Group M has predicted in its This Year Next Year (TYNY) report that ad spends in India will register a growth of 15.5% for the calendar year 2016 over the corresponding period in 2015. The last calendar year closed on a promising note, with the advertising expenditure in India closing at Rs 49,758 crore, a growth of over 14.2% over 2014.
FMCG remains the most dominant sector with a 28% share of the AdEx. Despite facing volume pressure, the sector is expected to continue ad investment aided by the softening of commodity prices. In 2016, e-commerce ad spends are expected to be high on the back of increasing competition, market expansion and newer players entering the space. Many leading traditional retailers will expand their e-commerce presence in 2016 even as consolidation continues in the sector. The opening up of e-commerce platforms for advertising will see further traction in 2016.
With the advent of 4G services in India, telecom service providers are expected to roll out extensive marketing campaigns across media. This roll-out will also see global and domestic handset manufacturers launching new models of 4G/ LTE handsets. Another big contributor to the Indian AdEx this year will be the Auto sector, on the back of multiple launches across both our-wheelers and two-wheelers. GroupM estimates the Digital AdEx to grow by 47.5% in 2016 to Rs 7,300 crore from the earlier Rs 4,950 crore. A significant part of this growth is on the back of higher investments in crossscreen campaigns. The Digital AdEx is estimated to take a 12.7% share of the total AdEx in 2016, as Video on Demand (VOD) services gain popularity in India. With the recent Netflix service launch in India, several domestic and international players will actively market their VOD services and acquire customers in the next 12 to 24 months.
2016 is estimated to be a better year for newspapers than 2015. The increase in ad spends expected from Print heavy sectors like Auto, BFSI and the Government sector augurs well for newspapers. Regional advertising of Telco and FMCG brands will benefit language dailies. While Print as a medium is facing a lot of pressure from Digital, there is still headroom for growth in certain pockets and amongst certain audience clusters.
While Radio is expected to grow at a little over 10%, there is scope for the medium to pick up towards end 2016, when most of the new stations (set up after Phase III licenses, Round 1 were issued) are fully operational. Digital audio platforms are gaining in popularity, opening up a new format for radio. There has been an upswing in Cinema Advertising in the last few years, which will continue in 2016 with an estimated 25% growth in ad spends. The medium can expect more brands to come on board with longer term deals if they invest in measurement and build more accountability. At present, Cinema Advertising is less than 1% of the total ad spends.
