E-commerce players drive ad spends in 2014
NEW DELHI: India's largest media planning & buying agency GroupM predicts ad spends to grow 12.5% during Jan-Dec '14
GroupM, India's largest media planning and buying agency, said it has revised upward its forecast for growth in advertising expenditure in India for 2014 thanks to high spending by e-commerce companies, fast-moving consumer goods makers and political parties in the first half of the year. The WPP agency has raised its growth forecast for calendar 2014 to 12.5% from 11.6%.
"E-commerce is definitely turning out to be the star of the year for ad spend growth," CVL Srinivas, CEO, GroupM South Asia, told ET.
Apart from the growth in the three sectors mentioned above in the January-June period, the outlook on auto, durables and retail is strong in the coming months. The positive sentiment will take a while to translate to real ad spend growth as several macroeconomic and policy-related matters need to still fall in place.
"The first six months of this calendar year saw a 14% growth in ad spends at an overall level," Srinivas said. "Smartphone companies have also increased their advertising spend although mostly towards the second half of the year." GroupM's revised annual estimated advertising expenditure (AdEx) in India is part of a global report called This Year, Next Year (TYNY) 2014, which forecasts global advertising investments to finally exceed the pre-crisis peak of 2007-8 in real terms in 2015 at $560 billion, 5% more than the 2014 estimate.
The heavy spending by ecommerce players and smartphone makers will also be reflected in the upcoming festive season which starts with Onam and continues until Diwali.
"Categories that traditionally focus on the festive season like consumer durables, retail and auto are expected to see a surge in spends in the coming months. Ecommerce is expected to continue showing strong growth. Government is expected to step up spending as more schemes roll out. There will also be political advertising linked to assembly elections starting soon. All put together, it looks like the festive season will see a healthy double-digit growth over the previous year," Srinivas added.
According to the GroupM report, ad spend on television is set to grow to 14.8% in the second half of the year, against the previously predicted 12% although digital media continues to show the maximum growth with 35%, albeit on a smaller base.
"Digital continues to show the strongest growth at 35% and by end of 2014 will account for about 8% of the total AdEx. TV continues to grow in strong double digits. Regional dailies are helping the overall print segment grow. Cinema advertising is expected to pick up with big titles lined up over the next few months. This festive season is expected to be good for all media as advertisers attempt to create a big impact over a four-to-six week period," Srinivas added.
NEW DELHI: India's largest media planning & buying agency GroupM predicts ad spends to grow 12.5% during Jan-Dec '14
GroupM, India's largest media planning and buying agency, said it has revised upward its forecast for growth in advertising expenditure in India for 2014 thanks to high spending by e-commerce companies, fast-moving consumer goods makers and political parties in the first half of the year. The WPP agency has raised its growth forecast for calendar 2014 to 12.5% from 11.6%.
"E-commerce is definitely turning out to be the star of the year for ad spend growth," CVL Srinivas, CEO, GroupM South Asia, told ET.
Apart from the growth in the three sectors mentioned above in the January-June period, the outlook on auto, durables and retail is strong in the coming months. The positive sentiment will take a while to translate to real ad spend growth as several macroeconomic and policy-related matters need to still fall in place.
"The first six months of this calendar year saw a 14% growth in ad spends at an overall level," Srinivas said. "Smartphone companies have also increased their advertising spend although mostly towards the second half of the year." GroupM's revised annual estimated advertising expenditure (AdEx) in India is part of a global report called This Year, Next Year (TYNY) 2014, which forecasts global advertising investments to finally exceed the pre-crisis peak of 2007-8 in real terms in 2015 at $560 billion, 5% more than the 2014 estimate.
The heavy spending by ecommerce players and smartphone makers will also be reflected in the upcoming festive season which starts with Onam and continues until Diwali.
"Categories that traditionally focus on the festive season like consumer durables, retail and auto are expected to see a surge in spends in the coming months. Ecommerce is expected to continue showing strong growth. Government is expected to step up spending as more schemes roll out. There will also be political advertising linked to assembly elections starting soon. All put together, it looks like the festive season will see a healthy double-digit growth over the previous year," Srinivas added.
According to the GroupM report, ad spend on television is set to grow to 14.8% in the second half of the year, against the previously predicted 12% although digital media continues to show the maximum growth with 35%, albeit on a smaller base.
"Digital continues to show the strongest growth at 35% and by end of 2014 will account for about 8% of the total AdEx. TV continues to grow in strong double digits. Regional dailies are helping the overall print segment grow. Cinema advertising is expected to pick up with big titles lined up over the next few months. This festive season is expected to be good for all media as advertisers attempt to create a big impact over a four-to-six week period," Srinivas added.
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