Indian ad revenue to grow by 11.3 per cent in 2014: Magna Global

As per the advertising forecast, global ad revenue is expected to grow by 6.5 per cent in 2014.

IPG Mediabrands' strategic global media unit Magna Global has released the annual advertising revenue forecast for the year 2014.

As per the research unit, while the global ad revenue is expected to grow by 6.5 per cent in 2014, the Indian ad revenue should grow by 11.3 per cent in the coming year.

On the back of new launches, auto as a category has grown in 2013. Personal Care has also grown as government social scheme and awareness programme spends have shown an increase. BFSI and telecom service providers, though recovered from 2012, are still under pressure.

The economic environment remained weak throughout 2013 but is still expected to improve in 2014, especially in the developed world which has experienced four years of slow growth and stubborn unemployment. The latest IMF update also confirmed that the Euro markets are finally emerging from recession as of the end of 2013 (1.0 per cent GDP growth expected in 2014, 1.4 per cent growth in Germany). The US will accelerate from 1.6 per cent to 2.6 per cent growth.

Meanwhile, the emerging BRIC economies will also re-accelerate after experiencing a "soft landing" in 2012-2013: India 5.1 per cent (following 3.8 per cent in 2013), Russia 3.0 per cent (following 1.5 per cent in 2013); Brazil and China's are expected to grow by 2.5 per cent and 7.3 per cent, respectively (at par with 2013).

"That level of economic activity is not particularly impressive by historical standards but confidence indices keep improving and we believe advertising spending will reflect and amplify that economic trend," says Venkatesh S, EVP, director intelligence, Magna Global, India.

According to Magna, it has to be noticed that the growth indicators mentioned are for real GDP, whereas in their experience, advertising expenditure is better correlated with nominal GDP. Over the 72 markets monitored by Magna Global, nominal GDP growth was 4.9 per cent in 2013 and will be 6.1 per cent in 2014. "Our advertising growth forecast is therefore marginally above nominal GDP growth, which can be expected in an even year with cyclical boosters and coming after several years of savings and postponed investment," the report said.