In the APAC region, India showed one of the highest growth rates, as the Indian media owner advertising sales rose 14 per cent to Rs 560 billion (approximately $8.7 billion) in 2016. The growth was driven by robust economic activity in the country and continued expansion of media access and consumption. Growing in double digits almost every year since 2010, the Indian market has now doubled in size compared to six years ago.
MAGNA predicts the country’s advertising revenues will grow 13 per cent in 2017 as the industry benefits from an improved set of audience measurement systems. The report attributes the high growth potential of the country to its lowest advertising intensity, of the 70 other countries monitored by MAGNA, at only $7 per year per capita. By 2012, MAGNA forecasts ad sales to grow to Rs 1 trillion propelling India firmly in the top 10 ad markets.
Economic Impact On AdvertisingWith the International Monetary Fund (IMF) projecting the Indian economy to grow at 7.6 per cent in 2016 and 2017, the country continues to be a regional and global turbine.
MAGNA’s report outlines that the monetary policy framework focused on inflation and passing of the GST Bill will be positive for investments and creating demand. While contained inflation and higher public wages are keeping urban consumption buoyant, in rural India, a normal monsoon after consecutive years of failed weather should bolster discretionary spends.
The surprise demonetisation move by Prime Minister Narendra Modi in November 2016 is expected to have a transitory impact on the economic activity as millions still use cash. The MAGNA report highlights that this move resulted in curtailed advertising spends, especially in daily consumption and asset generation among sectors such as FMCG, durables, jewelry, realty and luxury.
Bifurcation Of SpendsIndia’s advertising revenue, which contributes 0.37 per cent to GDP, is likely to grow in double digits on average for the next five years and touch Rs 924 billion by 2020. MAGNA reports that the 2016 media owner revenue grew by an estimated 14.1 per cent (previously 16.2 per cent) to Rs 560 billion.
Television led the market share in ad spend with 41 per cent. It stood at 13.2 per cent (down from 15.2 per cent in June) largely because of a slowdown in e-commerce and FMCG advertising.
Print was the second biggest media category in ad sales with 36 per cent share. It grew 8.2 per cent. Traditional advertisers including the Government of India, auto, education and FMCG, all contributed to the growth.
Digital media’s market share increased from 12 per cent in 2015 to 14 per cent in 2016. Among digital, social grew the fastest at 63 per cent followed by video at 42 per cent. Overall, digital grew 35 per cent over 2015. Mobile’s share went up by 6 percentage points to 25 per cent. MAGNA forecasts mobile to overtake desktop by 2020. Radio and OOH ad sales grew 13.4 per cent and 15 per cent, respectively and together account for 9 per cent market share.
Outlook For 2017Media owner revenue is expected to grow 13.5 per cent in 2017 to Rs 635 billion. Sector-wise, social awareness, auto, telecom, education, FMCG etc., are expected to spend to their potential tapping into increased consumer demand. If the GST Bill is approved and implemented from Q2 2017, it will add to the optimism and spur investments, MAGNA expects.
TV ad spend is expected to grow by 13 per cent. Print will also continue to grow in India, though it is now losing market share to digital. With print revenue expected to grow 7.2 per cent, India is one market where circulation is still growing thanks to rising literacy. Radio’s advertising revenue is expected to grow by 14 per cent.
Digital ad sales are to grow by 30 per cent, increasing its market share to 17 per cent.
MAGNA highlights that in 2017, the media industry will benefit from a new set of audience measurement tools that better reflect consumption and help the industry to realise merit- based value: the Indian Readership Survey will become available again in Q1 2017 with a larger sample.
The Audit Bureau of Circulation will be measuring online properties, which is an industry first, and the television audience measurement provider BARC will increase the number of metered homes as well as launch cross device viewership measurement.
BW Reporters
The author is special correspondent at Digital Market Asia, is fascinated by the evolving digital media industry, and has focussed on tracking developments in the field in Asia Pacific.
