India, 5 other nations to drive ad spends in 2018

Amazon India is second-biggest advertiser after Hindustan Unilever: GroupM

A bunch of countries will drive 68 per cent of incremental advertising expenditure in calendar year 2018, the world’s largest media agency GroupM said on Monday, with India being one of them. The others include the US, China, Argentina, Japan and the UK, all of which will help push up overall advertising growth in the world to 4.3 per cent in 2018 versus 3.1 per cent this year.

The report, which highlights the trends for the new year, said India was looking past recent reform disruptions such as demonetisation and the goods and services tax (GST), supporting growth in an array of sectors from finance to durables, retail, services and consumer goods.

It also said that increasing urbanisation and rising wages in India would aid overall growth, pushing up advertising by companies.

The agency’s 2018 forecast acquires significance since the Indian economy is slowly but steadily clawing its way back in terms of rate of growth. The July-September 2017 period, for instance, saw India’s gross domestic product (GDP) bounce back to 6.3 per cent in terms of growth rate after a five-quarter decline.  

Chief executives of companies across sectors are already saying that they see India’s GDP growth for the 2017-18 financial year in the region of 6.5 per cent to 7 per cent. This could be higher in the 2018-19 financial year.

From an advertising point of view, a growing economy augurs well for businesses since they will be spurred to invest more behind their brands. Rival agencies such as Dentsu Aegis Network have forecast a 12.2 per cent advertising growth for India in 2018, according to an estimate released earlier, while Publicis-Groupe agency Zenith on Sunday said it saw India’s advertising growth at 8.4 per cent in 2018. 

GroupM said in its latest forecast that India was seeing the emergence of new channels of communication, with shopper marketing, for instance, gaining traction. The report also said that Amazon was now India’s second-biggest advertiser (after Hindustan Unilever) as it fought a high-profile battle for leadership with domestic rival Flipkart in e-commerce.

To highlight just how stiff this battle is: During the crucial Dussehra-Diwali period this year when e-tailers went all out to woo consumers to buy online, Amazon ran two times more television ads than rival Flipkart, data from television audience measurement firm BARC India said.

Amazon also advertised three times more than Flipkart in the first three quarters of calendar year 2017 to ensure top-of-mind recall, BARC data showed. The company is also investing heavily behind its Amazon Prime loyalty programme, backing its Prime Video service in particular, as it looks to entice consumers to its platform.

The company is also making investments in the offline retail space, buying 5 per cent stake in Shoppers Stop and acquiring publishing house Westland Books from the Tata group.