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The bottom-up approach, which CRISIL Research has primarily used to forecast advertising spends, is
based on forecasting advertising spends across nine key sectors. These sectors are estimated to
comprise around 75 per cent of overall advertising spends.
Advertising spends forecast - Approach and
methodology
May 07, 2014
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Ad spends forecast methodologyincorporates top-down and bottom-up approaches
To forecast growth in advertising spends, CRISIL Research has blended two approaches - top-downand bottom-up approaches.
The top-down approach stems from our projections of GDP growth. The bottom-up approach, which has primarily been used for
near-term forecasts, is based on the projection of advertising spends across key advertising sectors, viz FMCG, BFSI, telecom,
automobiles, education, retail, mobile handsets, household appliances and ready-made garments. Together, these sectors are
estimated to contribute to around 75 per cent of total advertising spends.
The main steps followed to arrive at the bottom-up forecasts were:
The revenues of the large advertising sectors were projected.
The ratio of advertising spends-to-revenues of the sector was estimated using a representative set of companies.
The distribution of the resultant advertising spends across various media platforms was estimated for each sector. For e.g.,
the FMCG vertical directs 60-70 per cent of its advertising spend towards television.
These spendswere then aggregated to get the advertising spend on different media(print, television, digital, etc).
Advertisement forecast methodology

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