E-comm, FMCG to buoy TV ad revenues in India to 12.3% in 2016: Carat

Carat has published its first forecast for worldwide advertising expenditure in 2017, combined with its latest forecasts for 2016 and actual figures for 2015, showing positive global outlook led by the continued investment in digital media spending.

Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat’s latest global forecasts highlights that advertising spend will reach $538 billion in 2016, accounting for a +4.5 per cent year-on-year increase. Fuelled by high-interest media events taking place during the year – including the US presidential elections, Rio 2016 Olympics and Paralympics and the UEFA EURO 2016 championship – the positive outlook for 2016 is predicted to continue into 2017, with Carat’s forecast highlighting a consistently strong year-on-year global advertising growth of +4.5 per cent.

Carat’s latest forecasts reconfirm the rise of digital as the established driver of global advertising spend growth. Powered by the upsurge of Mobile (+37.9 per cent), Online Video (+34.7 per cent) and Social Media (+29.8 per cent) in 2016, the strength of digital is expected to continue to grow at double digit prediction levels of +15.0 per cent this year, and a further +13.6 per cent in 2017. Overall, Carat predicts the upsurge of digital to account for 27.0 per cent of advertising spends in 2016 and extend significantly to 29.3 per cent in 2017, reaching $161 billion globally.

In 2015 all regions reported positive growth, from Western Europe at +2.8 per cent, +4.3 per cent in North America, +3.6 per cent in Asia Pacific and Latin America at +11.0 per cent. Regional confidence is predicted to continue in most regions in 2016, despite volatility in some individual markets. In 2016, the North American advertising market remains strong with a solid growth of +4.6 per cent, with the upcoming presidential elections solely expected to generate $6 billion advertising spend in the US. Western Europe’s sustained positive recovery driven by solid growth in the UK and Spain in 2015 is expected to continue in 2016 and 2017 at +3.1 per cent. Despite a decline in global growth forecasts due to China and Brazil’s economic volatility, Asia Pacific and Latin America advertising markets remain strong in 2016, achieving +4.4 per cent and +10.5 per cent year-on-year growth, respectively. Carat also reports an encouraging outlook for 2017 across all regions, including Central & Eastern Europe, as Russia’s economy is expected to stabilise from 2016.

In Asia Pacific, the Indian advertising market continues to be buoyant as growth prospects in the country remain high at +12.0 per cent in 2016 and +13.9 per cent in 2017.

Unlike growth in the other BRIC markets – Brazil, Russia and China – advertising expenditure in India continues to accelerate. Following a buoyant year in 2015 with a growth of +11.0 per cent, 2016 has begun on a positive note with a forecast growth rate of +12.0 per cent. Growth will be supported by the India T20 Cricket World Cup and the state elections. Media-related statistics for India include:

TV advertising revenues are forecast to grow by +12.3 per cent in 2016, supported by strong spending from e-commerce companies and FMCG brands.

While TV is expected to remain dominant for many years to come, advertisers are increasingly utilising Online Video as an invaluable complement. However, share of total digital advertising spend in India is still relatively low at 8.9 per cent (2016).

Unlike in other markets, positive newspaper advertising spend growth is expected to continue in India at +10.5 per cent in 2016, primarily due to investment from e-commerce, automotive and a small contribution from Government spending. Retail advertisers also continue to spend on print.

Carat’s first forecasts for 2017 predict continuing strong growth for the advertising market in India with an estimated increase of +13.9 per cent and expected favourable economic conditions in which advertisers vie for consumers’ attention.

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