The Global Ad Spends Forecast by Dentsu Aegis Network (DAN) predicts ad spends India will grow by 12.5 per cent in 2018, up from 9.6 per cent in 2017, reflecting its solid economic growth trajectory. Digital media spend is expected to increase by 30 per cent in 2018 with 43.6 per cent growth in mobile spend, which will account for 47 per cent of total digital spend in 2018. The advertising market in India is forecast to grow by a further 12.5 per cent in 2019.
DAN had predicted in June 2017 that India will grow by 13 per cent in 2018.
Based on data received from 59 markets, the report puts global growth at 3.6 per cent in 2018, up from 3.1 per cent in 2017. Asia Pacific ad spend growth is forecast to accelerate to 4.2 per cent in 2018, up from 3.5 per cent in 2017. The region is forecast to be the leading contributor to the global ad spends growth in 2018, contributing 39.7 per cent, $8.1 billion of the total $20.3 billion incremental global increase, led by markets China, Japan, India and the Philippines.
Events that will play an important role in 2018 include Winter Olympics, Commonwealth Games, Asian Games and state elections. These events are all expected to stimulate ad spend growth. However, a slowing of growth in markets like Australia and China can be attributed to multiple contributing factors such as a naturally maturing market, ad fraud and data accuracy issues on top of a general economic slowdown.
Speaking on the Indian context, Kartik Iyer, President Media Brands and Amplifi, Dentsu Aegis Network India, said, “2018 is expected to be a growth year considering the stabilisation post GST. Another driver of growth would be the fiscal policies of the government, which are expected to be pro spending and supporting the middle income groups. In India, the significant improvement in availability of high-speed networks at a lower cost is making a huge impact in the efficiency metrics of digital media. This will continue and therefore will support the faster growth of digital advertising. As marketers, we need to be prepared to harness this change and maximise engagement with our customer and thereby deliver higher returns for our brands. As an agency group, DAN has overinvested in this area and today has the largest, most experienced group of companies that are harnessing this rapidly changing area.”
Within this context, digital media channels continue to disrupt ad spend in 2018:
* Digital media channels will continue to power ad spend growth, growing globally by 12.6 per cent in 2018, versus 15 per cent in 2017, to reach $220.3 billion.
* Mobile will go from strength to strength, reaching $121.1 billion having overtaken desktop as a share of total digital spend in 2017. Desktop will continue to lose global share (-1.5 per cent since 2016), versus mobile’s gains (8.2 per cent since 2016).
* Digital overtakes TV, by a margin now exceeding previous forecasts. Digital ad spend will account for 38.3 per cent share of total ad spend, TV 35.5 per cent.
* Paid search accounts for the lion’s share (40 per cent) of digital ad spend, with voice-activated devices helping to power its growth. Amazon's Alexa app was the top app for Android and iPhone on Christmas Day 2017, with the company claiming its devices enjoyed the best holiday season yet.
* Video (24.5 per cent) and social (23.5 per cent) will also drive growth within digital ad spend, powered by smartphone take-up and mobile-video in particular.
*·Programmatic spend will rise by 23 per cent as established players and startups compete over ad tech.
Commenting on the latest forecasts, Jerry Buhlmann, CEO, Dentsu Aegis Network, said, “The latest ad spend forecasts show a market in transformation, but not recession. The challenge for brands is to navigate an uneven economic outlook alongside a rapidly evolving tech and innovation landscape. In many markets, disruptive innovation – from mobile, voice activation and new ad tech players – is still providing new sources of growth and we forecast this trend will continue into 2018.”
“Succeeding in this environment requires global consistency through appropriate platforms and systems, while also the flexibility and agility to work with a wider ecosystem of tech-enabled solutions. It demands a relentless focus on understanding the consumer, using data to reach real people, driving relevance, addressability and business growth,” he said.
Nick Waters, CEO, Dentsu Aegis Network, Asia Pacific, stated, “Asia Pacific continues to lead the growth in digital ad spend. With the region’s fast adoption of technology and innovation, there will be a substantial shift towards mobile and smart devices. As a result, mobile online video ads will be the main drivers of growth within digital ad spend across the region.”
Waters further said, “Data continues to be central to our business in Asia Pacific and with better understanding of new technologies, structures and models for business growth, agencies must help brands move from being disrupted to disruptor.”