Campaign India Team
Dec 07, 2010

Magnaglobal predicts India’s advertising economy will rise by 21% during 2011

Global advertising forecast also predicts online advertising will overtake newspapers as the world’s second-largest advertising medium by 2013

Magnaglobal predicts India’s advertising economy will rise by 21% during 2011

Magnaglobal, a division of IPG’s Mediabrands, has released an updated forecast for advertising  around the world alongside a comprehensive model including data for more than 60 countries covering years between 1999 and 2016. 

India and China will continue to stand out for their absolute size and relative growth. India’s advertising economy should rise by 21.0% in local currency terms during 2011, to generate R243 billion (more than 5 billion in US dollars).  Over the next five years Magnaglobal expects growth rates of 19.1% on average. China should be even more robust, with advertising revenues up 16.6% on average over the next five years. China will become the second largest market globally by 2013, and suppliers should generate 391 RMB in advertising revenues by 2016.  At constant currency exchange rates, this would be worth USD$57.4 billion.

Magnaglobal forecasts that media suppliers around the world will grow their advertising revenues during 2011 by +5.4% to total USD$412 billion on a constant currency basis, above our previously published expectations of +4.2%.  This follows 2010’s recovery-year growth rate of +6.9%, also above prior expectations for growth of +5.6%.  The ad-supported media economy is firmly on a path towards sustained gains in most countries around the world, with Argentina, India and China leading the way, more than offsetting declines from the struggling advertising sectors in Greece, Croatia and Ireland. 

Long term growth rates are also upgraded, reflecting stronger expectations of global economic recovery.  Magnaglobal's compounded annual growth rate (CAGR) for the global industry is +6.3% through 2016, with most years upgraded by more than a half percent compared to our forecast published in June of 2010. 

Video retains its dominance around the world, with more than 40% of advertising, a total of USD$169 billion, relying on TV in 2011.  Globally the medium should grow by 7.5% on average through 2016. Online advertising will grow even faster, overtaking newspapers as the world’s second-largest advertising medium by 2013, and total USD$117 billion in 2016.  This will occur largely due to market expansion as new advertisers have become the backbone of that medium. But newspapers will continue to grow modestly – up 1.7% in constant currency terms over the next five years – despite sustained declines in many markets.  In many countries, newspapers represent a viable means of distributing content to emerging consumer classes and do not face meaningful cannibalization from online competition.  Magazines face worse conditions with respect to online competition (especially with news and celebrity content), and should grow by only 0.1% each year through 2016.  Radio and Out-of-Home will grow on a global basis, up by 4.1% and 8.0%, respectively, over the next five years, slightly ahead of growth trends expected for 2011. 

Emerging media takes the forefront of the new forecast.  Magnaglobal introduces global estimates of mobile, online video and digital out-of-home advertising, along with cinema as platforms which Magnaglobal break out within Magnaglobal's totals.  In 2011, Magnaglobal estimates that online video will capture $4.7 billion in global ad revenues, and should rise by 19.6% each year through 2016, by which point the sector will generate $11.4 billion.  Mobile advertising is smaller, at $2.7 billion, and will grow at a similar pace.  By 2016, media owners should earn $6.6 billion from mobile advertising.  Digital outdoor advertising is increasingly important, but is smaller than mobile in scale in 2011 (at $2.6 billion in ad revenues) and should grow at a slower rate in years ahead, totaling $5.2 billion by 2016. Cinema captured $2.8 billion in 2011, and will grow at an average rate of 9.1% over the following five years. 

Source:
Campaign India

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