Ad spends in India to grow 11.6 per cent this year on back of polls

India's media industry is expected to get a big boost this year from advertising by political parties ahead of the general elections, along with higher spending by key advertisers such as the consumer goods, telecom and automobile industries. This would translate into an overall 11.6 per cent rise in total ad spend, says a GroupM report.

''Advertising by political parties alone is expected to give a boost to the sector by up to over 2.5 per cent. We envisage a stronger second half with an upsurge in ad spends,'' the media buying firm said in a report on Tuesday.

GroupM, owned by the WPP Group, is the largest media buying firm in the country. The WPP Group is the world's biggest advertising company.

''Sectors like FMCG, auto and retail will continue to see a table increase in ad spends. We will see an increase in rural spending by FMCG and telecom,'' GroupM chief executive (India and South Asia) C V L Srinivas said.

At the same time, he stressed the need for a change in approach and mind-set of media houses in order to be relevant in the changing business scenario.

According to of GroupM's Advertising Expenditure 2014 report, out of the 11.6 per cent increase in total ad spend, 35 per cent will be in digital media - which includes mobile, internet and value-added services - which will show the highest growth. This will be followed by 12 per cent in TV, a drop from 13.6 per cent in 2013. Advertising in cinema will remain constant at 12 per cent.

The report estimates that newspapers will show markedly increased growth at 8.5 per cent in 2014 as against the 2013 estimate of 4.6 per cent, owing to the growth in vernacular print publications across the country. But magazines will witness a negative growth of 5 per cent.

The report said good rural income and benign raw material prices will give more flexibility to FMCG (fast moving consumer goods) companies to increase spending on advertising.

The advertising expenditure is likely to increase this year in the retail sector on the back of more players getting into the food and beverage segment, e-commerce making inroads into small towns and regional players getting into national arena, it added.

The firm said the first half of the year will continue to be uncertain given the general economic and political environment and ''ambiguity'' over the viewership rating system.