The annual Pitch madison Media Advertising Outlook (PMAO) for 2016 predicts that Advertising industry will grow 16.8 per cent to reach Rs 51,365 crore. This is a growth of Rs 7,300 crore over last year. In 2015, the industry grew by 17.6 per cent, exceeding mid-year projections of 13.8 per cent.
In 2016, PMAO forecasts that print will grow by 10 per cent to reach Rs 18,629 crore, TV will grow by 20 per cent to reach Rs 20,713 crore, digital will grow by 30 per cent to reach Rs 6,656 crore, radio will grow by 18 per cent to reach Rs 1,823 crore, OOH by 12.9 per cent to reach Rs 3,010 crore and cinema advertising will grow by 15 per cent to reach Rs 535 crore.
The authors of the report have noted that it took five years (2008 to 2013) for the industry to add Rs 10,586 crore, moving up from Rs 21,520 crore to Rs 32,106 crore, but only two years (2013-15) to add Rs 11,885 crore to reach Rs 43,991 crore.
The categories that have contributed most to the overall growth in 2015 are FMCG, e-commerce, Auto and Telecom/DTH. FMCG continues to be the most dominant sector with a 28 per cent share of the total Indian advertising industry pie followed by e-commerce (10 per cent) and then Auto (9 per cent). FMCG contributed Rs 2,050 crore to the overall growth while e-commerce contributed Rs 793 crore.
Prognosis For 2016
The PMAO report expects 2016 to be another high growth year, buyoyed by positive industry sentiment and a strong GDP growth of 7 per cent and above. India will also retain the distinction of being the fastest growing advertising market in the world for the second consecutive year, said the report.
On the supply side, a big contributor of this growth will be the ICC Cricket T20 World Cup and the busy schedule of Indian cricket for the next six months. TV will continue as the largest contributor to the overall advertising pie with a share of 40 per cent, gaining a further 1 percentage point. Share of digital spends will increase to a respectable 13 per cent of the overall advertising pie.
After four years, television reclaims top position from print to garner the largest chunk of the advertiser’s spends at Rs 17,261 crore (a 22 per cent growth), with FMCG being the biggest spender on the medium. Television will continue to remain brands’ all-time favourite medium in 2016 and grow by another 20 per cent on the back of FMCG, Telecom, mobile hand-sets, e-commerce and auto players.
Print beat PMAO estimates and grew substantially by 11 per cent to reach Rs 16,935 crore in 2015. However, advertisers lost their appetite for magazines, which saw negative growth. In 2016, dailies will continue to lead the expected 10 per cent growth, with language publications at the frontier; new editions by regional publishers expected to attract new advertisers.
The PMAO'16 report expects digital to continue its strong growth into 2016. The medium showed 29 per cent growth in 2015 on the back of demand for video, social and mobile. In 2016, digital is expected to grow by 30 per cent and advertisers are also expected to use the medium to build reach and awareness.
Search spends are likely to stabilize and desktop display would see a further downward trend in terms of share of pie. Programmatic buying has seen some traction in 2015; this is likely to get further strengthened in 2016.
With the first stage of the Phase III auctions finally over, the medium is expected to receive a filip with new stations coming into operations. The industry grew at 20 per cent in 2015 to become a Rs 1,545 crore market but maintains its share in the total ad pie at 3.5 per cent. E-commerce and auto sector emerged as major contributors in 2015. Radio has grown by 20% in 2015. This year, PMAO forecasts the radio sector to grow at 18 per cent to reach a total size of around Rs 1,800 crore.
THE PMAO report forecasts outdoor advertising market to cross Rs 3,000 crore at a growth rate of 13 per cent. Hidhger adoption of digital and technology and greater use of transit media are expected to be the main factors behind the growth of this sector this year. A rate of 13 per cent would be a little disappointing for a sector which grew at 14 per cent in 2015.
Cinema to grow by 15 per cent in 2016 taking the total cinema advertising revenue to Rs 535 crore. Digitization of single screens, presence of multiplex screens in Tier II and Tier III towns and increasing popularity of Hollywood and regional films in India are expected to fuel the growth of cinema advertising.
In 2015, this category grew by 21 per cent and accounted for 1 per cent of the total advertising pie.