Zenith Forecast: India overtakes UK to reach number four in 'top contributors to ad spends 2017-2020'

According to Zenith's Advertising Expenditure Forecast, the Indian advertising industry will close at Rs.53, 918 crore in 2017. A report in December last year had predicted ad spends in the country to be Rs 54,344 crore at the end of this year. The drop in the growth has been attributed to demonetisation, that was introduced in India in November 2016.

 

The report expects adex for India to reach Rs 58,422 crore by the end of 2018, registering a growth of 8.4 per cent. 

 

Growth rate for television is pegged at 9 per cent while newspapers will grow at 5 per cent. Radio will grow at 10 per cent, while cinema and out of home will grow at 5 per cent respectively.

 

According to Zenith, India has gained a position to reach number four in the 'top ten contributors to ad spend 2017-2020'. It has overtaken the UK and stands behind USA, China and Indonesia. 

 

Between 2017 and 2020, global advertising expenditure is expected to increase by US$72 billion in total. The US will contribute 27 per cent of this extra ad expenditure and China will contribute 20 per cent, followed by Indonesia, India, the UK and Japan, which will contribute 4 per cent each.

 

The report further states that global ad expenditure will grow at 4.1 per cent in 2018, reaching US$578 billion by the end of the year. This forecast is below the 4.2 per cent rate Zenith predicted for 2018 in September, with marginal downgrades in North America, Western Europe and Asia Pacific, and upgrades in Latin America and Central & Eastern Europe.

 

Internet advertising working 

 

The report states that 'internet advertising is working harder than advertising in other media'. It quotes that in 2016, internet advertising accounted for 34 per cent of global ad budgets but produced 35 per cent of brand experience. In 2014 advertisers spent 27 per cent of their budgets on internet advertising, which produced 21 per cent of brand experience. In 2015, though, internet advertising contributed to 30 per cent of both budgets and paid brand experience. Zenith expects internet advertising’s share of global ad spend to continue to rise, reaching 40 per cent in 2018 and 44 per cent by 2020. Its value will rise from US$203bn in 2017 to US$225bn in 2020. 

 

In Sweden and the UK, Zenith estimates internet advertising to account for more than 60 per cent of total advertising expenditure next year.

 

In India, internet ad spend will capture 11.6 per cent of the market in 2017. Zenith has a forecast of 20.4 per cent growth in internet advertising in India in 2018, compared to 8.4 per cent growth for the market as a whole. By 2020, internet will account for 15.4 per cent of total ad spend in India, according to the report.

 

Tanmay Mohanty, group CEO, Zenith India, said, “Growing internet penetration accelerated by operators such as Jio will significantly enhance digital adspends in India and give access to previously untapped markets. India has seen some fluidity in overall ad-expenditure but remains one of the fastest growing advertising markets globally.  With the dust settling down on demonetisation and GST, we expect a measured recovery on ad spends. Consumer confidence is definitely on the rise. In 2018, mobile handsets, FMCG, automobiles, BFSI, travel and tourism and political ads will drive up the pace on ad spends.”