At 9%, advertising spend growth below expectation
Mumbai: Advertising spends in India grew by just 9 per cent to Rs 82,795 crore last year, mainly due to economic slowdown, according to a report on Wednesday.
However, the growth will accelerate to 10.7 per cent in 2020 to Rs 91,641 crore, media buying major Group M said.
In 2019, the spend grew by 9 per cent as against the forecast of 12 per cent largely due to the slowdown in economic growth, which is set to reach a decadal low of 5 per cent for the financial year ending March 2020, it said.
Consumption growth is set to return in the world's second fastest growing economy, and the digital media spend will be dominating the industry, the agency, part of advertising major WPP, said.
The estimates come months after reports of a decline in consumption in India, a first in four decades. The government has denied the report.
Advertising will grow at a moderate single-digit pace in the first half of the fiscal (2020-21), and rise to double digits in the second half on lower base, positive impact of government initiatives and the assumption of good rains, its president Sidharth Parashar told reporters.
At Rs 22,057 crore, the share of digital advertising spends grew to 27 per cent in 2019 and went past print media's 22 per cent share with spends of Rs 18,164 crore.
Digital is expected to grow to Rs 27,803 crore or and occupy 30 per cent of the overall spends in 2020, Parashar said, adding that Indian print has been able to duck global trends of a cut down to remain flat.
Television will continue to hold on to its market share with spend of Rs 38,081 crore, the agency said, adding that events like T-20 cricket world cup will help the category.
India will overtake Canada to be the eighth biggest advertising market in the world, it said, adding that from an incremental spends perspective, it is the third largest behind the US and UK.
Segments that are expected to aid advertising spends in 2020 include auto, which is expected to see a revival and also opportunities around introduction of the BS-VI norms, e-commerce, mobile handsets and fast moving consumer goods.
From a broader trends perspective, the agency expects brands to lead in creating sub-cultures rather than merely tapping trends in the new decade.
It also flagged worries on a trend of consumers unwilling to believe in brands in the post-truth era, and added that ways of delivering content will get more immersive with technologies like virtual reality. There will also be a greater stress on vernacular or regional languages going forward, it said.