India is among the four emerging markets that have been forecast to report booming growth in advertising spend, supplying 27 per cent of world ad growth this year. The buoyant ad marketing in emerging economies will raise global adspend forecast for 2005 to $406 billion, a rise of 5.2 per cent over 2004, leading global media agency Zenith Optimedia has said.
This is an upgrade of its mid-year forecast of 4.7 per cent. Zenith began the year with a 5.4 per cent growth view from the year-ago figure. The 5.2 per cent now converts to 1.3 per cent in real terms after inflation, down from 1.9 per cent in the midyear forecast. Global advertising continues to grow at the same rate as the global economy despite lower consumer demand growth this year and in prospect.
The adspend in India is expected to be Rs 167.8 billion in 2005 a growth of 21.9 per cent over the 2004 figures of Rs 137.7 billion. The year-on-year growth is expected to be 12 per cent in 2005 and 11 per cent in 2007. The growth in 2004 over 2003 had been 23.3 per cent.
Newspapers, however, will continue to hold the largest share of advertising expenditure with 52.5 per cent in 2005. Newspapers' share was 50 per cent in 2004. This is expected to rise to 54.8 per cent in 2006 but dip slightly to 53.8 per cent in 2007. The Internet is expected to remain stagnant in terms of percentage market share with 0.3 per cent. Magazines are expected to see a marginal rise in percentage share year-on-year, while television's share will dip marginally from 35.6 per cent in 2004 to 33 per cent in 2005 to 31.7 per cent in 2006.
The highest growth, surprisingly, will be seen in the magazines segment 44.8 per cent. The newspaper sector adspend will grow 27.8 per cent, with television (13.1 per cent) and Internet (12.5 per cent) coming next. Cinema will see a whopping 35.8 per cent growth in adspend.
India would be the fifth largest contributor to global adspend with $667 million. The countries ahead of India in the top bracket are the United States ($5,888 million), Brazil ($1,926 million), China ($1,458 million), and Russia ($1,223 million), Zenith said in its quarterly "Advertising Expenditure Forecasts".
Along with growth from the so-called BRIC countries Brazil, Russia, India and China advertising in Saudi Arabia and the pan-Arabic market is also expected to rise, contributing $656 million to global adspend, almost the same amount as India. Indonesia comes next with $628 million.
This year, the fastest-growing region is Latin America, with adspend forecast to increase by 19.3 per cent. It is followed by Africa, the Middle East and rest of the world, up by 17.1 per cent, and then by Asia Pacific, which is forecast to report growth of 5.5 per cent. Europe and the US lag behind the global growth rate with 3.1 per cent and 3.6 pef cent respectively. Adspend outlook remained positive despite economic uncertainties, Zenith said, and forecast 6.2 per cent growth in 2006 and 6.1 per cent in 2007.
ZenithOptimedia said that as well as the growth of advertising in emerging markets, the rise of the Internet as an advertising medium was also pushing up growth. It is predicting that by 2007, the Internet will account for 5 per cent of all global adspend.
