AdEx to increase by 15.5 per cent in 2016; FMCG to lead: GroupM

In 2016, India's advertising investment will touch Rs 57, 486 crore, predicts GroupM, in its annual AdEx futures report titled 'This Year Next Year'.

GroupM has released its bi-annual advertising expenditure futures report This Year Next Year (TYNY), forecasting India's advertising investment to reach an estimated Rs 57,486 crore in 2016. This represents a growth of 15.5 per cent for the calendar year 2016 over the corresponding period in 2015.

Categories expected to pump in money on media this year include FMCG (28 per cent), auto (8.2 per cent), e-commerce (8.1 per cent), retail (7.6 per cent) and telecom (6 per cent), in that order.

The year 2015 closed on a promising note; the advertising expenditure (AdEx) in India stood at Rs 49,758 crore, which was 14.2 per cent over the AdEx during 2014.

According to the latest report, India is the fastest growing ad market among all major markets of the world. In terms of growth in ad spends, 2015 was the best year for India, in the last five years.

Events like the T20 World Cup, IPL and state assembly elections will give a further impetus to ad spends in 2016, predicts the team. While digital will remain the fastest growing platform, India is one of the few large markets where all traditional media platforms will show positive growth.

In 2016, the FMCG segment is expected to emerge as the most dominant sector, with a 28 per cent share of the total AdEx. Despite facing "volume pressure," as the team puts it, the sector is expected to continue its investment in advertising, "aided by the softening of commodity prices."

According to the report, another big contributor to the Indian AdEx this year will be the auto sector, on the back of multiple launches across both four-wheelers and two-wheelers segments.

In 2016, e-commerce ad spends are expected to be riding high on the back of increasing competition, market expansion and newer players entering the space. Many leading traditional retailers will be expanding their e-commerce presence in 2016, even as consolidation continues in the sector. Another projection is the opening up of e-commerce as a platform for advertising.

Discussing the report, CVL Srinivas, CEO, GroupM, South Asia, says in conversation with afaqs!, "We are seeing high growth on digital versus last year; advertiser confidence is building up on mobile as a platform. TV continues to show healthy growth. Newspaper will have a better year as compared to 2015 because there are quite a few categories which would be heavily advertising in newspapers this year."

Going on to talk about televised cricketing events, Srinivas adds, "The ICC World T20 is going to be a big draw for advertisers because it's a highly popular format. Since it is happening in India, the viewing time is going to be very 'friendly', and we are seeing a lot of advertiser interest around the tournament. It is going to add to the growth of the AdEx."

According to Srinivas, IPL 9, which typically follows the World Cup, will sustain the advertiser interest it has had so far.

"Year-on-year, IPL has consistently delivered. More people have been reached through this platform. Two new teams are definitely going to build the interest this year," he says.