AdEx to grow by 16.2 per cent in 2016: IPG Mediabrands India forecast

India to become sixth largest advertising market by 2020 as per report.

IPG Mediabrands India, a media agency, which is part of the US-listed Interpublic Group, reports a 16.2 per cent growth of the AdEx in 2016. The size of the industry is expected to touch USD nine billion, or the equivalent of INR 564 billion. This half-yearly report is put together by Magna Global, the strategic global media unit of IPG Mediabrands.

Magna Global, in December 2015, had predicted the AdEx to grow by 18.4 per cent in 2016, but has now revised it to 16.2 per cent. Magna also reports an early prediction of the India AdEx in 2017, which it says, will grow by 15.7 per cent. India pips Italy to get into the Top 10 list this year and is estimated to move up four ranks to become the sixth largest advertising market by 2020.

This year, events like the T20 World Cup, State Elections, and the UEFA Euro 2016 will generate incremental spends. In addition, the 4G landscape destined to explode will make both service providers and handset manufacturers press the ad spend accelerator and government investment on infrastructure and social awareness projects will hit a new high. E-commerce and automobiles will continue to occupy a significantly larger media space.

Shashi Sinha, chief executive officer, IPG Mediabrands, says in a press release, "The outlook is extremely positive as globally, India remains one of the fastest-growing markets. In fact, India is now one of the top 10 advertising markets in the world."

Talking about the revised forecast, S Venkatesh, executive vice-president, director intelligence practice, Magna Global - India, says in a press release, "Based on our initial read of the emerging trends we had envisaged a stronger headwind across digital formats on the mobile platform while the real numbers for H1 2016 suggest a lesser significant acceleration."

A look at sector-wise data

Television, with a 42 per cent market share, will grow by 17 per cent. The biggest contributor to revenue will be the T20 World Cup, the Indian Premier League (IPL) and non-cricketing leagues buttressed by e-commerce, telecom, auto, and consumer packaged goods advertising. Addressable television and expansion of the measurement into rural India equips advertisers to reach more consumers and broadcasters to monetise the now counted audience.

Print will continue to be the second biggest medium in India, with a 35 per cent market share, and an ad sales growth of eight per cent.

Digital formats continue to disrupt traditional, with the highest growth at 40 per cent and increasing its share of market by two points to 13 per cent. Videos will be the fastest-growing format driven by consumption on mobile devices. Screen time will only increase as smartphones get bigger with better displays and faster bandwidth. Trailing this trend, advertisers are expected to earmark higher promotional budgets.

Radio, through footprint expansion, along with increase in volume, is estimated to grow by 18 per cent in 2016. OOH will grow by 15 per cent in 2016. Both segments will hold on to their market shares of four per cent and six per cent, respectively.