Mumbai : The winter update of MAGNA’s “Global Ad Forecast” predicts that global media owners net advertising revenues (NAR) will reach $853bn this year, more than 5.5 per cent above the 2022 level and will grow by more than 7.2 per cent in 2024.
• The Asia Pacific advertising economy grew more than 8.2 per cent to $286bn this year powered by India, Pakistan and China. In 2024, APAC advertising revenues will increase more than 6 per cent.
• India is now consistently the fastest growing market and leads the ad spend growth globally. India moves into top ten markets and forecast to climb to 8 position by 2028. Indian advertising sales grew over 11.8 per cent in 2023 to Rs 1099bn ($14bn) and is the 11 largest market.
• In India, Digital formats contribution to growth is slowing down (more than 14.2 per cent in 2023 Vs more than 25.7 per cent in 2022), however digital remains the largest at Rs 500bn ($6.4bn) with a share of 46 per cent. Linear formats will grow by more than 9.9 per cent with both television and print growing equally at more than 8 per cent. Radio (more than 12.1 per cent) and OOH (more than 29.8 per cent) are seeing a robust recovery though still short of pre- covid revenue.
• In 2024, the India advertising market will grow by more than 11.4 per cent. Digital formats will rise more than 13.9 per cent to reach Rs 569bn ($7.2bn), while linear ad sales will increase by more than 9.3 per cent to reach Rs 655bn ($8.3bn).
MAGNA India SVP, director - intelligence practice Venkatesh S, said: “In 2023H1 advertising spend grew more than 9.6 per cent, accelerated in the second half of 2023 to more than 13.8 per cent. The recovery is driven by festive spending and marquee events like ICC WC and elections. Globally, Traditional media owners’ (TMO) ad revenue growth is slowing down, while in India both Linear (more than 9.9 per cent) and Digital formats ( more than 14.5 per cent) are growing. Traditional formats will still be the largest, at least till 2027, though pure play digital is driving the adex. Non-linear formats (AVOD, Digital Newspaper, Podcasting & DOOH) of TMOs are growing steadily in double digits and contribute 5 per cent to the total revenue of TMOs.”
India along with China is projected to contribute about half of global GDP growth in 2023 & 2024. After a more than 7.3 per cent expansion in 2022, the IMF in their latest October 2023 update predicts a slight deceleration in economic activity with real GDP growth of more than 6.3 per cent in 2023. The GDP has been revised up by 0.4 per cent from the April 2023 update as economic growth remains robust. India is reliant on its own domestic demand, private consumption, and investment spending for its growth. The overall sentiment is positive and upbeat though the market remains complex with local and global pressures. Large consumer base and aspirations of the young Indians works in its favour.
Inflation remains vulnerable to rising food and fuel prices. The task of bringing inflation back to target is a priority for the government through macro prudential measures and monetary policy tightening. After more than 6.7 per cent in 2022, inflation though expected to ease down to more than 5.5 per cent in 2023 is still in the upper bracket of the central bank’s desired range.
The Union Budget’s focus on boosting manufacturing, higher disposable income with lowering of taxes and increased spending on infrastructure augurs well for the adex growth. Advertising spending is growing at a healthy rate of over 11.8 per cent in 2023. Total ad sales are rising from Rs 982bn ($12.5bn) in 2022 to Rs 1099bn ($14bn) in 2023.
Consumers are increasing their spending, primarily driven by the young working adults who are investing in experiential led categories like travel, auto, and entertainment. Impassable categories like CPG, continue to see higher spending. 2023H2 which includes festive spending, ICC World Cup and government spending before the upcoming national elections early next year is expected to contribute 10-12 per cent incremental growth to adex.
CPG, auto and fintech are the most dominant sectors contributing to India’s adex growth followed by government, communication, travel, and real estate. Retail including e-commerce, financial services, Media & Entertainment and Apparel will see average growth, Startups who have been the mainstay for all tent poles properties have either cut budgets or moved to performance marketing than brand marketing. With the new retrospective taxation policy on gaming, brands have exercised caution in spending.
According to TRAI In the last few years, the Government has fostered the digital ecosystem with inimitable assets like Aadhar, UPI & DigiLocker taking the digital public goods to a higher level. Also, driven by rising internet user base and affordable devices, currently 881mn have access to internet as of march 2023. Government has also initiated labs to develop applications using 5G service to ramp up digital business services and this will have a rub off on the digital advertising economy. In 2023, overall digital ad spends will grow over 14.2 per cent to top Rs 500bn ($6.4bn). India takes the lead in mobile growth followed by the US and Brazil according to a report by Adjust and it is a mobile first market. The share of mobile within digital will touch 59 per cent this year. There are 467mn social users in the country and it has been the bellwether for digital growth with more than 19 per cent growth. Total video registers more than 16 per cent growth. It is noteworthy that OTT players display robust growth trends driven by increased CTV subscribers, content choices and local language play. The OTT subscription is estimated to be at 50mn this year. In 2024 total digital growth estimated at more than 13.9 per cent to touch Rs 569bn ($7.2bn).
Overall Television is growing but Pay TV is facing challenges from Free Dish, FTA channels and OTT in terms of subscriber base. Following the implementation of the amended New Tariff Order (NTO) 3.0 which allowed broadcasters to hike channel access price, subscribers have moved out of Pay TV being a price sensitive market. Despite this, Television is still the largest video medium with over 900 million viewers and daily viewing at 222 mins. In the light of rising consumption of short form content along with web series and availability of TV shows on OTT platforms, the time spent indicates TV is holding onto its audiences. The proposed broadcast bill extending its purview to include OTT, will help eliminate disparities to the advantage of linear television. Also, there remains considerable growth opportunity for TV and advertisers are keen to cover the vast population of live audiences. Television ad revenues in 2023 will grow more than 8.9 per cent to reach an estimated Rs 365bn ($4.6bn). In 2024 TV advertising was estimated to grow more than 9.9 per cent to reach Rs 401bn ($5.1bn).
Newspaper has risen to be the most credible source of information. With 391mn copies (2021-22) circulated every day and language print taking the lead, the geographical spread and the audience size presents a massive marketing opportunity. The advertising growth is on the back of recovery in volumes; however, yield remains a challenge. In 2023, ad sales revenue will grow over 8.1 per cent to Rs 175bn ($2.2bn). Growth expected to continue in 2024 to drive an increase of over 9 per cent, Rs 187bn ($2.4bn).
Radio’s road to recovery has been a gradual one. Despite the volumes crossing pre-covid levels, yield has been a struggle though ad rates have flared up slightly. The industry is battling challenges of measurement limitations and audio streaming apps gaining user base. Radio players are offering airtime bundled with off air solutions to make up for the revenue. Government led allowance of news broadcast and increase in Government advertising rates will accelerate ad spends. Overall, advertising revenues are growing by 12.1 per cent to reach Rs 18bn ($229mn), which is 80 per cent of the pre-COVID market size. In 2024, radio estimated to grow over 11 per cent, Rs 20bn ($254mn)
OOH advertising has consistently grown post the pandemic as audience movement continues to ascend. Rising roadside DOOH screens in metros and state capitals, substantial presence in ambient spaces have added to demand, leading to growth in DOOH spends which contributes 5% to total. In 2023 OOH revenue increased by 26.7 per cent valued at Rs 30bn ($382mn) reaching 90 per cent of the pre-COVID market size. This pace will be sustained for a few more years and in 2024, OOH will exceed 2019 revenues adding over 16% to the size. In-cinema advertising is up sharply as audiences are flocking to cinemas. State-of-the-art technologies like IMAX and Dolby Atmos, has transformed movie-watching into a truly awe-inspiring experience and this has been another reason for audience draw. It will cover 74 per cent of 2019 market size by the end of 2023 with an impressive over 43% growth to reach Rs 8bn ($102mn). In 2024, the growth is estimated to be more than 19%.
IPG Mediabrands India Chief Investment Officer Hema Malik, commented: “India continues to script its unique narrative in the advertising landscape, boasting robust growth across diverse mediums despite evolving consumer preferences and market dynamics. The promising trajectory across television, digital, radio, and out-of-home channels signifies the dynamic nature of our advertising landscape. I am optimistic about the future as India's advertising story unfolds, driven by innovation, adaptability, and a burgeoning consumer base."
