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08 June 2016 | E-Paper

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Last Modied: Wed, Jan 20 2016. 01 45 AM IST

Ad spending seen growing at 15.5% in

2016, driven by digital
GroupM estimates show digital advertising will account for 12.7% of all ad spending
in 2016, up from 9.9% in 2015

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Vidhi Choudhary

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Print advertising will expand 6%, compared to 5.2% last year. Photo: Priyanka Parashar/Mint

New Delhi: Ad spending in India will grow 15.5% in 2016 to Rs

5
.7,486 crore with digital
advertising expanding at the fastest pace of 47.5%, media agency GroupM, part of
global advertising group WPP Plc., said in its This Year Next Year report released on
Tuesday.
Last year saw ad spending grow by 14.2%, higher than GroupMs estimate of 12.4%, to
Rs
4
.9,758 crore.
Digital advertising will account for 12.7% of all ad spending in 2016, the agency
estimated, up from 9.9% in 2015. Print medias share will shrink from 32.4% to 29.7%.
And TV will remain the dominant medium with a 47.1% share, up from 46.3%.
India is the fastest growing ad market among all the major markets of the world.
2015 was the best year for ad spend growth weve had in the last ve years, said
C.V.L. Srinivas, chief executive at GroupM South Asia. While global headwinds are
building up in the new year, there are a number of positive factors that will help the
Indian ad sector grow at higher levels in 2016.
Consumer product, automobile and e-commerce companies will continue to drive
growth (as they did in 2015) and telecom, banking and nance, and the government
sector will join the party, according to Srinivas. Growth is also expected to get a llip
from events such as the T20 World Cup cricket tournament, Indian Premier League

(IPL) and state elections. While digital media will remain the fastest growing
platform, India is one of the few large markets where all traditional media platforms
will show positive growth, added Srinivas.

A better year for print

The big story in 2016 is that print is expected to have a better year compared to 2015.
Print advertising will expand 6%, compared to 5.2% last year.
The increase in ad spends expected from print-heavy sectors like auto, banking and
nance and the government sector augurs well for newspapers. Regional
advertising of telecom and consumer product brands will benet language dailies,

said the report.

The pace of growth in print advertising may have slowed, but the medium is
continuing to deliver results for advertisers, said Rahul Kansal, executive president,
Bennett Coleman and Co. Ltd that publishes the The Times of India and The

Economic Times.
The (expected) 6% growth rate allows the industry to keep its nancial picture
robust, Kansal said.
Television and radio will see slower growth than in 2015.
TV and radio advertising will grow 17.6% and 9.9% in 2016 compared with 18.6% and
10.4% growth in 2015.
The radio sector will continue to grow at about 10% for existing stations in key
markets like Delhi and Mumbai. However, radio companies are struggling with
limited ad inventory which is only expected to grow once the new radio stations
acquired through the Phase III auctions are set up, said Harshad Jain, chief
executive at Fever 104, run by HT Media Ltd, the publisher of Mint.
The GroupM report suggests higher radio advertising growth towards the end of
2016. There is scope for the medium to pick up towards end 2016 when most of the
new stations (set up after Phase III licenses, round 1 were issued) are fully
operational, it said.
The electronic auctions of the rst batch of the Phase III of FM radio auctions that
ran 125 rounds and lasted 32 days concluded in December last year. They had on
offer 135 channels in 69 cities.
The total value of sold channels was Rs
1.
,187 crore. However, the government made
more than Rs
3
.,000 crore from these auctions, including the migration fee from 245
stations that will move from Phase 2 to Phase 3.

Digital comes of age

According to GroupM, digital advertising spending will touch Rs
7
.,300 crore on the
back of higher investments in cross-screen campaigns. The agency expects Video
on Demand (VOD) services to gain popularity in India.
The Asia Pacic region is expected to overtake Western Europe as the second
largest market for VOD services by 2020, fueled by the rapid proliferation of
smartphones in China and India.
With the recent Netix service launch in India, several domestic and international
rms will actively market their VOD services and acquire customers in the next 12
to 24 months.
In a young country like India media habits are shifting towards digital and social.
2016 promises to be fabulous. Brands will question the role of tactical usage of
digital media and itll become more strategic. Itll continue to be an integrated world
with social rst campaigns getting more dominant, said Anusha Shetty, chief
executive at Autumn Worldwide, a Bengaluru-based social media marketing agency.
Consumer goods, e-commerce, telecom
According to the GroupM report, consumer product makers will remain the most
dominant sector in terms of ad spending with a 28% share of the total expenditure.
Many advertisers will increase their ad spending to spur demand, helped by the
buffer provided by low commodity prices, which have reduced their input costs.
E-commerce rms will continue to burn money on traditional media, spurred by
increasing competition and the existential drive to increase market share. GroupM
sees traditional retailers increasing their own presence online. With advertising
becoming a new revenue stream for companies such as Flipkart and Amazon, the
digital medium will see increased activity, the report explained.
The launch, and further roll-out of 4G services will see telcos splurge on advertising
and marketing.
These 4G network launches will be complemented by the launch of new devices, the
report pointed out.

Q & A with CVL Srinivas, CEO, GroupM, South Asia

Vidhi Choudhary

TOPICS: ADVERTISING

EXPENDITURE

DIGITAL MEDIA

GROUPM

First Published: Tue, Jan 19 2016. 03 25 PM IST

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