The ad industry is projected to touch Rs 1.08 trillion by the end of 2023, say analysts, with tentpole properties such as the ICC Men’s Cricket World Cup, a pandemic-free festive season, and the release of Bollywood blockbusters pushing advertising expenditures in the second half of the year past Rs 60,000 crore.
This is compared with Rs 42,000 crore-Rs 45,000 crore expenditure during the same period last year. Advertising expenditure at the end of 2022 stood at Rs 89,803 crore.
The 2023 figures have far surpassed expectations, say observers. Advertising spends by edu-tech and many digital-first brands fell off rapidly in the second half of 2022, leading to muted growth expectations for this year.
Brands routinely spend 35-40% of their annual ad budgets between August and October, say experts. The August-October spends this year have been 50%-plus for a large majority of consumer and financial sector brands.
Analysts say this surge can be attributed to India’s performance in the run-up to the World Cup final as well as the sporting event coinciding with the festive season, when consumption hits a peak. The 2023 World Cup ad spending has surged by 60-70% over the 2019 edition.
“FMCG, CPG and BFSI sectors have all supported this growth, and the fact that the matches are all happening in India at suitable timings has contributed to the surge in viewership and their advertising,” says Karan Taurani, senior vice-president at Elara Capital.
According to Sachin Kumar, co-founder of Bottle Openers Digital Solutions, the year has been special also because the country has left the afflictions of the pandemic behind.
“We got to see the Indian Premier League, enjoy the festive season without the fear of Covid-19, witness the Cricket World Cup, and take in the comeback of blockbuster Bollywood movies all in one go. All of this has contributed to the increase in spending,” he says.
Adding to that, the rise of connected TV and digital streaming has allowed smaller brands to advertise affordably to specific regions via geo-targeting. “The incremental gains have been phenomenal on the digital medium because not everyone can adopt the TV + OTT + digital + outdoor approach taken by bigger brands,” Kumar adds.
Thus, newer, younger brands, especially D2C ones have benefited greatly, he says. “Usually, large, pan-India brands typically spend 30-40 crore on TV or generic media every year. This year, a lot of younger brands are reaching out to the masses and have spent8-10 crore on an average on the digital medium,” he says.
Says Vikram Bhalla, founder and director of Vivify Asia, “Companies are finally seeing a return on their advertising investments as all eyeballs are at the expected places.”
Bhalla adds that after combining the audience numbers on linear television and streaming, many premium brands can reach a “financially filtered” audience as well, which has resulted in more efficiency.
“It’s good timing,” concludes Sandeep Goyal, managing director, Rediffusion. “India is performing well and all Diwali advertisements managed to become cricket-themed. That has given a fillip to the industry.”