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India’s share in the global advertising market is likely to see little change in 2015 despite nearly 10-12 per cent growth projected for the year by media agency groups such as Madison and GroupM.
According to Madison World, India’s share in global advertising for 2013 and 2014 remained in the 1.4 to 1.5 per cent bracket. This was despite cumulative growth over 2013 and 2014 touching 27.5 per cent. The Indian ad industry, for the record, grew at the rate of 11.1 per cent in 2013. The 27.5 per cent figure has been calculated after adding growth rates of 2013 and 2014.
Given that India’s overall share in global advertising has remained small, estimates are that the figure is unlikely to dramatically change in 2015. A key reason for this is the likely moderation of India's advertising growth rate for 2015, which Madison says will be 9.6 per cent as opposed to 16.4 per cent seen last year. “India’s share in global advertising stood at $6 billion in 2014 out of a total of $411 billion. While the global advertising market grew at 5.3 per cent in 2014, India’s was much more at 16.4 per cent, the latter's share in global advertising is far from respectable,” Sam Balsara, chairman & managing director, Madison World, said.
India retained its twelfth spot in the global advertising market for 2014, with neighbouring country China marching ahead from number three to number two in the same time. “China's share in global advertising stood at 13.7 per cent in 2014 from 10.3 per cent in 2013. China effectively pipped Japan to the post for the second spot after the US thanks to this growth in share,” Balsara said when releasing his agency’s outlook on 20 February.
US continues to be the largest advertising market in the world with a share of 42.5 per cent in 2014 versus a 41.3 per cent share in 2013. “Clearly, the US has consolidated its position as the largest advertising market followed by China and then Japan,” Balsara said.
Japan's share in the global advertising market shrunk to 9.3 per cent in 2014 versus 12.8 per cent in 2013. The Brazilian market out of the top six has also shrunk, albeit marginally, from 4.7 per cent in 2013 to 4.5 per cent in 2014, according to Madison. The markets that gained share in the top six besides the US and China included the UK and Germany, Balsara said. “UK’s share grew to 7.2 per cent in 2014 versus 6.5 per cent in 2013. Germany, on the other hand, grew marginally from 6.1 per cent to 6.3 per cent,” Balsara said.
Why is India’s global share not rising?
Experts point to India's abysmal share of its advertising expenditure to its gross domestic product. (GDP) It is under one per cent, implying that not every advertiser or company is putting enough might behind promoting its products and services. “While geo-targeting of ads will help small advertisers at the local and regional levels to promote their brands, traditional categories and spenders have been cutting back on advertising,” Balsara says.
In 2014, for instance, existing categories (such as fast moving consumer goods, retail, telecom, auto, real estate etc) contributed to 5.6 per cent of the 16.4 per cent growth seen, Balsara said. “While elections and e-commerce contributed 7.2 per cent and 3.6 per cent respectively,” he added.
Though elections in three states this year and e-commerce advertising will contribute to India's overall ad kitty, pegged at Rs 40,658 crore, the big highlights will be the on-going Cricket World Cup, which will contribute just under Rs 1,000 crore in advertising revenues, launch of new TV channels, increased government spending in print and launch of the third phase of radio expansion in India.
