2010 will mark the return to growth for advertising: Magna forecast

By afaqs! news bureau , afaqs!, Mumbai | In Media | December 11, 2009
According to the study, global ad revenues dropped by 16 per cent this year

According to the global advertising forecast by Magna, part of the Interpublic Group, 2010 may just be the 'back on track' year for most markets globally. Brazil, Russia, India and China are the countries which will lead the growth. India is expected to clock Rs 20,527 crore as advertising revenues in 2010.

India is poised to grow at a CAGR (compounded annual growth rate) of 16 per cent over the next five years. China is expected to grow the most, at 18 per cent CAGR, followed by Romania at 17 per cent. The bigger economies such as the US and the UK are expected to witness growths of merely 2 and 4 per cent, respectively. Russia, Indonesia, Argentina and Malaysia are expected to grow at 12 per cent CAGR.

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Premjeet Sodhi, chief planning officer, Lintas Media Group says that the erstwhile larger advertising economies are expected have very marginal rates of growth of media over the next five years. "They will be forced to partner with economies such as India, which are auguring double digit growth rates," he adds.

Television will dominate the share of global media spends, attracting 42 per cent of overall spends in the coming year, followed by newspapers, which are expected to attract 40 per cent. Over the next five years, the maximum growth in spends will be witnessed by search marketing at 21 per cent.

In India, both television and newspapers are expected to grow at 14 per cent CAGR during 2010-15. About the growth of the TV medium, Sodhi says, "With the introduction of new technologies such as DTH and IPTV, along with the continued innovation in programming, TV is set to keep the consumers engaged. Hence, TV will continue to be an important advertising medium."

Magazines are expected to grow by 11 per cent each year over the next five years, while radio and outdoor advertising will grow at 17 per cent in that time period. Total online advertising is poised to grow at 20.5 per cent during 2010-15. The Internet will account for 4 per cent of the spends as it emerges as the most cost-effective medium, especially to reach the younger and affluent population.

"Besides penetration on the Internet, the inclination of brands to move beyond passive awareness building to building engagement with the consumers is creating many more opportunities for the usage of the Internet in media plans," Sodhi states. By 2015, Internet penetration is expected to grow to 21 per cent from the current 11 per cent.

With the benefit of national presence and localisation, radio will garner a significant share of media revenues as well. It is expected to account for 5 per cent of the overall advertising in India by 2015.