Indian ad spends to grow 10.7% in 2020, digital to garner 65% of incremental ad spends

According to a GroupM report, auto, e-commerce and mobile handsets will drive ad growth in 2020.
Indian ad spends to grow 10.7% in 2020, digital to garner 65% of incremental ad spends
Indian ad spends to grow 10.7% in 2020, digital to garner 65% of incremental ad spends

Betting big on the automobile, e-commerce and mobile handsets sectors, media investment firm GroupM estimates that ad spends in India will grow at 10.7% for the calendar year 2020.

As per the GroupM futures report ‘This Year, Next Year’ (TYNY) 2020, India will continue to top the list as the fastest-growing major ad market in the world. As per the report, India’s advertising investment is forecasted to reach an estimated Rs 91,641 crore this year.

Even with an overall slowdown in the global economy Indian media spends are expected to be between low to moderate in H1, with robust growth anticipated in H2 2020. 

The report also states that India will continue to be the third-highest contributor to incremental ad spends, behind UK and USA, while China drops to the fourth spot and the eight fastest-growing country with respect to ad spends across the globe.  

GroupM also expects to see sustained and stable investment across forms of media in the country. Digital is the second most used media vehicle and is estimated to reach 30% of ad spend in 2020 with growth coming from video, voice, vernacular-Indic and advertising on e-commerce. The growth of digital is set to soar high because of changing consumer habits. 

“While we expect sustained and stable investment across media in India, Digital will garner 65% of incremental ad spends in 2020. In 2020, India faces challenges and uncertainties across sectors just like other markets. However, this also brings opportunities for brands to innovate because of which we see an evolving media stack. This will be propelled by greater use of technology and better content across media,” Prasanth Kumar, CEO - GroupM South Asia said.

According to Sidharth Parashar, President - Investments and Pricing at GroupM India, new-age advertising and marketing is growing faster than ever with brands looking at outcome-based advertising, where it also engagement.

 “The format of print storytelling is changing but the content is still the strongest. With print media organizations undergoing transformation across India. Publication houses have invested heavily in promoting digital subscriptions and have started limiting access to digital versions of epapers. We believe that this would pave the way for newer business models. Print will continue to remain relevant to advertisers wanting to build credible brands. Television will continue to grow at a steady pace. This year, the growth rate for TV is estimated to be 7% and Radio is expected to grow at 6%. While cinema and OOH will grow at 15% and 6% respectively in 2020,” he added.

The report also states that OTT has seen a faster evolution in India, which is now complementing television. OTT hybrid models looking at both advertising and subscription will continue to be an effective model.

Ashwin Padmanabhan, President – Partnerships and Trading of GroupM India, “While there are challenges and uncertainties in the market, it is a world of abundant opportunities in the content eco-system. This gives us vibrant options to reach and engage with consumers. It necessitates us to be agile, invest in new-age talent and technology while keeping an eye on the future. The key is to be always prepared while we are shaping the media landscape.”

In terms of sectors, Sidharth says that the auto sector is set to see a growth in advertising spends, despite having faced an unprecedented slowdown in the past year.

“The auto sector saw a cyclical slowdown, which we expect will end now. Now we will see the BS-VI vehicles coming in as well. Companies such as MG and Kia have been seeing massive demand for their hybrid and electric cars. Hero, Bajaj, Tata Motors, among others also expect sales to revive. In the second half of this year, which will be pre-festive period, we expect the sector to pick up,” he says.

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