IPG Mediabrands forecast 16.2% Adex growth in 2016

The half-yearly report put together by Magna Global expects the size of the industry to touch $9 billion (Rs 564 billion). India has pipped Italy to enter the Top 10 list this year

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IPG Mediabrands forecast 16.2% Adex growth in 2016

IPG Mediabrands forecast 16.2% Adex growth in 2016

The half-yearly report put together by Magna Global expects the size of the industry to touch $9 billion (Rs 564 billion). India has pipped Italy to enter the Top 10 list this year

BestMediaInfo Bureau | Delhi | June 16, 2016

IPG Mediabrands Magna Global 

IPG Mediabrands India, part of the US-listed Interpublic Group and the second largest media agency conglomerate in the country, forecasts 16.2% growth of Adex in 2016.The size of the industry is expected to touch $9 billion (Rs 564 billion). This half-yearly report has been put together by Magna Global, the strategic global media unit of IPG Mediabrands.

Magna in December 2015 had predicted the Adex to grow 18.4% in 2016 and has now revised it to 16.2%. It also reports an early prediction of the India Adex in 2017, which it says will grow 15.7%. India pips Italy to get into the Top 10 list this year and is estimated to move up four ranks to become the 6th largest advertising market by 2020.

India will retain its position as the fastest growing economy with real GDP growth of 7.5% in 2016. According to the International Monetary Fund (IMF), India is likely to maintain the same GDP growth in 2017 as well. Consumer inflation slightly outside of target will force the central bank to hold on to its policy rates. However, the earlier reduction in rates gave the much needed impetus to automobile, housing, durables and education sectors. The farm sector, if favoured with a good monsoon, will meet its output target. The report estimates private consumption to mirror the growth rates and push higher marketing spends.

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

Shashi Sinha Shashi Sinha

Shashi Sinha, CEO, IPG Mediabrands, said, “The outlook is extremely positive as globally India remains one of the fastest growing markets. In fact, India is now one of the top ten advertising markets in the world.”

Talking about the revised forecast, S Venkatesh, EVP, Director Intelligence Practice, Magna Global India, said, “Basis 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 suggests a lesser significant acceleration.”

Sectoral forecast

Television with 42% market share will grow 17%. The biggest contributor to revenue will be the T20 World Cup, Indian Premier League (IPL) and non-cricketing leagues buttressed by E-commerce, Telecom, Auto and CPG advertising. Addressable television and expansion of measurement into rural India equips advertisers to reach more consumers and broadcasters to monetize now counted audience. Measurement will evolve to include addressable TV audience. Though connected TV currently doesn't pose a threat to linear advertising, it will open doors for more on-demand content access. Mushrooming of both domestic and international OTT (over-the-top) players will eventually fragment TV viewing time.

Print will continue to be the second biggest medium in India with 35% market share and ad sales growth of 8%. Conventionally, print heavy advertisers in CPG, BFSI, Automobile and now E-commerce contribute to the segment's growth.

Digital formats continue to disrupt traditional with the highest growth at 40% and increasing its share of market by two points to 13%. 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, one can expect advertisers to earmark higher promotional budgets.

Radio through footprint expansion along with increase in volume is estimated to grow 18% in 2016. OOH will grow 15% in 2016. Both these segments will hold onto their market shares of 4% and 6%, respectively.

Advertising growth forecast

IPG Mediabrands chart 1

Top 10 advertising markets (2016-2020)

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APAC ranking

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