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TV’s 10% growth will add to AdEx growth in 2015 in India, predicts ZenithOptimedia

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MUMBAI: The year 2014 saw the biggest Lok Sabha elections held in the country with Bharatiya Janta Party winning with a majority giving people a hope of ‘aache din’.



It has been just over six months of the newly elected government led by Prime Minister Narendra Modi and it seems to have captured the collective consciousness of the country. And as the year comes to an end, ZenithOptimedia’s Advertising Expenditure Forecasts says that falling food prices as well as oil prices have contributed to a reduction in the Consumer Price Inflation to a historic low of 5.52 per cent in October. IMF and World Bank have forecast an identical 6.4 per cent growth in 2015, up from 5.6 per cent in 2014. The stock market index has crossed 28000, up from 20000 in November 2013.



Hence, we enter 2015 with a strongly positive consumer and business sentiment, albeit recognising that consistent on-ground delivery and reforms will be needed to keep this sentiment up. Hence, cautious optimism, though with way more optimism than same time last year, is still the right expression.



The agency expects consumption to continue picking up, with passenger car and utility vehicle sales turning positive, credit card spending on the rise, loans for durables growing. From an ad-expenditure point of view, FMCGs will continue their dominance but given the weak monsoons, some categories might stay flat or have slow growth. High growth is expected from telecom, e-commerce, mobile phones, cars and two wheelers, retail, realty and the BFSI sector. 2015 will also be the year of ICC Cricket World Cup, which will also be a trigger to growth in ad expenditure.



And with the new TV measurement system scheduled to launch in 2015, as is the much-awaited phase III expansion of FM Radio. Regional media, across print, TV and all other media continues to drive growth in media consumption. With internet base increasing to 250 million, smartphone ownership expected to reach 200 million by 2014 end, and the country awaiting the launch of 4G services by telecom operators, online and mobile will continue to see the maximum growth rate. Digital advertising however, has become dearer as the government decided to re-impose service tax.



Given these factors ZenithOptimedia expects the ad-ex to grow by 12 per cent to Rs 40,307 crore, at an overall level in 2015, as against 10.7 per cent in 2014 (over 2013). This growth will be primarily fuelled by print at 12 per cent, TV at 10 per cent and online and mobile at 25 per cent. Other media are expected to grow between 5 – 10 per cent.



Global forecast



The year 2014 continued the trend of seeing the rise of mobile advertising and social media, and the transition to programmatic buying of digital display, will help the global advertising market grow 5-6 per cent a year over the next three years.



According to ZenithOptimedia, global ad spend will grow 4.9 per cent to reach $545 billion in 2015. The global economy is expected to improve (the IMF predicts 3.8 per cent global GDP growth in 2015, up from 3.3 per cent in 2014), but advertising faces a tough year-on-year comparison after the Winter Olympics, World Cup and US mid-term elections in 2014. Ad spend growth will therefore be slightly below 2014’s 5.1 per cent.



2016 will be a quadrennial year – with the Summer Olympics, US Presidential elections and the UEFA European Football Championship – and we expect these events to propel ad spend to 5.6 per cent growth that year, before it slips back to 5.2 ad spend in 2017 in their absence.

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