Global advertising expenditure is set to grow 4.5 per cent in 2018, reaching $581 billion by the end of the year. Between 2018 and 2021, global ad expenditure is set to increase by $75 billion, with the US contributing 29 per cent of this extra ad expenditure, and China contributing 19 per cent, followed by India at 6 per cent, and Indonesia at 4 per cent, according to the Zenith Global Advertising Expenditure Forecast.
The agency has predicted that the world’s top seven advertising markets by size will remain stable between 2018 and 2021. In 2021, however, India will enter the top ten in eighth place, moving France and Australia down one place each and pushing Indonesia out of the top ten, according to the forecast.
Zenith forecasts that ad spends for India in 2018 will close at Rs 62, 699 crore. Total advertising expenditure (adex) for India will see an increase of 15 per cent and climb up to Rs 72,169 crore in 2019.
By 2020, ad spends would be close to Rs 81,006 crore and would hover around Rs 91,742 crore by 2021, according to the forecast.
The agency has noted that young advertising markets like India are playing an ever-more-important role in driving global growth in adspend, predicting that India has huge potential for further growth, with advertising taking up just 0.3 per cent of the GDP, less than half the Asia Pacific average of 0.7 per cent.
India remains one of the fastest growing economies, with strong GDP growth of over 7 per cent, led by reforms in sectors such as retail, infrastructure, manufacturing and services, says the forecast, adding that Indian consumer confidence also continues to remain relatively high.
Given that a significant part of the population is below 30 years of age, there is likely to be continued consumption-led growth with less reliance on export-led momentum, the agency points out, which should give a boost to businesses across the board, ad investments and government initiatives.
Tanmay Mohanty, Group CEO at Zenith, said many parts of India were experiencing digital transformation, led by mobile, which would accelerate categories such as banking, financial services, healthcare, entertainment and sports, travel and lifestyle.
"General elections next year and state elections are expected to boost marketing spends. Additionally, the Cricket World Cup and the Indian Premier League will also drive growth," Mohanty said.
Pointing out that digital would continue to accelerate both in reach and consumption, the CEO said television is expected to be on an upward curve. "Print will thrive on regionalisation. The expectation for radio is that it will digitise aggressively in response to streaming services, while both cinema and out-of-home will innovate and increase reach-led investments," he said.
Global picture
The US is expected to be the leading contributor of new ad dollars to the global market over the next three years, making up in scale what it lacks in speed, according to the forecast. China will come second, combining large scale and rapid growth, though its growth is slowing as its scale increases, adds the forecast.
Six of the ten largest contributors will be the rising markets of China, India, Indonesia, Brazil, South Korea and Russia, notes the forecast, and between them they will contribute 37 per cent of new adspend over the next three years. Overall, Zenith forecasts the rising markets to contribute 54 per cent of additional ad expenditure between 2018 and 2021, and to increase their share of the global market from 38 per cent to 40 per cent.
The agency report personal and targeted communication is driving ad growth, with $100 billion potential for global e-commerce advertising.
While online video and paid search are driving the growth in global adspend, with advertisers focussing on personalised and targeted communications they are able to increase both the efficiency and effectiveness of their ad campaigns, notes the forecast.
The steady growth in global adspend is expected to continue. Global advertising expenditure is forecast to grow 4.5 per cent by the end of this year, boosted by the Winter Olympics, FIFA World Cup and US mid-term elections, according to the Zenith Global Advertising Expenditure Forecast.