Media events such as the T20 Cricket World Cup, the Indian Premier League and state elections will spur the growth in ad spends
BestMediaInfo Bureau | Mumbai | September 9, 2016
Carat, a leading global media network, published its updated forecasts for worldwide advertising expenditure, showing a positive outlook for the global advertising market in 2016. The bright side is set to continue in 2017 powered by the ongoing growth of digital. Indian ad spend is expected to grow at +12 per cent in 2016 and +13.9 per cent in 2017.
The India story
Forecasts continue to be extremely bright in India, the highest spending and fastest growing advertising market globally. The spend is expected to accelerate in the wake of multiple media events, including the T20 Cricket World Cup, the Indian Premier League (IPL) and state elections.
India is one of the few large markets where all traditional media platforms still show positive growth. Holding the highest share of spend of 38.5 per cent in 2016 and 38.0 per cent in 2017, TV is forecast to grow by +12.3 per cent in 2016 and +12.5 per cent in 2017, driven by investment from FMCG brands and e-commerce companies.
India is gradually transitioning from a ‘mobile first’ to a ‘mobile only’ country. Mobile spend is expected to grow by +27.2 per cent in 2016 and +35.1 per cent in 2017.
Commenting on the Indian ad spends, Ashish Bhasin, Chairman and CEO South Asia, Dentsu Aegis Network, Chairman Posterscope and MKTG Asia Pacific, said, “Carat, the leading media agency from Dentsu Aegis Network, had anticipated that the advertising spends in India will grow by 12 per cent in 2016 and, in our latest forecast, we continue to maintain that. This makes India one of the fastest growing markets in APAC and the world. We anticipate that given the tailwinds through the macro economic factors, GST and other reforms, 2017 will have an even better growth of 13.9 per cent.”
He further said, “What is also unique about India is that all types of media, including print, still continue to grow, albeit at different rates. This is the first time an in-depth, realistic analysis of this magnitude has been done for our market and I am sure, in consonance with its leadership position, Carat will continue to provide the industry with accurate and realistic market information. This not only helps our clients get a good preview to the forthcoming year but also helps us devise our business strategy by continuing to be at the cutting edge of changes and not only predicting tomorrow but in many ways influencing it for our business and our clients.”
The global story
Based on data received from 59 markets across America, Asia Pacific and EMEA, Carat’s latest global forecasts show that advertising spend will reach US$548.2 billion in 2016, accounting for a +4.4 per cent year-on-year growth. The healthy outlook is fuelled by a buoyant 2016, marked by high-interest media events, including the UEFA EURO championship, the Rio 2016 Olympics and Paralympics, as well as the upcoming US presidential elections.
Commenting on the Carat Advertising expenditure forecasts, Jerry Buhlmann, CEO, Dentsu Aegis Network, said, “Carat’s latest forecasts show continued confidence and positive momentum for global advertising spending. Expanding over three times faster than the global rate, digital reaffirms itself as the unrivalled driver of growth. As the digital economy brings complexity, speed of change and disruption, it is only through digital that brands can build engagement and remain relevant to their audience on a fully addressable and real-time basis.”
“Buhlmann added, “In a world where connectivity and convergence are now the norm, mobile, social and online video lead the rapid growth of digital investments. With more flexible, targeted and data-led media solutions, mobile, social and video are driving the demand for richer and more powerful consumer engagements, in the right place, at the right time.”
The continued growth of digital, the leading media type in 13 out of 59 markets in 2016, is fuelled by mobile, online video and social media, which are increasingly attracting more advertising investment. Digital spend is predicted to grow by +15.6 per cent in 2016 and rise further by +13.6 per cent in 2017, reaching US$168.2 billion next year.
Will Swayne, Global President, Carat, said, “Digital continues to significantly outpace the growth of all other media and is now the number one media in 13 markets. Digital, and the data created, is redefining brands and agencies’ understanding of people’s behaviour and the ability to go to market with greater insight, addressability and agility.”
Mobile continues to show the highest spend growth across all media in 2016, with a year-on-year estimated increase of +48.8 per cent in 2016, outpacing predictions of +37.9 per cent in the March 2016 report.
Social media spending is forecast to increase globally at a high double-digit rate of +35.3 per cent in 2016 and +28.7 per cent in 2017. The upsurge of social media and mobile is also contributing to the growth of online video advertising spend, forecast to increase globally by a strong +41.3 per cent in 2016 and +32.8 per cent in 2017 as brands consistently create and invest in video content to be distributed and curated online.
Programmatic spend is forecast to increase at a rapid rate of +32 per cent in 2016 and further +25 per cent in 2017. Boosted by the considerable rise of programmatically booked inventory, display (banners) spend, including desktop and mobile, is forecast to increase by +12.4 per cent in 2016 and +9.6 per cent in 2017.
Television continues to command the highest share of total media spend globally with 41.1 per cent in 2016 and a predicted 40.3 per cent in 2017. Compared to the multiple media types available within digital, TV is predicted to remain the single largest investment point for advertisers. However since its peak in 2010 at 44.0 per cent share of total spend, TV has been on a slow declining trend with share decreasing by on average 0.5 per cent points annually in the past five years.