India is likely to surpass the global average of four per cent in terms of advertising growth this year, according to the latest report by media agency Carat. This forecast, released on Monday, maintains India's ad growth rate at 11 per cent for the current calendar year, even as it indicates that next year, the domestic growth rate could accelerate.
The media agency, part of Dentsu Aegies Network, says the 2016 ad growth could be 12 per cent, 0.7 per cent ahead of its forecast in March this year. Ashish Bhasin, chairman & CEO of Dentsu Aegis Network - South Asia, pins this growth on an uptick in sentiment and increased spending by companies both in the first and second halves of the year.
"Companies across categories are beginning to advertise aggressively. Some of them are even more such as e-commerce and start-ups as they look to acquire consumers and boost sales. This year also saw the Cricket World Cup in addition to the IPL (Indian Premier League) in the first half, which led to a surge in advertising. Next year, we anticipate growth rates to be even better as indicated in our forecast," says Bhasin.
Brazil, another key advertising nation, is likely to see an ad growth of six per cent this year, below the 6.6 per cent predicted earlier, while next year, it is expected to accelerate to 8.4 per cent, a similar forecast made earlier.
The Carat report also says that ad spends in online and digital will be a key contributor to growth in a number of markets, though in India, traditional media such as TV and print are expected to be key beneficiaries of the increase in spends.
While digital advertising, according to industry estimates, is pegged at 9-10 per cent of total advertising, it is projected to touch 20-22 per cent in the next five years. Advertisers are also gearing up for this shift with in-house teams in place aimed at targeting digitally savvy consumers not only with previews of ads on video platforms such as Youtube, but also content aimed at catching their attention. The idea is to engage rather than simply inform and communicate.
Categories that are taking the lead in this regard include consumer goods, banking & finance, technology, e-commerce and handsets, with some brands having completely migrated online.