23 December 2005

India's advertising industry is projected to be the third largest growth driver of global advertising in 2006. In its recent report on the advertising industry, Hong Kong-based Media Partners Asia (MPA) said that India is expected to register 13-14% growth in advertising spends, next only to Indonesia's 16-18% and China's 16-17%. Substantiating the report, Zenith Optimedia in its recent report forecasts Asia-Pacific ad spend growth of 6.4% in 2006 as compared to 5.5% this year (an upgrade from its midyear forecast of 5.1%). This growth will be driven by double-digit gains in mainland China, India, Indonesia and Vietnam and solid momentum in the Philippines and Hong Kong.

MPA noted that a significant boost to ad spends in the region will be driven by sporting events scheduled in 2006 including the Winter Olympics in Turin (February), Fifa World Cup soccer in Germany (June-July) and the Asian Games in Doha (December). Competition remains intense among newspapers and TV channels, driven by new launches, greater pricing power, higher consumption of both print and TV (especially cable TV), and aggressive investment in expansion from market leaders such as the Times of India group, Dainik Jagran, HT Media, STAR Group, Zee Telefilms and Sony Entertainment TV. Spend from major categories such as FMCG, which contributes over 50% to the TV ad pie, is also showing signs of resurgence after a relatively soft 2004 and first half of 2005. Hindustan Lever, for instance, raised its spend by 22% during Q3 2005 while the likes of Dabur India, Colgate-Palmolive and Godrej increased spend by more than 40% during the same period, the MPA report said.