India at No. 4 in contributors to global adspend growth in 2017-20: Zenith
Zenith has predicted that global ad expenditure will grow 4.1 per cent in 2018, reaching US$578 billion by the end of the year in its annual Advertising Expenditure Forecast. This forecast is fractionally below the 4.2 per cent rate Zenith had predicted for 2018 in September, with marginal downgrades in North America, Western Europe and Asia Pacific, and upgrades in Latin America and Central & Eastern Europe.
The agency expects advertising expenditure to grow more slowly that the global economy as a whole out to 2020.
According to the forecast India is placed No. 4 in the Top Ten contributors to global adspend growth 2017-2020. India follows the US, China and Indonesia in that order.
Between 2017 and 2020, Zenith forecasts global advertising expenditure to increase by US$72 billion in total. The US will contribute 27 per cent of this extra ad expenditure, while China will contribute 20 per cent, followed by Indonesia, India, the UK and Japan, which will contribute 4 per cent each.
Five of the ten largest contributors will be the Rising Markets (China, Indonesia, India, Brazil and Russia), and between them they will contribute 33 per cent of new adspend over the next three years. Overall, the Rising Markets are expected to contribute 54 per cent of additional ad expenditure between 2017 and 2020, and to increase their share of the global market from 37 per cent to 39 per cent.
The world’s top ten advertising markets by size will remain stable between 2017 and 2020, with only one change in the ranking when Indonesia replaces Canada in tenth place in 2019.
Forecast for India
The year 2017 will close at Rs 53,918 crore, registering a slightly slower pace of growth is on account of demonetisation introduced in November 2016. Total adex for India will climb up to Rs 58,422 crore, growing at 8.4 per cent in 2018, led by television.
In India, internet adspend is expected to capture 11.6 per cent of the market in 2017. As per Zenith’s forecast, internet advertising in India is slated to grow 20.4 per cent in 2018, compared to 8.4 per cent growth for the market as a whole. By 2020, internet will account for 15.4 per cent of total adspend in India.
Growth rate for television is pegged at 9 per cent, while newspapers will grow at 5 per cent. Radio will grow at 10 per cent, while cinema and out of home will grow at 5 per cent, respectively.
Tanmay Mohanty, Group CEO, Zenith India, commented, “Growing Internet penetration accelerated by operators such as Jio will significantly enhance digital adspends in India and give access to previously untapped markets. India has seen some fluidity in overall ad-expenditure but remains one of the fastest growing advertising markets globally. With the dust settling down on demonetisation and GST, we expect a measured recovery on ad spends. Consumer confidence is definitely on the rise. In 2018, Mobile Handsets, FMCG, Automobiles, BFSI, Travel & Tourism and Political ads will drive up the pace on adspends.”
Big countries are adding most ad dollars
In dollar terms, most of the growth in global adspend is coming from a few big markets. We forecast that just two countries – the US and China – will contribute 47 per cent of new ad dollars between 2017 and 2020. The five biggest markets – the US, China, Japan, the UK and Germany – will contribute 57 per cent.
Big cities are driving global adspend growth
Big cities are driving global adspend by concentrating growth in productivity, innovation and trade. Zenith has conducted a unique study that attributes adspend to individual cities by estimating the value of their inhabitants to local, national and international advertisers. The agency forecasts that the top 10 cities alone will contribute 12 per cent of all global adspend growth this year, and that the top 725 will contribute 60 per cent.
Zenith predicts that between 2016 and 2019, adspend in the 10 biggest-contributing cities will grow by a total of US$7.5 billion, representing 11 per cent of growth over these years. These ten cities will be, in descending order: New York (where adspend will grow by US$1.4 billion), Tokyo, Jakarta, Los Angeles, Shanghai, Houston, Dallas, Beijing, London and Chicago (which will grow by US$0.6 billion).