A report on the advertising industry in India states that the advertising expenditure (Adex) collapsed in Q2 by as much as 65% due to the COVID-19 pandemic. Adex contracted in Q1 as well by 8%, while digital was the only medium which registered a growth of 16% in Q1. The Pitch Madison Advertising Report brought out by Madison Media states that the Adex was Rs 67,603 crore in H1 2019, which plunged 39% to Rs 21,298 crore in H1 2020.
In Q2, Print de-grew by almost 80%, Radio by 90% and Cinema and Outdoor recorded virtually no billings, the report says.
TV still continues to be the largest contributor to Adex in H1 of 2020 with 38%, followed by Digital at 30% and Print at 25%.
TV
Due to the enforced lockdown and work-from-home policies, Q2 saw a spike in TV consumption, but this rise in viewership has not translated into TV Adex growth, the report says.
TV de-grew by as much as 61% in Q2 and 13% in Q1. Overall, TV de-grew by 43% in H1.
The sharp drop is attributed to nearly 1200 advertisers, who skipped advertising altogether and many large advertisers who continued to advertise, but brought down their advertising budgets.
FMCG increased its dominance in TV Adex with a share of 56%, higher than the 2019 figure of 49%. This is primarily due to increase in advertising by newer COVID categories in personal hygiene like sanitiser, handwash liquids, disinfectant sprays and multiple products related to immunity building.
Digital
Digital suffered a minor dip of 7% in H1, whilst all the others suffered a drop of 40% to 55%. Digital is also the only medium to grow by 16% in Q1 2020, when all others registered a double digit drop.
In Q2 2020, Digital de-grew by 35%, yet Digital emerged as a strong No 2 medium with 30% market share second only to TV.
E-commerce advertising platforms made their presence felt registering a 10% share.
Print ADEX suffered not just because of lack of advertising money in the market, but also because newspapers could not be delivered to households in many cities in the months of April and May, due to the lockdown.
Whilst most readers could lay their hands on the e-version of their favourite titles, widely in circulation on WhatsApp, quick monetisation was difficult, the report says.
Print de-grew by as much as 79% in Q2 and 17% in Q1. Overall Print de-grew by 51% in H1.
Categories like FMCG, auto, education, continue to be the main cash cows and contributed almost 45% to Print Adex in H1’20, compared to 38% in 2019.
Forecast
ADEX is likely to recover in H2 2020 and grow at a dramatic rate of 60% to 72%, after a lean H1 on the back of the festival season, the report notes.
Despite the dramatic increase in H2, ADEX in full year 2020 will contract by 14% to 18%.
TV and Digital have shown early signs of getting back to normalcy and should get back in full form by September or October, aided by the launch of IPL, Bigg Boss and KBC.
The report states that H2 Adex will primarily depend on demand coming back in markets which will depend on sentiment and consumers’ outlook of the immediate future, which in turn will depend on when government and private offices are allowed to open and work on a regular basis.
Sam Balsara, Chairman, Madison World, said, “We are bullish in our forecast for H2 2020. We believe advertisers will return to Adex in full form by Q4 to take advantage of the festive season. Enlightened advertisers know that they cannot risk being off advertising for risk of losing market share, since share lost is expensive to regain. Media owners are well advised to be nimble and flexible with existing advertisers and spare no effort in helping local and regional brands become national brands and help hitherto unadvertised brands taste the power of advertising.”