Ad industry likely to revive in H2 next year

By: |
December 20, 2020 10:51 AM

As per a KPMG report, `57,900 crore will be earned in advertising revenue by media houses in 2020

India, which was ranked the third-largest market for advertising by GroupM in 2019, may clock the highest decline among other top marketsIndia, which was ranked the third-largest market for advertising by GroupM in 2019, may clock the highest decline among other top markets

India’s advertising industry is expected to decline by about 15-20% in 2020; however, there is a possibility that it could match 2019 levels by the second half of 2021. As per a KPMG report, `57,900 crore will be earned in advertising revenue by media houses in 2020 — a steep decline from `72,600 crore in 2019.

Industry analysts say advertising spend, which took a severe beating in the April-June quarter, surged during the festive season driven by nearly `3,000 crore worth of advertising on IPL 2020. As per data provided by Anand Rathi Institutional Equities, October attracted about 30% of all ad spend during the April-October period across TV, print and radio — `5,966 crore was spent on advertising in October.

Ajay Gupte, CEO, South Asia, Wavemaker, pegs the decline of India’s advertising industry to be around 15-20% this year. Volume of advertising on television is back to normal, say industry analysts. However, media houses are still struggling with commanding pre-Covid advertising rates. “The medium that has been the worst hit is cinema. Local advertising is making a comeback on the print medium, although print advertising is still lagging behind TV,” adds Gupte.

The impact of the pandemic will wane over the next three to six months.
Sathyamurthy NP, executive director, president, OMD Mudramax and executive director, DDB Mudra Group, forecasts that, “The first half of 2021 will see improvement and register a decline of about 5-10% y-o-y. We expect H2 of 2021 to match or perhaps even exceed the performance of H2 of 2019 by 10-15%.”

India, which was ranked the third-largest market for advertising by GroupM in 2019, may clock the highest decline among other top markets. According to GroupM’s This Year, Next Year global forecast, Japan, the UK, Germany, France, South Korea, and Canada are expected to register a decline of 14%, 4.4%, 2.0%, 15.5%, 1.9%, and 14.1%, respectively. In the US, excluding political advertising, the industry is expected to decline by 7.3%. In China, the advertising industry has been forecast to grow by 6.5% in 2020. Overall, the median for expected decline in all countries during 2020 is 11%, as per the study.

Brands learnt that they can no more delay having a strong digital presence. As a result, several brands have accelerated their e-commerce launches and are setting aside budgets to build and reinforce existing digital assets.

In FY22, digital advertising revenue (at `29,200 crore) is estimated to overtake television ad spend (which could fall behind at `25,800 crore), as per KPMG. Nishi Kant, president, mcgarrybowen India, says lead generation will be the most important digital marketing aspect followed by content and creative advertising in 2021. “Paid media will get maximum allocation: as high as 31%. Social media marketing, creative production, content marketing and PR will together account for 30%,” he says.

Follow us on Twitter, Instagram, LinkedIn, Facebook

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

BrandWagon is now on Telegram. Click here to join our channel and stay updated with the latest brand news and updates.

Next Stories
1How social commerce is redefining India’s e-commerce ecosystem
2How Indian tech companies need to plan a way for sustaining and growing business in 2021
3What is the maker or breaker of a brand