Ad expenditure in India to reach Rs 30,704 crore by 2012

Global Picture

ZenithOptimedia's forecast on global advertising expenditure for 2010 and beyond suggests that good times lie ahead. The global ad market, the study predicts, has witnessed one of the worst declines in 2009, with a 10.2 per cent drop in advertising spends. The global scenario is expected to gradually revert to normalcy in three years, with the growth rate reaching 5 per cent by 2012.

Over 2010, the global ad expenditure is expected to rise by 0.9 per cent. The study also forecasts a 3.9 per cent growth in 2011 and 4.8 per cent in 2012. In some markets, the ad volumes have fallen not just because of the economic meltdown. For instance, in France, the public television channels have reduced their number of ads and plan to be completely ad-free by 2011, while in China, the government plans to reduce the number of ads beginning 2010. While this may raise the price of air time, it won't be enough to compensate for the decreased volume.

The decline in ad expenditure is expected to continue in developed markets such as North America, Japan and Western Europe, before growth is restored in 2011. Developing markets such as the Asia Pacific (except Japan) and Latin America are expected to grow speedily over 2010. Asia Pacific will see a growth rate of 8.4 per cent, while Latin America will grow at 8.1 per cent in 2010.

Indian Picture

The Indian scenario looks positive, with the growth in 2010 expected to be about 10.5 per cent. From a growth rate of 19 per cent over 2007-08, the ad expenditure grew only 4.5 per cent during 2008-09. In India, the advertising expenditure is expected to reach Rs 24,666 crore by 2010, clocking additional Rs 2334 crore spends over last year.

By 2012, ZenithOptimedia predicts that India's advertising expenditure will reach Rs 30,704 crore, growing approximately 37.5 per cent over 2009.

Newspapers will continue to attract maximum spends, with expenditure going as high as Rs 11,326 crore in 2010. Television will be the second most preferred medium for advertisers and will clock spends of Rs 10,058 crore in 2010, as per the forecast.

In 2008, 42.6 per cent share of ad spends was by newspapers, followed by 39.8 per cent by television. Outdoor medium and magazines garnered 7 per cent and 5.3 per cent shares respectively, while radio and the Internet managed to grab 3 and 1.6 per cent share of ad spends in 2008.

If one looks at the 2008-09 ad expenditure figures, the outdoor medium and magazines have witnessed the most decline in spends, while the Internet continued to grow at 25 per cent.

In 2010, according to the study, the Internet will emerge as the fastest growing medium, followed by radio. Spends on newspapers and television are expected to grow by 10 and 11.6 per cent respectively in 2010, while the growth in radio and the Internet will be 14 and 16 per cent respectively. Spends on outdoor will grow at 2 per cent, which is much lower than the growth rate of 9.4 per cent in 2007-08. In 2011, the growth is expected to rise to 7.8 per cent.

By 2012, newspapers will see investments of Rs 13,957 crore as advertising spends, while television will attract spends of Rs 12,801 crore. Outdoor will clock ad spends of Rs 1,408 crore, while ad expenditure on radio will reach approximately Rs 965 crore, as per the forecast. Advertising spends on magazines will be around Rs 729 crore, while on the Internet, the spends will increase to Rs 669 crore. Cinema advertising spends will amount to Rs 172 crore by 2012.