MAM
India’s ad spend estimated at 13.3 per cent by Magna Global Forecasts 2015
MUMBAI: In its latest study of global media owner advertising revenues, covering 73 countries, Magna Global estimates that ad revenues grew by more than 5.5 per cent this year, to reach the half-trillion mark ($512 billion). Advertising sales will grow by more 4.8 per cent in 2015 to reach $536 billion.
Some of the most significant revisions in the 2015 forecasts are found among BRIC markets. China and Brazil advertising revenues are still predicted to grow by a decent amount (+8.6 per cent and +5.9 per cent, respectively) although two to three points below previous expectations. Russia is the single biggest negative revision, due to the combination of declining energy prices and the partial withdrawal of Western investors amidst geopolitical tensions; the 2015 advertising growth forecast is cut from 7.0 per cent to 0.8 per cent.
India will, thus, become the most dynamic among the four BRICs, with an expected ad spend growth of +13.3 per cent following a similar pace of 2014 (+13.2 per cent).
The general elections that took place in the first part of the year generated massive incremental spend. The outcome of the election, bringing a new BJP-led Government to power, improved business and consumer confidence, is what prompts ad growth forecast in the coming year. The new government is also committed to invest billions in order to connect millions of rural Indians to broadband internet, in a plan advertised through a recent meeting between the new Prime Minister Narendra Modi, and the Facebook founder Mark Zuckerberg.
Magna Global global forecasting director and author of the report Vincent Letang said, “In 2014, the long-awaited European recovery finally came in time to partly offset a weaker- than-expected growth in the US and the BRICs. In 2015, the lack of non-recurring events, the continued slowdown of the BRICs and the deflationary effects generated by the rise of digital media will inhibit global advertising growth, in a slight disconnect with the positive acceleration in the macro-economic environment.”
The report highlights that in the APAC, within digital, the fastest growing formats are social (+58.6 per cent growth), followed by video (+37.6 per cent growth) and search (+25.5 per cent growth). Mobile spend on social formats continues to lead the way, and other formats will follow.
Television remains the dominant format for advertising spend in APAC, and spend will grow by 3.5 per cent this year and represent slightly over 40 per cent of all advertising dollars. Broadcast television continues to dominate the TV landscape, although multi-channel television is gaining share due to slightly higher growth rates, and by 2019 will represent nearly one quarter of TV dollars. Print continues to lose market share, and newspaper and magazines together will represent less than one in five advertising dollars this year. This is down from one third of all spending as recently as 2008.
APAC will continue to be one of the stronger regional drivers of global advertising spend, although its lead on the global growth rate continues to narrow. Its total share of global ad spend will only increase slightly between this year and 2019, from 29 per cent to just over 30 per cent of total spend.
Brands
Jubilant FoodWorks faces Rs 47.5 crore GST demand, plans appeal
Tax authorities flag alleged misclassification of restaurant services
MUMBAI: Jubilant FoodWorks Limited has landed in a tax tussle after receiving a GST demand of Rs 47.5 crore from the office of the additional commissioner of CGST and central excise in Thane, Maharashtra.
The order, issued under the provisions of the Central Goods and Services Tax Act, 2017, relates to an alleged incorrect classification of certain services under the category of restaurant services. According to the tax authorities, this classification resulted in a short payment of goods and services tax for the period between the financial years 2019-20 and 2021-22.
The demand includes Rs 47.5 crore in GST along with an equal amount as penalty, in addition to applicable interest. The order was received by the company on March 13, 2026.
In a regulatory filing to the BSE Limited and the National Stock Exchange of India Limited, the company said it disagrees with the order and believes its arguments were not adequately considered.
The company is preparing to challenge the decision and plans to file an appeal. It added that once the redressal process is complete, the demand is likely to be dropped.
Despite the sizeable figure attached to the notice, the company said it does not expect any material impact on its financials, operations or other activities.
The disclosure was signed by Suman Hegde, EVP and chief financial officer, who confirmed that the company received the order at 19:06 IST on March 13 and has already initiated steps to contest it.
The development places the quick service restaurant major in the middle of a tax debate that could hinge on how certain restaurant-linked services are classified under GST rules. For now, the company appears ready to take the matter from the tax office to the appeals desk.
