Indian advertising expenditure recorded its lowest growth in the last six years (barring the pandemic years) in CY23, posting a meagre 10% increase over CY22, according to a report by integrated media agency Madison World.
Indian AdEx (advertising expenditure) reached Rs 99,038 crore in 2023, adding just Rs 9,235 crore and falling short of Madison’s projected growth of 16% for the year.
The report said geopolitical crises in Europe and West Asia, inflation and the funding winter among startups hit ad spends despite the 7.3% GDP growth.
However, India still fared better than global AdEx, which saw a 5% increase.
In 2024, Madison projects India’s AdEx to grow 12.2% and reach Rs 1.1 trillion. Digital expenditure is expected to grow at 17% to Rs 46,565 crore, contributed largely by video and e-commerce. TV will grow 8% to reach Rs 35,575 crore. India’s growth projection is higher than WARC’s global AdEx forecast of 8.3% for this year.
The key factors expected to drive digital advertising growth are advertiser focus on short-term results, rise in OTT and CTV (connected TV) penetration, and Indian Premier League (IPL) on digital at a flat advertising cost. TV ad expenditure is expected to be driven by big ticket events like the IPL and the ICC men’s T20 World Cup. Both print and TV are expected to benefit from the general elections, with an increase in political ad spends.
Sam Balsara, chairman at Madison World, said, “While the outlook for India’s AdEx is extremely strong in the mid and long term, in the short term, we are witnessing a slowdown in momentum because of India Inc’s focus on quarterly profits. This does not augur well for sustained growth in profits for advertisers, who should be focusing on volume growth.”
In 2023, digital AdEx expectedly grew faster at 15% than non-digital media (at 7%), though its share in the AdEx pie is lower at 40% compared with traditional media (60%). However, 2023 was the slowest in 10 years for digital advertising. Digital advertising added Rs 39,714 crore to the total pie, with video contributing 33%, followed by social media spends at 21% and e-commerce at 17%.
TV ad spends added Rs 32,886 crore with 33% share of the AdEx, while print added Rs 19,250 crore with a 19% share. Sporting events like the Asia Cup, Asian Games, and ICC World Cup played a big role in TV advertising revenue growth. The report estimated that TV would have grown by only 4% instead of 7% without these events.
FMCG advertisers were TV loyalists, increasing their spending by 12% from Rs 13,725 crore in 2022 to Rs 15,353 crore last year.
Cinema AdEx fell further to Rs 776 crore in 2023 compared to pre-pandemic levels of Rs 1,045 crore in 2019. The report attributes this drop to the growth of OTT.