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Carat predicts India to witness highest growth rate in ad spends in 2017

According to the latest global ad spends report released by the company, the upsurge of digital to account for 27.0 per cent of advertising spend in 2016 and extend significantly to 29.3 per cent in 2017, reaching USD 161 billion globally

BestMediaInfo Bureau | Mumbai | April 19, 2016

Click on the image to view the full report. Click on the image to view the full report.

Calculated from the data from 59 markets across America, Asia Pacific and EMEA, Carat, one of the global media network major, has predicted the global advertising spends to reach USD 538 billion in 2016. The Indian advertising market is expected to grow by 13.9 per cent in 2017, while this rate might be 12 per cent in 2016, the highest amongst the all markets studied.

Fuelled by high-interest media events taking place during the year - the US presidential elections, Rio 2016 Olympics and Paralympics and the UEFA EURO 2016 championship - the positive outlook for 2016 is predicted to continue into 2017, with a global advertising growth of 4.5 per cent.

The latest forecasts reconfirm the rise of digital as the established driver of global advertising spend growth, powered by the upsurge of mobile (37.9 per cent), online video (34.7 per cent) and social media (29.8 per cent) in 2016, the strength of digital is expected to continue to grow at double digit prediction levels of 15.0 per cent this year, and a further 13.6 per cent in 2017.

In 2015, all regions reported positive growth, from Western Europe at 2.8 per cent, 4.3 per cent in North America, 3.6 per cent in Asia Pacific and Latin America at 11.0 per cent. Regional confidence is predicted to continue in most regions in 2016, despite volatility in some individual markets.

Despite a decline in global growth forecasts due to China and Brazil’s economic volatility, Asia Pacific and Latin America advertising markets remain strong in 2016, achieving 4.4 per cent and 10.5 per cent year-on-year growth respectively.

Digital continues to be the star performer for growth level globally with Hong Kong and Estonia now joining the list of 12 markets where digital is now the principal media used based on spend. The US, Germany, Taiwan and Austria are predicted to join this list in 2018.

Whilst Digital is constantly closing the gap, TV continues to command the majority of market share with a steady 42.0 per cent in 2015 and spend is predicted to grow by 3.1 per cent this year as the Olympic Games and US elections are predicted to generate significant TV viewership across various markets.

In addition, Carat’s forecasts reconfirm the steady decline in print (newspapers and magazines) in 2016 and into 2017 with newspapers declining by 5.4 per cent and magazines by 1.7 per cent in 2016. The report highlights positive year-on-year growth in 2016 for all other media, including Outdoor (3.4 per cent), Radio (2.2 per cent) and Cinema (2.8 per cent), with the latter expected to grow further at 5.0 per cent in 2017.

Jerry Buhlmann, CEO of Dentsu Aegis Network, said, "The strength of digital continues to be the dominant element in the growth of the global advertising expenditure while TV spend remains as the foundation of our industry. As advertising becomes more data driven and complex, it's crucial to move rapidly to navigate and meet the needs of the digital economy and this is reflected in the innovative capabilities and approach we provide to our clients."

More about Indian market

In India, the TV advertising revenues are forecast to grow by 12.3 per cent in 2016, supported by strong spending from e-commerce companies and FMCG brands. While TV is expected to remain dominant for many years to come, advertisers are increasingly utilising online video as an invaluable complement. However, share of total digital advertising spend in India is still relatively low at 8.9 per cent (2016).

Unlike in other markets, positive newspaper advertising spend growth is expected to continue in India at 10.5 per cent in 2016, primarily due to investment from e-commerce, automotive and a small contribution from Government spending. Retail advertisers also continue to spend on print.

Carat’s first forecasts for 2017 predict continuing strong growth for the advertising market in India with an estimated increase of 13.9 per cent and expected favourable economic conditions in which advertisers vie for consumers’ attention.

Click here to view the full report.

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