THIS YEAR NEXT YEAR 2016 INDIA REPORT

THIS YEAR NEXT YEAR 2016 INDIA REPORT

THIS YEAR NEXT YEAR 2016 INDIA REPORT INTRODUCTION India is the fastest growing ad market among all the major markets of the world. 2015 was the bes...

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THIS YEAR NEXT YEAR 2016 INDIA REPORT

INTRODUCTION India is the fastest growing ad market among all the major markets of the world. 2015 was the best year for ad spend growth we've had in the last five years. While global headwinds are building up in the new year, there are a number of positive factors that will help the Indian ad sector grow at higher levels in 2016. The GroupM TYNY 2016 India report highlights these factors. While FMCG, Auto and Ecom which have been the top sectors contributing to ad growth in 2015 will continue to invest, Telecom including handsets, BFSI and the Government sector are expected to see a ramp up. Events like the T20 World Cup and multiple state assembly elections will give a further impetus to ad spends. Though Digital will remain the fastest growing platform, India is one of the few large markets where most traditional media platforms will show positive growth. The overall mood is still one of cautious optimism, perhaps a bit more optimistic than cautious. But we will need to see how the first half pans out. As we do every year, we shall revisit our projections at the middle of the year. There are several interesting developments that have implications for marketing and brand building. Consumers have unlimited choice accessing brands and deals. There is an explosion of data, moving from aggregated sources to more fluid and connected ones. We have recently crossed 1 billion mobile connection, have over 350 million internet users, of which 300 million access the internet through their mobile device. Brands are redefining the way they leverage Movies, Music and Sports as marketing platforms. These and many such trends will keep all of us busy, excited and engaged! The team at GroupM India, including our agencies and specialist units have put together a list of ten key trends to watch out for in 2016. We are also delighted to share with you our estimated advertising expenditure in the This Year, Next Year 2016 India report.

Happy reading!

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Estimated Media Spends (Rs. Mn. NET) TV Radio Newspapers Magazines Cinema Out Of Home Digital Media Total INR CR

2011

2012

2013

2014

2015f

2016f

14,026

14,812

16,860

19,411

23,022

27,074

1,458

1,530

1,643

1,808

1,997

2,195

13,303

13,622

14,248

15,329

16,125

17,099

820

820

820

779

675

575

210

242

271

340

408

510

2,093

2,152

2,282

2,483

2,582

2,732

1,515

1,939

2,520

3,402

4,950

7,300

33,425

35,117

38,645

43,552

49,758

57,486

Note: All the numbers are net advertising revenues, not inclusive of agency commissions. Hence they reflect what media owners have earned and not what is advertisers have spent. SOURCE: GroupM TYNY 2016

Media ADEX reported excludes: TV - Special inventory like astons, L-bands, tickers, etc Print - Tender notices, appointments, classifieds/ matrimonials Radio - Activation spends Digital - Ad spends by SME segment Outdoor - Wall painting

Disclaimer: All rights reserved. This publication is protected by copyright. No part of it may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means, electronic, mechanical, photocopying or otherwise, without written permission from the copyright owners. Every effort has been made to ensure the accuracy of the contents, but the publishers and copyright owners cannot accept liability in respect of errors or omissions. Readers will appreciate that the data are as up-to-date only to the extent that their availability, compilation and printed schedules will allow and are subject to change.

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Year on Year Percentage Change 2015- 14.2% 2016- 15.5% 60.0 50.0

45.5

47.5

40.0 30.0 20.0

25.0 20.0

18.6 17.6

10.0 0.0

14.2 15.5

10.4 9.9 5.2 6.0

TV

Radio

Newspapers

-10.0

Radio Newspapers Magazines Cinema Out of Home Digital Media Total YOY% Change SOURCE: GroupM TYNY 2016

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Cinema

5.8

Out of Home

Digital

Media Total YOY% Change

-13.4 -14.8

-20.0

TV

4.0

Magazines

2015f

2016f

2011

2012

2013

2014

2015f

2016f

18.3

5.6

13.8

15.1

18.6

17.6

10.0

5.0

7.4

10.0

10.4

9.9

7.5

2.4

4.6

7.6

5.2

6.0

0.0

0.0

0.0

-5.0

-13.4

-14.8

15.0

15.0

12.0

25.4

20.0

25.0

9.3

2.8

6.1

8.8

4.0

5.8

30.0

28.0

30.0

35.0

45.5

47.5

12.8

5.1

10.0

12.7

14.2

15.5

Sector Wise Spends Break UP 2016

21.5%

28%

FMCG Auto E-comm

3.1%

Retail Telecom

4.1%

BFSI Services

4.4%

8.2%

4.5%

Education Cons. Durables Real Estate

4.7%

8.1% 6%

Others

7.6%

SOURCE: GroupM internal estimates, All media ADEX spends dispersion, Others includes Elections, Corporate, IT/Ites, Industrials, Media, DTH etc.

FMCG remains the most dominant sector with a 28% share of the AdEx. Despite facing volume pressure, the sector is expected to continue ad investment aided by the softening of commodity prices. In 2016 Ecommerce ad spends are expected to be high on the back of increasing competition, market expansion and newer players entering the space. Many leading traditional retailers will be expanding their Ecommerce presence in 2016 even as consolidation continues in the sector. Another exciting development is the opening up of Ecommerce as a platform for advertising, which will see further traction in 2016. With the advent of 4G services in India, telecom service providers are expected to roll out extensive marketing campaigns across media. This roll out will also see global and domestic handset manufacturers launching new models of 4G/ LTE handsets. Another big contributor to the Indian AdEx this year will be the Auto sector, on the back of multiple launches across both 4-wheelers and 2-wheelers.

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Global AdEx Estimates Usd, Mn. North America YOY% Latin America YOY% Western Europe Yoy% Central & Eastern Europe Yoy% Asia-pacific (all) Yoy% Middle East & Africa

2015f

2016f

182,847

187,614

1.7

2.6

32,261

34,175

8

5.9

90,919

94,040

2.3

3.4

11,996

12,371

-3.2

3.1

161,856

173,392

5.9

7.1

17,531

18,182

1.9

3.7

497,410

519,773

3.4

4.5

Yoy% World Yoy%

Incremental Ad Growth ($ Bn) 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 Japan

India

Brazil

UK

USA

China

Disclaimer: GroupM's forecast model has one principal independent viariable; the IMF's calculation of each country's share of global GDP at PPP. This is intended merely for scenario planning, GDP forecasts know nothing of structural changes in media advertising, so neither can model this.

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(Consumer choice) Consumer choice increasing exponentially with inflow of global brands and emergence of India specific local brands, creating higher expectations from them.

Moment Marketing with Omnichannel Presence Brands are resorting to adaptive marketing to win the moments that count and reach the right consumer at the right time with the right message.

UberX of Business Accelerated change is challenging the economics of business and creating a strong service ecosystem.

Data Marts to Data Lakes Business intelligence will move continuously, powered by connected data infrastructures where the data lives in one place and can be integrated and analyzed for patterns.

Non Cricketing Sports- A Longer 'League' Time Emerging sports to have elongated presence around the year, with bi-annual schedules or longer seasons to attract and retain audiences and advertisers.

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200+ Days of Live Music Action Music festivals will continue to create sharp differentiation by focusing on specific genres. They will also create successful IP's independent of established and celebrated artistes and offer brands a round-the-year calendar to engage with audiences.

Brands will become Movie Publishers and Producers Brands partnering with movies will seek longer windows of co-branded and co-produced associations to derive optimal benefits and leverage multiple opportunities offered during the various stages of film making.

Digital Advertising = Mobile Advertising With 1 billion mobile connections and counting, mobile is now emerging as the gateway to the connected world, driving awareness, engagement and commerce for advertisers, leading to a lion’s share of the digital marketing mix.

100 Million is the new LOWEST COMMON DENOMINATOR on mobile Every mobile media, be it video, audio, infotainment, social has reached 100 million users across multiple publishers, giving scale to multi-screen planning.

Marketers will demand higher accountability on mobile The ecosystem will work towards developing common metrics and standards to address the needs of marketers.

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About GroupM GroupM is the leading global media investment management company serving as the parent to WPP media agencies including Mindshare, MEC, MediaCom, Maxus, and Motivator in India, as well as the programmatic digital media platform, Xaxis, each global operations in their own right with leading market positions. GroupM’s primary purpose is to maximize performance of WPP’s media agencies by operating as leader and collaborator in trading, content creation, sports, digital, finance, proprietary tool development and other business-critical capabilities. GroupM’s focus is to deliver unrivaled marketplace advantage to its clients, stakeholders and people. Discover more about GroupM at www.groupm.com. Follow @GroupMWorldwide @GroupMIndia on Twitter Follow GroupM on LinkedIn - https://www.linkedin.com/company/groupm

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