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Last Updated: August 09, 2016
Chief Executive Officer WPP
Last Updated: August, 2016
The Indian advertising industry has evolved from being a small-scaled business to a full-fledged industry. The advertising industry is projected to be the second fastest growing advertising market in Asia after China.
It is estimated that by 2018, the share of ad spend in India’s Gross Domestic Product (GDP) will be around 0.45 per cent.
The Indian government has given tremendous support to the advertising and marketing industry. Advertising expenditure is likely to increase in the financial sector, driven by Reserve Bank of India (RBI) policies which could result in a more favourable business environment. Also, proposed licences for new banks and better market sentiments render the advertising and marketing industry in India a fertile space.
India’s Advertising industry is expected to grow at a rate of 16.8 per cent year-on-year to Rs 51,365 crore (US$ 7.61 billion) in 2016#, buoyed by positive industry sentiment and a strong GDP growth of 7 per cent and above.
India's digital advertising market has grown at a fast pace of 33 per cent annually between 2010 and 2015##, while the spend as a percentage of total advertising increased to 13 per cent or nearly US$ 1 billion in 2015.
Print contributes a significant portion to the total advertising revenue, accounting for almost 41.2 per cent, whereas TV contributes 38.2 per cent, and digital contributes 11 per cent of the total revenue. Outdoor, Radio and Cinema make up the balance 10%.
The online advertising market in India is expected to touch Rs 3,575 crore (US$ 530 million) in 2015 from Rs 2,750 crore (US$ 407.66 million) in 2014. Of the current Rs 2,750 crore (US$ 407.66 million) digital advertisement market, search and display contribute the most - search advertisements constitute 38 per cent of total advertisement spends followed by display advertisement at 29 per cent, as per the study.
The Internet's share in total advertising revenue is anticipated to grow twofold from eight per cent in 2013 to 16 per cent in 2018. Online advertising, which was estimated at Rs 2,900 crore (US$ 429.9 million) in 2013, could jump threefold to Rs 10,000 crore (US$ 1.48 billion) in five years, increasing at a compound annual rate of 28 per cent.
It is interesting to note that Indians paid Rs 25,200 crore (US$ 3.74 billion) to access the Internet in 2013, a figure greater than the Rs 22,300 crore (US$ 3.3 billion) that print medium garnered in subscription and advertising.
The Governments of India and Canada have signed an audio-visual co-production deal which facilitates producers from both countries to harness their collective artistic, technical, financial and marketing resources, and encourage exchange of culture and art between the two countries. The agreement is also likely to lead to better promotion of Indian locales for shooting films. "The agreement will also lead to the transparent funding of film production and boost export of Indian films into the Canadian market," as per the agreement.
India and Poland are seeking to enhance cooperation in the digitisation and restoration of film archives. This was decided in a meeting between Mr Bimal Julka, Secretary of Information and Broadcasting, India, and a delegation from Poland led by Ms Malgorzata Omilanowska, Secretary of State. The two countries will form a joint working group that will help improve cooperation in fields such as student exchange programmes, animation, films and digitisation, among others. Mr Rajyavardhan Singh Rathore, Minister of State for Information & Broadcasting, has announced that Indian government has planned to increase advertising spend on the digital platform which will help increases the government’s presence in digital media.
The advertising and marketing sector in India is expected to enjoy a good run. E-commerce companies are expected to dominate marketing trends in 2015. Growth is expected in retail advertisement, on the back of factors such as several players entering the food and beverages segment, e-commerce gaining more popularity in the country, and domestic companies testing out the waters. The rural region is a potentially profitable target. For instance, in the automobiles sector, the focus of two-wheelers on rural areas could mean more launches and more advertising spends. The telecom sector could see growth as well, driven by better smartphone penetration and service providers cutting down on prices.
Exchange Rate Used: INR 1 = US$ 0.0148 as on July 11, 2016
References: Media Reports, Press Releases, McKinsey Report
Note: #- Pitch Madison Advertising Report 2016, ## - According to a report by Morgan Stanley
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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