India ad spend to grow 9% in 2013: Warc

MUMBAI: Advertising spends in India are expected to grow 9 per cent in 2013, according to the International Ad Spends 2012 report released by advertising data research service Warc.

The report says that global ad spends will grow at 4 per cent in 2013, which is a downgrade of 1.5 per cent from the previous prediction released in June. The forecast for 2012 has been downgraded by 0.5 per cent to 4.3 per cent. Taking into account forecast inflation, the report predicts that global ad spend will rise by just 1.8 per cent and 1.6 per cent this year and next. The reduction in the forecast has been attributed largely to a shaky global economy.

The report is based on Nielsen figures for global ad spend in 2011 which is $498 billion. Applying Warc‘s growth estimates to this base sum, 2012‘s ad spend is expected to be around $519 billion and 2013‘s to be nearly $540 billion. The study took into account ad spends in 12 major markets across the globe (US, UK, Australia, Russia, India, Japan, China, Brazil, Canada, France, Germany and Italy).

The BRIC (Brazil, Russia, India and China) countries are expected to lead the race for ad spends growth in 2013 with Russia growing at 14.6 per cent, China at 12.5 per cent, Brazil at 9.5 per cent and India at nine per cent.

Australia, China, India and Japan are in Asia-Pacific. For these markets, Warc expects China to lead in 2013 with growth of 12.5 per cent, followed by India with 9 per cent. Ad spend in Australia is seen growing 2.6 per cent and Japan just 1 per cent in 2013.

The US which was predicted to garner ad revenue to the tune of $153 billion in 2012, is expected to expand at 2.5 per cent next year (as opposed to predicted growth of 4.1 per cent this year). The main drivers for this year‘s ad growth were the US Presidential Elections and the Olympics, the absence of which next year will hit ad revenues hard. UK shares a similar fate with predicted ad spend growth at four per cent.

In another study conducted by Warc which researched inflation in cost of television media, it reported that India is pegged to see media inflation (in television) at seven per cent.

According to Vivaki Exchange CEO Mona Jain, "The critical inflation is coming in the general entertainment channels wherein there could be increased demand. Also, there is fragmentation in television. You have more no. Of channels and the channels are expanding their programming time slot, genres, there are more viewing options now hence it is influencing the price hike. However, the inflation is curbed because of the low market sentiments otherwise it could have been 10-11 per cent. The brands which spend premium have been more conservative."

MPG India MD Mohit Joshi said that Havas anticipates inflation of 10 per cent. "Inflation is largely a result of fragmentation (around 7 per cent) and the balance due to actual price inflation," he added.

The report shows that looking to 2013, television and online were expected to yield double-digit increases in China, India and Russia.

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