ZenithOptimedia's forecasts on India's ad market look up

The air looks good for Indian ad-dom this year! French advertising conglomerate Publicis Groupe SA's media agency, ZenithOptimedia, effectively engaged in crystal ball gazing to arrive at a conclusion that India's ad industry will grow by 9% this year, compared to the only 1% growth registered last year.

The agency's predictions also augur well for the hard-hit developed markets, which after staggering for more than a year with consecutive downgrades are returning to normalcy and will return to growth in 2011. The global market will improve steadily over the next three years, it states, registering 4.1% growth in 2011 and 5.3% in 2012.

The study reveals that despite the economic downturn, India's economy grew at 6-7%, though the ad spends at 1% growth didn't tinkle too well at the till. However, according to ZenithOptimedia, things are looking up this year and total ad expenditure for India for this fiscal is projected to touch Rs23,631.9 crore. The agency study specifies that the total ad spends for India is projected to reach around Rs283.2 crore in the next three years.

The agency has also upgraded its forecast for global advertising industry growth from 0.9% to 2.2% for 2010.

While clearly the digital world seems to rule the roost in the growth story, the media agency credits the paid search as the main engine that drove the curve up, almost to 52.1% by 2012. The other mediums like television and newspapers, which took a beating during this period with plummeting ad spends, can now look forward to better times. Ad expenditure in newspaper advertising, which saw a 5% growth in 2009, is likely to see 7-8% annual growth this year, and touch revenues of about $2.28 billion. Riding on the digital wave and improved advertising opportunities offered by the new entertainment formats, the Indian television industry will also see a 11-12% growth, the study says.

Predicting a correction in the print medium, especially in English newspapers, chief executive officer, ZenithOptimedia, Satyajit Sen said most of the growth story after the meltdown will come from digital properties, especially those in the mobile domain, apart from rising ad rates. Other main contributors will be sporting events like the Indian Premier League and the Commonwealth Games this year that will do the industry good. Internet advertising in India will grow at an annual rate of 25% in the coming three years, the study finds.