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MEDIA Spending: Digital growth rate tops other media

As overall spending eases from prior year

 

Spending on digital media is expected to increase 30 percent in India this year. The rate is slower than a year ago, but faster than any other advertising medium, and it far outpaces the overall 10 percent increase in total Indian advertising spending.

 

The rate of total media spending slowed slightly this year because of demonetization and other factors, with spending expected to reach around INR 61,204 crore ($9.5 billion), according to GroupM, in its This Year Next Year 2017 India report.

 

Although digital spending grew faster than spending on other media, traditional advertising also remained a growing part of the media mix. In fact, India is the only major advertising market in the world where media spending on print advertising continued to increase.

 

In India, 40 percent of year-on-year incremental media spending went to digital; 60 percent went to traditional media. In contrast, major global media markets on average devoted 77 percent of their incremental spending to digital and 23 percent to traditional media.

 

Still, India’s digital spending growth rate exceeds the growth rate in many other major media markets, including: Russia, where digital spending is expected to grow 17 percent; China, 22 percent; the UK, 15 percent; the US, 9 percent; Germany, 7 percent; and Brazil, with a decline of 8 percent.

 

Except for fast moving consumer goods (FMCG), with 27 percent of Indian media investment, spending was distributed almost evenly among categories, led by auto and e-commerce with 8 percent, and followed by retail, telecom providers, banks and financial services, and education. Intensifying competition and increased rural penetration should continue to drive FMCG media spending growth, GroupM predicted.