The Indian advertising industry is set for heady days ahead, though at a tad slower pace than the previous year. The industry that grew a whopping 16.4 per cent in 2014, is expected to slow down this year and grow by just 9.6 per cent in 2015.
The Pitch Madison Advertising Outlook report has said that by the end of 2015, the total advertising market in India would be Rs 40,658 crore, and that over the past two years, the advertising market would have grown by 27.5 per cent.
Outlining the broader picture, Sam Balsara, Chairman, Madison Communications said the Indian advertising industry had grown ``almost at par with our forecast of 16.8 per cent. In terms of absolute numbers, the advertising industry increased by Rs 5,200 crore and touched Rs 37,100 crore in 2014.''
Interestingly, while Indian advertising spend is expected to grow by nearly 10 per cent, global adspend is expected to increase by just 4.8 per cent in 2015, according to Warc's International Ad Forecast. Except for India and the UK, the forecast for most countries has been downgraded by Warc. It has predicted that the biggest increases in adspend in 2015 would come from India at 15.1 per cent, and China at 10.5 per cent.
Several other advertising and marketing majors have also pointed out to the growth story playing out in the Indian ad market. Zenithoptimedia has forecast that global adspend is expected to grow by 5 per cent this year, and 6 per cent in 2016. Advertising spend in India on the other hand, is expected to grow by 12 per cent, Zenithoptimedia has forecast.
New targets
The Pitch Madison Advertising Outlook report was released late on Friday evening in the midst of advertising, corporate and marketing luminaries. Sam Balsara noted that 2015 promises to be yet another exciting year for the Indian advertising market, though it would be characterised by some uncertainty in the area of media deliveries.
He added that part of the heady growth of last year could be attributed to the General elections and five state elections, as well as the high ad spends by electronic commerce players.
``There were two main categories that fuelled the overall growth in 2014. While elections contributed as much as Rs 2,300 crore, emerging e-commerce players too advertised heavily in 2014, contributing as much as Rs 1,150 crore,'' he told the audience.
Almost half the growth in 2014 came from elections alone, he said, with the two categories together accounting for 2/3rd of the growth.
Of the 16.4 per cent growth rate registered in 2014, nearly 7.2 per cent was on account of elections alone, while 3.6 per cent was on account of e-commerce. Existing categories contributed to only 5.6 per cent of the overall growth.
Balsara added that whilst the growth in 2014 was ``fantastic, mainly because of election spends, we are equally bullish for 2015 too, but our forecast has to recognise that 2015 is not an election year.''
At 9.6 per cent growth rate, India's forecast in 2015, the overall market is expected to grow by more than Rs 3,500+ crore, aiding a ``spectacular growth of 27.5 per cent over two years,'' Balsara added.
Noting that a stable government at the Centre ``that is focusing on growth of the Indian economy, positive market sentiment, upbeat consumer confidence and India once again attracting global attention,'' were the many reasons why the agency had decided to double its growth forecast to 9.6 per cent from the earlier years, as compared to the like-to-like growth of 5.6 per cent.
Government spend
Releasing the Outlook report in Mumbai, Piyush Goyal, Minister of State for Power, Coal and New and Renewable Energy, maintained that his government believed in the importance of communication.
``It plays a critical role in the success of various innovative schemes of the government. We are committed to improving the standard of living and quality of life of Indians. Communication through traditional and social media helps us in our outreach programmes for greater peoples' participation,'' he told the gathering.
Acknowledging the role played by the media and the advertising sector in helping the BJP communicate its message to the people of India, Goyal added that media and advertising had helped them immensely and was a major criteria in helping the government win the Lok Sabha elections.
He hoped the advertising sector would continue to play a constructive and positive role in helping the government communicate its ideas and schemes to the people.