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India set to be 15th largest advertising market by 2009: GroupM forecast

17-September-2008
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India set to be 15th largest advertising market by 2009: GroupM forecast

GroupM has just released its annual media forecast, ‘This Year, Next Year: India Media Forecasts’, as part of its annual media and marketing forecasting series. Data for this study is drawn from holding company WPP’s worldwide resources in advertising, public relations, market research, and specialist communications. It includes forecasts for advertising spending in all major media.

“India is clearly set to deliver sustained long-term advertising growth,” said London-based GroupM Futures Director Adam Smith, who oversees all ‘This Year, Next Year’ reports. “It is also one of the world’s most under-advertised countries since measured advertising investment accounts for only one-half per cent of the GDP, compared to a global norm of around 1 per cent,” he added.

The study predicts that advertising expenditures in all media throughout India would increase 20 per cent in 2008 to $5.6 billion and 19 per cent in 2009 to $6.6 billion. The projected hikes follow a 20 per cent increase in 2007. With this, India is set to be the 15th largest advertising market by 2009, rising to that spot from the 26th place in 2000. Globally, measured advertising investment has grown by almost 50 per cent since that time, rising to a projected $496 billion in 2008, compared to $333 billion in 2000. In the same time period, ad expenditures in India have nearly quadrupled, from $1.5 billion to this year’s projected $5.6 billion.

GroupM expects global ad investment to rise 5.8 per cent in 2008 (to $496 billion) and 4.5 per cent in 2009 (to $518 billion). With slow-to-no growth in the developed world, India will be contributing one in 20 of all new ad dollars expected in 2009, making it the third largest developing ad economy in the world behind China (one dollar in three) and Russia (one dollar in 10).

The study noted that most of the growth has been driven by spending in traditional media since Internet ad spending has been comparatively slow. India’s Internet penetration was relatively low at 46 million monthly users at the end of 2007, or 4 per cent of the population. In 2008, GroupM expects Internet ad spending to account for only 2.6 per cent of India’s measured advertising investment. However, Smith said that India’s Internet use would accelerate as the quality, quantity, and search capabilities of local content improved. He added that rising Internet use in rural areas already accounted for 20 per cent of total usage, representing good progress.

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