Indian ad spends grew by 17.6% in 2015; to grow by 16.8% in 2016: Madison Advertising report 2016

The Madison Advertising Report 2016 was released at a function held in Mumbai last week. The Indian advertising industry grew a whopping 17.6% in 2015 and is expected to grow by another 16.8% in 2016, taking the total advertising market to Rs 51,365 crore by end of 2016.

The advertising market over two years would have grown by 37.3% on the back of 16.5% growth in 2014. TV barely pipped Print to become the largest medium, contributing 39% of the total ad pie against 38% by Print. Hindustan Unilever was the top spender in 2015 at Rs Rs 2,500 crore, followed by Amazon at No. 2.

Sam Balsara, Chairman, Madison World, commented, “Our prognosis for 2016 is that it is going to be yet another good year for Media. In arriving at the numbers we are conditioned by the fact that the Indian economy has become the fastest growing economy of the world; our GDP growth rate at 7%+ is the envy of the western world, now looking at India in new light. The BJP government tells us that it has made a number of structural interventions to prepare the economy for high growth and continues to remind us that they are strongly focused on stimulating the country’s economic growth for which pro-business policies are essential, at the same time not ignoring subsidies for the poor, which should also add to purchasing power of Rural India. Finally, commodity prices including that of Oil are likely to remain soft throughout 2016.”

Balsara added, “Although Indian businesses have expressed concern that all the positive actions taken by the government have not resulted in growth on the ground, we feel that India Inc. remains very optimistic about the future and they will once again invest heavily in advertising to protect and gain market share of their brands and also launch a number of new brands and variants and ecommerce platforms and apps to capture the imagination and meet the requirements of modern India.”

Key Highlights of Madison Advertising Report 2016:

Indian advertising industry grew a whopping 17.6% in 2015 and is expected to grow by 16.8% in 2016, taking the total advertising market to Rs 51,365 crore by end of 2016. In other words, the advertising market over two years would have grown by 37.3% on the back of 16.5% growth in 2014.
The industry added Rs 6,586 crore to the market in 2015 alone. Contrary to popular belief, the main contributor to this growth continued to be FMCG, which contributed 31% to the growth, compared to Ecommerce players who contributed only 12%. Auto and Telecom contributed to 14% and 13% respectively to the growth.
It took five years (2008-2013) for the ad industry to add Rs 10,586 crore, but only two years 11,885 crores to reach nearly Rs. 44,000 crores.
The pace of growth of the advertising market certainly seems to have picked up. Over the last 3 years (2013-16) it will grow by 60%, while it grew only by 28% in the previous three years 2010-2013.
TV pipped Print to become the largest medium, contributing 39% of the total ad pie with ad spends touching Rs 17,261 crore in 2015. The medium grew by 22% in 2015 and is expected to grow by 20% in 2016.
Print is just a little short of TV, and is the second largest medium contributing 38% of the total ad pie at Rs 16,935 crore in 2015. Print grew by 11% and is expected to grow by 10% in 2016.
With the highest growth of 29% in 2015, Digital continued its growth surge and has now established itself as a firm No. 3 in the Ad mix, contributing 12% of the total ad pie. Digital ad spend crossed Rs 5,000 crore in 2015 and is expected to grow by another 30% in 2016. Though the absolute spends on Search have increased, its share of the digital pie has gone down due to the fact that video, social and mobile display grew at a faster rate last year.
FMCG clients continue to be the largest contributor and spent Rs 12,364 crore or 28% in advertising across media, followed by Ecommerce players which contributed 10% with spends at Rs 4,231 crore. Auto and Telcom are next in line contributing 9% and 8%, respectively.
Advertising continues to be a big boys’ game, with the largest spender Hindustan Unilver spending approximately Rs 2,500 crore, and the top 10 spenders accounting for 17% of the total market and contributing to 47% of the top 50 list.

Top 10 spenders: