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India to become a one-trillion ad market by 2022: Magna Adex Report

Television will still be the largest media in 2022 with a market share of 41 per cent. Digital and print will have equal share of 25 per cent, each. Mobile will displace desktop as the third largest category by 2020

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BestMediaInfo Bureau
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India to become a one-trillion ad market by 2022: Magna Adex Report

The Indian advertising market will touch the ‘one trillion’ ceiling by 2022, as it is expected to clock Rs 1.07 trillion by then. It is expected to experience a growth of 12.1 per cent CAGR in the next five years, starting with Rs 683 billion in 2018, as per the Magna Adex report released by IPG Mediabrands.

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Magna is the intelligence, investment and innovation strategies agency of IPG Mediabrands.

India has waned through the lingering impact of currency exchange in November 2016 and passed through the effect of the unified tax structure in July this year. Transitory costs for introducing bold structural reforms have been paid and upswing in economic activity is strengthening. The bank recapitalisation plan coupled with insolvency and bankruptcy code 2016 revived the sector and this will boost private investment. Revival in rural economy and the growing middle class will boost economic growth. GDP in real terms is expected to grow 6.7 per cent, a speck slower than the earlier projected 7.17 per cent. In 2018, the International Monetary Fund (IMF) report predicts a growth of 7.4 per cent.

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Meanwhile, the growth in advertising will be led by digital with 21.6 per cent. Television will still rule the top as the largest media in 2022 with a market share of 41 per cent. Digital and print will have an equal share of 25 per cent, each. Mobile will displace desktop as the third largest category by 2020.

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According to the Magna Adex report, United States and China contribute close to 50 per cent of the incremental ad dollars between 2018 and 2022 while India ranks third with a six per cent contribution. The traditional categories like print are so strong and growing YOY in India that over 60 per cent of these incremental dollars is coming from traditional categories.

2017’s estimated Adex growth rate of 11.5 per cent earlier in June has been revised marginally downwards to 11.1 per cent. In 2018, we expect the ad spends to grow 12.1 per cent.

Categories driving up spends next year

Auto enjoys a strong domestic demand due to rising income, rising middle class and a young population. Demand for commercial vehicles due to heightened infrastructure activity and government’s focus on electric vehicles to meet emission targets are some of the growth drivers.

FMCG penetration will increase with modern trade growing faster in tier-II and tier-III cities. Rising disposable income among rural consumers, e-commerce strengthening their offering with daily products, evolving consumer lifestyle and government FDI policy are infusing growth.

Banking demand will rise, thanks to increase in working population. Housing and personal finance are key drivers. Government’s financial inclusion plan is expanding the reach of banking services and insurance coverage to rural segment.

Consumer Durables demand will grow with rural electrification and e-commerce expansion.

E-commerce growth is propelled by increasing smartphone penetration, digital literacy combined with affordable data costs. GST will help e-commerce players to streamline supply chain and eliminate dual taxes. The sector is attracting more users from tier-II and tier-III cities.

Info@BestMediaInfo.com

Magna Adex Report
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