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Media agencies see Digital advertising growing most in 2016

At the IAA ‘Retrospect & Prospects 2016’, IPG Mediabrands, ZenithOptimedia and Madison World have predicted the Indian advertising industry growing at 13.9% to 18.4% in 2016.

Raushni Bhagia | Mumbai | February 24, 2016

Retrospect-&-Prospects-2016 (From left) Shashi Sinha, Vikram Sakhuja and Anupriya Acharya with moderator Ashok Venkatramani

Three of the biggest media agencies in the country – IPG Mediabrands, ZenithOptimedia and Madison World – are immensely bullish and confident about the Indian advertising industry’s growth in 2016.

Anupriya Acharya Anupriya Acharya

Representing the three media giants groups were Shashi Sinha, CEO, IPGMediabrands, Vikram Sakhuja, Group CEO, Madison World, and Anupriya Acharya, Group CEO, ZenithOptimedia at the third edition of ‘Retrospect and Prospect’, the annual adex forecast discussion session held by the Indian Chapter of International Advertising Association (IAA).

From a bird’s eye view, the three industry experts gave a fairly similar picture of growth expected to be in the range of 13.9 per cent to 18.4 per cent. The growth of digital medium will be immense and all of them stressed on the need for a proper dissection of the various verticals under Digital, before going further on it.

While Sinha projected a highly optimistic growth of 67 per cent for Digital, Acharya pegged it at 25 per cent, while Sakhuja predicted it at 30 per cent. Television remained of prime importance according to all the three predictions. However, Print is expected to significantly drop in the next few years, and see a marginal decrease in 2016.

Shashi Sinha Shashi Sinha

Sinha said, “Looking at 2020 from here, we expect that Digital and Print will be quite at the same positions, garnering similar attraction from the market. Print’s decline is expected to be as steep as Digital’s growth.”

Another common factor in all the three forecasts was the fact that the Indian advertising industry is growing at a much higher rate compared to global figures. “India is expected to see a growth of about 16.8 per cent this year, while the global market is eyeing somewhere close to 4.6 per cent. The ratios are comparable to the previous year, when India grew at about 17.6 per cent and the global rate was 3.8 per cent. With the Chinese market is witnessing a slowdown, India has all the more opportunity to show up,” said Sakhuja in his presentation.

FMCG was singled out as one of the biggest contributors of growth across media, especially television. Print and Digital are expected to feed more on automobiles, 4G, banking, financial services &insurance (BFSI)) and telecom. ZO’s Acharya foresees the digital market growing from Rs 3,667 crore in 2015 to Rs 4,583 crore in 2016. “Along with immense growth come great challenges in the digital area. Majority of spends is happening on desktop while the consumption has seen a rise on the mobile platform. Not many clients are mobile ready and neither does the platform offer much scope of advertising as of now. Most of the search (50 per cent) has moved to mobile handsets too. Moreover, there are merely 4-5 impact properties and social media is moving beyond ‘likes’ and ‘shares’ and clients need to really gear up faster than the consumers,” she said.

Vikram Sakhuja Vikram Sakhuja

The three media specialists also discussed the role of inflation in the coming year’s growth prospects. While Sakhuja said that the inflation analysis is still to be done, he felt that it will not play a very big role. However, Sinha straightaway put two-thirds of this growth to inflation and the balance one-third to inventory. Acharya too said that inflation will be significant despite increase in inventory because the ratio of rise of inventory and inflation won’t match completely.

Sinha also stressed that the small and middle sized enterprises (SME) have a very crucial role to play. As the rural market has seen a significant slowdown because of drought, SMEs can play an empowering role. Government policies are also expected to affect the industry’s growth positively. “The global attention that India has got will have a positive rub-off on the advertising world,” remarked Sakhuja.

Growth forecasts:

ZenithOptimedia IPG Mediabrands Madison World
Growth in 2016 over 2015 13.9% 18.4% 16.8%
Ad industry size at end-2016 (in Rs cr) - 57,632 51,365
Growth of TV 15% 15% 20%
Growth of Print 11.5% 8% 10%
Growth of Digital 25% 67% 30%

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