EY: Digital connectivity to boost Indian advertising sector

EY, expects that those under 25, with more earning potential and therefore spending potential, will grow by 54% between 2014-2018, contributing to exponential growth in the Indian advertising and marketing sector by 2018. In addition, expected growth in the number of smartphones (66%) and broadband penetration (220m) plus digital and over the top (OTT) music and video platforms across entertainment, news, sport and social media will create new opportunities for advertisers to efficiently reach target audiences, leading to an increase in ad spend.

MUMBAI: The Indian advertising and marketing sector is likely to witness an exponential growth by 2018 says advisory firm EY. The company says people under the age group of 25, with more earning potential, will grow by 54% from the earlier growth rate of 40%, between 2014-2018.EY says with this new generation of consumers with earning and spending potential every marketer will increase its advertising budget across all media vehicles. The growth rate will however depend on three factors — the media mix of the advertiser, which geographies the campaign will include and how mass or niche the product is."Growth in the number of affluent young users, supported by increased smart phone and broadband penetration will provide new opportunities for advertisers to efficiently reach their target audiences", said Ashish Pherwani, Head – Advisory, Media and Entertainment, EY. By 2018, EY says smartphone penetration will grow 66% and the total number of broadband subscription will exceed 220 million.He further added, "Digital and OTT (over the top) music and video platforms across entertainment, news, sports and social media will provide customised content and targeted advertising, enabling digital advertising to reach.`15,000 crore by 2020." The next phase of growth in digital advertising will come from rural India, he said.Media agencies concur with E&Y’s analysis. "As earning potential improves, marketers will indeed increase their advertising budgets across media vehicles", said Hari Krishnan, managing director, ZenithOptimedia."However, growth is driven by an overarching change in consumer mindset and is likely to come irrespective of the three factors. For individual media vehicles, the growth will be driven by the reach and time spent on the medium.An increasing share of spends is likely to go to the digital medium as youth in increasing numbers get connected", he further added.