While general elections, cricket World Cup and IPL are expected to drive advertising expenditure (adex) growth in India in 2019, the year will also see ad spending to cross the $10-billion mark for the first time, say experts.
According to Dentsu Aegis Network, CY2018 will end with around 11% growth in adex. “In 2019, we expect 12% growth. The growth is expected from three major areas—general elections, IPL and the cricket World Cup.
Being an election year, the government spending will go up before the model code of conduct is implemented. This trend has been seen for the last four-five general elections,” says Ashish Bhasin, chairman & CEO, south Asia, Dentsu Aegis Network.
While online video (which includes OTT) and search will continue to boost digital advertising pie with over 30% growth, e-commerce advertising is an emerging vertical that will bring new ad dollars. “India is the only market in the world where all media is growing, albeit at different rates. We are in a sweet spot and this should continue for next three to four years,” says Bhasin.
However, digital will get a push further this year with political parties using digital videos for more reach.
“There is dramatic increase in the number of ad formats used in political advertising that we have observed during state elections. Apart from running advertisements on TV, political parties can get more reach by using digital video. There will also be an increase of text ads on Facebook, Twitter and Google. In fact, bidding for text ads increases by 70% during elections,” says Tanmay Mohanty, Group CEO, Zenith India.
Both TV and digital will see growth these elections, but not at the expense of each other. In fact, Zenith forecasts approximately 60-80% more advertising money going into digital and TV compared to the last general elections. “We see around 12% of adex to come from the Lok Sabha elections alone,” says Mohanty. Even as elections will be a new factor this year, from media money point of view, the growth will continue to come from sports properties. According to Mohanty, sports related advertising and sponsorship will touch $1.3 billion this year, of which 60% would be contributed by media money. “Cricket is a universal property and give advertisers a wide audience quickly. General elections is not a media spending opportunity for brands, though government spending increases. The elections will add to adex, but the impact is slightly overestimated. Political advertising will be around Rs 2,000 crore. In a Rs 70,000-crore adex market, it adds on, but is not substantial,” says Bhasin. Among media channels, print is holding the fort with a growth rate of 3.3%, TV at 14.5% and digital at 34.9% in 2019 (as per Zenith). The biggest push in digital is expected from mobile video, which includes OTT and paid search. “We expect at least a 200% increase in advertising money going into OTT,” says Mohanty. Another trend to watch out for is search money shifting to e-commerce. “For some large advertisers in India, e-commerce advertising is now 25% of the ad dollars they spend on Google search. Not just Amazon, which hold 65% of the market of e-commerce advertising in India, Flipkart-Hotstar deal and Paytm Mall’s self-service advertising is expected to give further boost to e-commerce advertising next year,” says Mohanty.