MUMBAI: WPP's media investment group Group M has forecast the advertising expenditure (adex) in India to grow by 13 per cent in 2018 year on year. According to GroupM’s futures report ‘This Year, Next Year’ (TYNY) 2018, which was released today, India’s advertising investment will reach an expected Rs 69,346 crore this year. The report also estimated ad spending in 2017 as Rs 61,263 crores, growing at 10 per cent, as predicted by GroupM in February of last year.

Various industry estimates peg economic growth at 7.3 per cent to 7.8 per cent for 2018 as the benefits of GST-higher productivity and lower cost of goods sold-become apparent. This, combined with key reforms already implemented, such as bank recapitalisation, budget provisioning of non-performing assets and the Bankruptcy Bill approved by law, are likely to facilitate a recovery in consumer demand and private investment.

GroupM South Asia CEO and WPP India country manager CVL Srinivas said, “As consumer sentiment stabilises and spending increases, we estimate 2018 to be a relatively better year from an ad-spend perspective. Growth in digital media will continue to outstrip other media but, unlike most markets, India continues to see traditional media formats grow. After a couple of sluggish years, rural volumes are expected to pick up this year leading to increased marketing budgets. The structural changes witnessed in the last couple of years could pave the way for a more stable outlook in the coming years. We haven’t yet realised our full potential as an ad market but are headed in the right direction.”

Continuing urbanisation and rising wages are supporting consumer growth in finance, durables, services and retail. E-commerce is becoming a key channel for FMCG, and ad investment is anticipated to increase in shopper and performance marketing. India is witnessing an increase in spending from rural markets, as sales growth at 1.5-2.5 times of urban sales growth for major FMCG and consumer durable companies.

Looking at the advertising industry worldwide, GroupM estimates the global advertising expenditure to grow by 4.3 per cent, and APAC is anticipated to grow at 5.4 per cent. GroupM South Asia chief growth officer Lakshmi Narasimhan said, “India remains one of the fastest growing ad markets globally and is among the top-five countries that are expected to drive incremental investment in 2018. Our growth percentage is three times that of the global adex and more than double of the APAC growth percentage.”

This year, 35 per cent of all incremental ad spends will go towards digital advertising (including mobile). GroupM estimates digital adex to continue to grow by 30 per cent in 2018 to Rs 12,337 crore. Video advertising on digital is estimated to grow at 54 per cent as bandwidth improves and data and mobility device become more economical for the consumer.

As digital becomes 18 per cent of the overall advertising spends in India, measurement and transparency become paramount. Last year, GroupM globally led the conversation on measurement and transparency in digital media, and released viewability standards that are higher than those stipulated by the Media Rating Council in the US. In India, too, GroupM is working with industry bodies, brands and publishers to adhere to a standard viewability index that would become integral to the digital ecosystem.

“On the traditional media front, parliamentary elections in H1 2019 will stimulate advertising from the back half of 2018. Print will see a slight uptick in 2018 from the elections, with key markets in demand. The growth rate for newspapers is estimated at 4.2 per cent with English papers growing slightly slower than Hindi and regional languages,” the report stated.

Television continues to be the largest medium, with its contribution remaining at close to 45 per cent share. This year, the growth rate for TV is 13 per cent, as there is growth in both volume with free-to-air channels as well as value with HD channels. In 2018, the last leg of cable digitization will improve quality of delivery to rural India, also driving viewership.

This year, radio is expected to grow at 15 per cent which is higher than the last couple of years. This growth is predominantly due to the launch of new radio stations across the country. Other media such as OOH will witness good traction of 15 per cent growth from premium transit sites. Cinema will continue to grow at 20 per cent in 2018, as the infrastructure investment made last year will attract a larger audience to theatres for a blockbuster experience.