Discounts by broadcasters, ease in lockdown bring AdEx on recovery track  

Experts say June saw a growth of 30-40% with broadcasters offering discounts and offers to attract advertisers. July likely to see up to 50-60 % growth compared to April-May

e4m by Naziya Alvi Rahman
Updated: Jul 6, 2020 9:04 AM
adex

As we enter the fifth month of the COVID 19-induced lockdown, advertising industry is hoping to get to terms with the new normal. The AdEx, which reported a drop of up to 70 per cent in March-April, is expected to recover by up to 50-60 per cent by July. It will still be much less than July 2019. However, hoping to leave the worse behind, the industry is expecting a complete recovery by the festive season.
Talking of June numbers, Vinita Pachisia, Senior Vice President, Carat, said the month has seen a decent increase in AdEx, to the tune of 30-40 per cent over April-May. “However, we also need to understand that the AdEx dropped drastically in April-May due to the lockdown, so June AdEx is still not at par with pre-covid levels and will take some time to get back to the regular level,” she added.
Shekhar Banerjee, Chief Client Officer and Head-West, Wavemaker, who also echoed the view, believes the real picture on AdEx will be out only by August. “We have seen a strong recovery in AdEx starting June, and July looks even better. However, fundamentals behind this surge are not strong; a lot of this spend is triggered by the penned-up demand and fear of losing market share post lockdown. August will be the real test,” Banerjee added.
Experts believe even the June growth numbers came in with broadcasters offering discounts and offers to attract advertisers. “While we cannot put a number to the discounts since each genre has its own limitations, the mere reduction of AdEx since April has forced most of the broadcasters to shell out hefty discounts to bring back advertisers on their platforms. Similarly, since print was the most affected, publications also worked out different combinations to get the advertisers to spend on the medium,” Pachisia added.
Another senior industry expert, who did not wish to be quoted, said broadcasters right now do not have much option but to offer discounts, and so far, it has worked for them. “Particularly for genres that are not doing well, broadcasters are selling spots in packages. This is particularly true for July which is usually a low spend month due to rains and it being a pre-festive month,” he added.
Talking about the preferred mediums for spends, experts unanimously agree digital, OTT (over-the-top) and TV to be leading. “Choice of medium tells a very compelling story. First of the block is performance linked spends, followed by digital, and finally TV is getting triggered, a pure reflection of how supply chain is scaling up across India at advertiser’s end,” Banerjee added.
Pachisia too believes the same. “At-home entertainment options such as digital, TV, online gaming have seen an upswing as 'lockdown behaviour' resulted in different habit formation. OTT segment that has been the beneficiary of the lockdown and seen rise in consumption is likely to see greater ad budget allocation by brands post recovery, she added.
Talking of categories, FMCG continued to dominate the advertising space in the past few weeks. Sectors like e-commerce, telecom, automobiles, insurance have gradually started to increase their advertising spends. Meanwhile, amongst genres, News and Movie continue to be the biggest gainers due to lack of original content on GECs. “We can see traction back on GECs only once the production houses open up and shoots for original episodes resume,” Pachisia added.

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