Ad spend to grow 14% this year on elections, cricket world cup

MUMBAI: The advertising market is likely to grow at 14 percent to Rs 80,678 crore this year, the fastest growing market globally, driven by strong macroeconomic factors, general elections and the Cricket World Cup 2019, according to global media agency Groupm.

The growth in ad spends in 2019, it noted is nearly two times of the estimated GDP forecast of 7.5 percent.

India will be the 10th largest market in ad spends and third highest contributor to the incremental ad spends, only behind China and USA and the tenth fastest growing country with respect to ad spends across the globe. Among the sectors, FMCG, auto, retail, e-commerce, tech/telecom are expected to contribute to twothird of ad expenditure in 2019.

"There are going to be two forces that will play out in 2019 and that is going to be the general elections and the Cricket World Cup and both of these are really exciting highly dynamic and have a major impact on the media market," Groupm South Asia chief executive officer Sam Singh said. The special eventselection and sports-together are likely to contribute 3 percentage increase this year, with their spends divided equally.

The agency expects the ad spends by political parties to be "similar but maybe 5-10 percent increase" from the previous general elections. "While we are estimating the global advertising expenditure to grow at 3.6 percent, India would be witnessing the fastest growth at 14 percent and reach an estimated Rs 80,578 crore. This would be approximately 2x of the estimated GDP growth in India," Singh added. In 2018, advertising expenditure is estimated to grow 15 percent to Rs 70,602 crore against the agency's estimate of a lower 13 percent growth. Singh noted that this year 37 percent of incremental ad spends will go towards digital advertising including mobile.

The scale at which we are witnessing this digital transformation, Groupm estimates the Digital Adex to continue to grow by 30 percent in 2019 to Rs 16,038 crore, he added.

Digital that was estimated to be Rs 12,337 crore in 2018, is expected to be 20 percent of the total media mix this year.

"Indian ad spends CAGR between 2014-2018 is at 13 percent and 2019 expected to witness a higher growth. India is unique among key markets and will witness growth in all media segments and not just digital," Groupm South Asia chief operating officer Prasanth Kumar said. Television is expected to continue to grow at a steady pace and this year, the growth rate for TV is estimated to be 15 percent touching Rs 38,612 crore from Rs 33,577 crore in 2018, a share of 48 percent in the total ad spends.

Print is estimated to grow by 2.2 percent and the share of print to all media is expected to be at 23 percent, with ad spends expected to touch 18,368 crore from Rs 17,970 crore last year, driven by elections and DAVP rate hike.