Advertising spend to see 12.5% growth in 2018, says Magna

Mumbai: Media intelligence arm of IPG Mediabrands, Magna, said advertising spending would grow 12.5 per cent in 2018, as against the earlier forecast of 12.1 per cent.

Magna joins other media agencies such as Zenith from the Publicis Groupe, which said last week India would be the third-largest contributor to global ad spend growth in the next two years, as the economy puts disruptions such as demonetisation and a new tax regime behind it.

Hema Malik, managing director at Magna's says at 12.5 per cent, India is already the fastest growing nation, among the top 20 ad markets in the world. It will get even better (in terms of growth rate) in the future. Magna says India's overall advertising market will touch Rs 680 billion by the end of 2018, from Rs 600 billion last year. On the back of a good monsoon and higher minimum support price for crops, improving income and therefore consumption in rural areas. This is expected to push companies in consumer goods, retail, automobile, telecom and banking & financial services to spend more in rural markets. Firms are also expected to use different marketing and distribution tactics in these areas, raising promotional budgets as a result.

Among the categories driving advertising growth in 2018 will be digital at 27 per cent per annum, followed by television at 12.2 per cent per annum and radio advertising at 11 per cent per annum, Magna says. Print, while growing 6.1 per cent in 2018, will increasingly fight into digital for more ad budgets. "India is one of the few markets in the world where not only has print shown positive growth but a robust one at 6.1 per cent based, on many factors. We feel print will be relevant in India for a long time, not only because of formats, but also due to credibility attached to it in an era of fake news," said Shashi Sinha, chief executive officer, IPG Mediabrands India.

India’s ad growth rate in 2019 is expected to accelerate even more than the 12.5 per cent this year. Led by a stronger economy, better digital access, general election and the cricket world cup. Along with the annual IPL, the first half of next year is expected to be a strong one for advertisers, Magna said, with the world cup and IPL following each other in quick succession.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.