China, India to drive growth of global advertising market

07 Dec,2011

By Samidha Sharma

 

Emerging markets like China and India will drive growth for the $464-billion global advertising market in 2012, according to Publicis Groupe, the third-largest communications group in the world.

 

India (the 16th biggest ad market in the world), along with China, Russia and Brazil , over next three years, will account for 33% of the global ad expenditure growth, said a report by Publicis’ media agency ZenithOptimedia, released on Monday.

 

Buoyed by this growth the French advertising conglomerate , owner of agencies like Leo Burnett and Saatchi & Saatchi, is on course to triple its business in India over the next three years, said Jean-Yves Naouri, COO & Executive Chairman of Publicis Worldwide. “In the next five years, India is expected to be among the top ten ad markets in the world,” Naouri, told TOI. Naouri is tipped to take over from Maurice Levy who has been at the helm of the Paris-based group for over two decades now.

 

“For us growth will come organically, and also through acquisitions if we do not have the scale and capability in some areas. But so far we are progressing very well as far as closing the gap with WPP goes,” Naouri added. Publicis Groupe took over Gomye, a Chinese full-service digital agency, last week and has made several acquisitions in the local market there but has not replicated the model in India . China is already a top five market for the group.

 

In Mumbai, for the annual board meeting, he said the importance of India is growing as now many of its agency heads in India are directly reporting into the headquarters . “We are not talking of Asia-Pacific as a region, now India and China are reporting directly to the group. It’s a sign that these are the markets for the future. I am spending most of my time in these countries be it Mexico, China , Brazil or India,” he said.

 

With the growing focus on India, the group may also look to increase its digital offerings here, through the introduction of Razorfish, which it acquired from Microsoft for around $530 million in 2009. Revenue from the digital stream for the group globally touched 30% this year while developing markets contributed as much as 25% to the overall revenue. “We have been pretty much ahead of the curve in the digital space with Digitas already present here, we may look to expand our portfolio but it is not a necessity,” he added.

 

Referring to the forecast made for 2012 by its media agency, he said the slowdown in the Western markets had not impacted ad spends like it did in 2008. ZenithOptimedia said the global ad expenditure will grow 4.7% in 2012 up from 3.5% in 2011 accelerated by the Olympics, the European Football Championships and the US Presidential election.

 

“Businesses are cautious as the debt crisis has hit us hard but the impact is pretty moderate. In India, the inflation rate has been high and the growth has slowed but so far our agencies have performed pretty well with a double digit growth,” Naori said.

 

Source:The Economic Times

Copyright © 2011, Bennett, Coleman & Co. Ltd. All Rights Reserved

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