PMAR 2018: Ad market to grow at 12%; optimistic about 2018: Sam Balsara
The advertising market slowed down to 7.4 per cent (Rs 53,138 crore) in 2017 on the back of structural reforms by the government
The 16th Pitch Madison Advertising Report 2018, released this evening, found that the growth of the advertising market slowed down to 7.4 per cent (Rs 53,138 crore) in 2017 and predicts the growth in 2018 to be around 12.03 per cent thereby adding Rs 6,392 crore to Adex to reach a total size of Rs 59,530 crore .
In 2017, PMAR had predicted the growth for 2017 to be around 13.5 per cent, however, the industry could not keep up its pace because of structural reforms put in place by the government.
"We are optimistic about 2018 because you can't keep the the Indian economy down for too long," said Sam Balsara as he presented the Pitch Madison Advertising Report 2018.
He added that the forecast is tempered by the possibility of the government's reforms that may destabilise the economy in the short term. Therefore, Balsara said that the ad world needs to keep its "fingers crossed" in 2018.
Following the demonetisation phase, 2017 had a bad start. “Adex was slow to recover from the impact of demonetisation and the first quarter of 2017 saw a de-growth of -2% and growth of a mere 2% in the second quarter on the back of IPL. Just when we expected Adex to gather steam, the Goods and Services Tax (GST) Bill came into effect in July and the market saw a drop of close to 20% in traditional media over June 2017, and a drop of 5% as compared to July 2016,” the report notes. “Mercifully, the festive period brought cheer to Adex, and it grew from August, 2017 to December, 2017 by 13%.”
The usual suspects Hindustan Unilever Ltd, Amazon Online India, Procter & Gamble, and Reckitt Benckiser topped the list once again. The newest and not surprising entrant in the top five this year is the disruptor brand : Patanjali Ayurved Ltd that has climbed the list from No 15 to No 5 . Patanjali Ayurved is predicted to have nearly doubled its ad spend from Rs 300-400 cr to Rs 500-600 cr per annum.
Traditional media worst hit
In 2017, traditional media grew by only 4% - the lowest in half a decade. Television, which continues to be the largest contributor to Adex with 37% share, grew by just 4.3% and reached Rs 19,650 cr; this is the lowest growth television has witnessed in the last five years. TV that is closely followed by Print at 35% share, had even lower growth of just 2.7% to reach Rs 18,640 cr.
In 2018, television adex is expected to grow 13% to reach Rs 22,205 cr while print adex is expected to grow by 5% in 2018, taking the Print market close to Rs 20,000 crore.
Digital Leads the Way
“It is thanks to Digital Media, which continued its onward march and grew by 27.2% in 2017, that we are able to report an overall Adex growth of 7.4%,” the report observed. Digital added nearly Rs 2,000 crore to adex, to reach a size of Rs 9,303 crore in 2017. It now contributes a whopping 17.5% to Indian Adex, with video gaining huge ground, along with Search, Display, Native and Programmatic advertising.
Digital advertising is projected to grow by about 25% to cross the Rs 10,000 crore mark and grow to Rs 11,629 crore in 2018. Digital is expected to continue its growth trajectory and growth at a rate of 25%, taking the Digital adex up to Rs 11,629 crore in 2018. FMCG, Telecom, BFSI and Real Estate will continue to be growth drivers for Digital while e-commerce will remain the backbone of digital adex.
2018 Looks Promising
Emerging from one of the darkest years for advertising so far, the industry is keeping its fingers crossed for 2018. There are some key factors that will drive growth in 2018, the report observes. There are signs of return of consumer spending and benefits of GST will start accruing this year boosting growth. Media, in particular print, will also get a fillip from the eight State Assembly elections scheduled during the year.
The industry can also look forward to Increased publicity by the Central Government on account of ensuing Lok Sabha elections in 2019. Increased activity in BFSI area, 16 new launches by automobile companies, Increased activity in the sporting arena from both cricketing and non-cricketing leagues and FIFA World Cup Strong come-back by FMCG companies on the back of increased Rural demand, launch of new ayurvedic lines by FMCG companies will also help increase ad spends in 2018.
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