champions Trophy and continued expansion and growth of regional newspapers and television. In November, the central government introduced reform in the form of Demonetisation which is leading to some contraction in ad spends. We expect the demand for goods and services to pick up and this shortfall to be temporary. Demonetisation is expected to augur well for the economy long-term. In fact, we expect 2017 to see increased ad spending by categories such as Mobile Wallets, Telecom 4G, BFSI, Mobile Handsets, Fast Moving Consumer Goods and Consumer Durables.”

Growth of adex by regions:

Digital remains one of the fastest growing mediums in India registering a 30% growth rate. Television will register an 11% growth rate in 2017, print (newspapers) will grow at 7.6% and all other media between 7%-12%.

The reports also states that the US will the leading contributor of new ad dollars to the global marketover the next three years, making up in scale what it lacks in speed. China will come second, combining large scale and rapid growth. Between 2016 and 2019 we forecast global advertising expenditure to increase by US$73 billion in total. The US will contribute 28% of this extra ad expenditure and China will contribute 25%, followed by Indonesia, the UK, and India and the Philippines, which will each contribute 4%.

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