MUMBAI: The Indian advertising market is all set to witness a double digit growth rate of 11 per cent in 2015, which is the highest growth rate amongst the BRIC markets. The growth boost came from the ICC Cricket World Cup, which was held earlier in the year. Moreover, in 2016, India is poised to see a growth rate of 12 per cent, according to the Carat Ad Spend Report of September 2015.
The year 2015 looks buoyant for the Indian advertising market as optimism continues to flood the market with growth prospects remaining high in the country, propelled by the election of a pro-business government in 2014 and the revival in investment.
Of the other BRIC countries, while the advertising market in both Brazil and China is expected to see a growth rate of six per cent each in 2015, Russia will be an aberration as the economy has been affected by the sharp drop in oil prices and Western sanctions following the annexation of Crimea last year. The Russian advertising market has been severely affected with advertising revenues decreased by 16 per cent in 1H 2015. Carat predicts the total is market forecast to decrease by 14 per cent in 2015, a revision down from the decrease of 7.1 per cent previously forecast in the March 2015 report.
DIGITAL AND MOBILE FORECAST
From a regional perspective, Carat confirms on-going positive momentum in 2015 for most regions although volatility occurs in some individual markets, with Western Europe at 2.6 per cent, 4.2 per cent in North America, 4.1 per cent in Asia Pacific and 12.7 per cent in Latin America.
Despite a slight decline in growth forecasts due to China’s economic downturn, Asia Pacific remains strong in 2015 with an above global spend rate of 4.1 per cent, driven by high-performing India at 11 per cent and growing Australia at 2.4 per cent.
The report predicted continued optimism through positive global and regional outlook and solid growth in Digital and Mobile. Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, global advertising spend will grow by four per cent in 2015 to $529 billion, a slight decline from the 4.6 per cent predicted in March 2015. Moreover, in 2016 it is predicted to grow by 4.7 per cent, accounting for an additional $25 billion in spend as per Carat’s latest global advertising expenditure report.
Fuelled by the rise of Mobile and Online Video spending trends, the report reconfirms the continued solid growth for Digital media, evident through the upsurge in the predicted share of advertising spend in 2015 of 24.3 per cent and 26.5 per cent in 2016. For 10 of the markets analysed, including the UK, Ireland, Canada and Australia, Digital is now the principle media used based on spend, with the US market predicted to join this list in 2018 when digital advertising spend is forecast to overtake TV advertising by more than $4 billion.
DIGITAL
By media, Digital with 15.7 per cent growth in 2015, continues to be the only channel warranting double digital growth and is predicted slightly lower at 14.3 per cent in 2016. This is driven by the high demand for Mobile and Online Video advertising especially across social media, with 51.2 per cent and 22 per cent year-on-year growth expected this year.
TELEVISION
Programmatic buying is also experiencing rapid growth at a rate of 20 per cent each year. TV remains both dominant and resilient with a steady 42 per cent market share of global advertising spends in 2015 and is predicted to grow by more than three per cent in 2016, as the upcoming Olympic Games and US elections are expected to drive considerable viewership.
Thirty eight out of the 59 markets analysed, report TV still as their leading medium, with 17 out of these 37 markets showing that more than 50 per cent of their advertising spend is still placed on TV, including Italy, China and Brazil.
ONLINE VIDEO
Online Video is forecast to grow at a rate of 22 per cent this year and a forecast of 19 per cent in 2016, as previously predicted in the March 2015 report. With cross-device measurement tools becoming more robust, and access to premium content increasingly available, greater investments from TV budgets are being allocated into Digital, moving from a ‘channel-first’ mind set to an ‘audience-first’ focused approach. Brands are starting to understand the reach and potential of moving their investment to Online Video as the lines between linear broadcasts and digital increasingly blur. Growth in Online Video will also be fuelled by the rise of programmatic video and more efficient/scalable video production via media partners.
MOBILE
Mobile is experiencing the greatest spend growth across all media. The opportunities
to re-target consumers closer to purchase activity is a big driver. Carat forecasts growth in Mobile spend at 51.2 per cent in 2015, up from the previous prediction of 49.7 per cent in the March 2015 report and a predicted 44.5 per cent in 2016 up from the previous prediction in March 2015 of 41.9 per cent. In the US, Mobile ads targeted to both smartphones and tablets are predicted to capture up to 40 per cent of online display spend by 2019, currently accounting for 24 per cent of digital budgets.
SOCIAL MEDIA
Mobile and Online Video are also the key factors for Social Media advertising spend growth. Social Media advertising spend is rising, and moving to mobile and in-app placements. Both Twitter and Facebook report that over 70 per cent of their advertising revenue now comes from mobile, and the vast majority of this is now likely to be in-app rather than through the mobile web.
NEWSPAPERS
The age old Newspaper continue to capture the third highest share of total advertising spend, being the second most popular media type in India, and the third most popular for nine of the 13 top spending markets, including the US, Japan and UK. However, the market as a whole continues to fight against a difficult structural trend of spend shifting to digital platforms. As a result, traditional Print spend has been declining every year since 2008. Newspaper share of total advertising spend has been falling by over a percentage point each year, from 23 per cent in 2008 to a predicted 13 per cent in 2015 and 12 per cent in 2016.
MAGAZINE, CINEMA, RADIO, OOH
Despite the ongoing decline in Print spend, Carat’s forecasts confirm year-on-year growth for all other media with updated predictions for 2015 highlighting year-on-year growth in Cinema at 4.7 per cent, Radio at 1.3 per cent and Outdoor at 3.4 per cent, with the latter two slightly revised down from March 2015 figures.
Magazines are forecast to decline by two per cent in 2015 and by 1.9 per cent in 2016. Magazine share of spend is forecast at 6.9 per cent in 2015 and 6.5 per cent in 2016.
Dentsu Aegis Network CEO Jerry Buhlmann said, “Carat’s latest advertising spend forecast shows optimism balanced with realism during a year of increased volatility in major markets such as Russia and China. Noticeably, the landscape is becoming increasingly complex as previously grouped markets, such as the BRIC economies are now operating differently and economic situations can quickly change markets at pace. Our teams are well positioned to navigate our clients through this multi-faceted marketplace and successfully assimilate new market opportunities at speed.”
“Digital media continues to achieve outstanding growth as the effectiveness of this medium and results achieved, especially with the millennials, warrants the upsurge in spend levels. As digital rapidly evolves into a more established asset and programmatic and search bring stronger performance and efficiency, we continue to add value to our clients by delivering innovative solutions that are different and better,” he added.
Carat Global chief strategy officer Sanjay Nazerali said, “The media landscape is more complex and multi-faceted than ever before. The diversity of media, market volatility and the rising impact of geographical events are all influencing advertising spend. For global clients, this means a greater need to be aware of such evolving scenarios, to be agile and able to move spend where it can deliver the greatest return.”
