Study: India 2008 ad spend to rise 20%

GroupM sees jump to $5.6 bil, led by traditional media buys

NEW YORK -- Indian ad spending will grow 20% in 2008 -- to $5.6 billion -- and another 19% in 2009, making it the world's third-largest developing ad economy behind China and Russia.

The projected spending hikes come on the heels of a 20% increase in 2007, according to a new study from ad sales company GroupM, which predicts that India will be the world's 15th-largest ad market by 2009.

Measured ad investment worldwide has grown by almost 50% since 2000, rising to a projected $496 billion in 2008. In that same period, ad spend in India has nearly quadrupled, from $1.5 billion to this year's projected $5.6 billion, GroupM said in its report.

Adam Smith, director of futures at London-based GroupM, called India "one of the world's most under-advertised countries, since measured ad investment accounts for only 0.5% of GDP, compared with a global norm of around 1%."

With slow or no growth in the developed world, India will be contributing one in 20 of all new ad dollars expected in 2009, making it the third-largest developing ad economy in the world behind China (one dollar in three) and Russia (one in 10).

GroupM said that most of the growth in India has been driven by spending in traditional media since Internet spending has been comparatively slow. India's Internet penetration was relatively low at 46 million monthly users at the end of 2007, or 4% of the population.

However, Smith said that India's Internet use will accelerate as the quality, quantity and search capabilities of local providers improve.