Media agencies: 2020 year of de-growth, 2021 of hope
Industry experts discuss the many challenges and opportunities in the year dubbed as the toughest for media agencies so far
By all means, this has been the toughest year for all businesses. Media agencies were no exception. With both big and small companies shrinking their ad budgets, media business took a major hit. Moreover, in this year of uncertainty, apart from AdEx, media measurement also came under the scanner, further slowing down the business.
With vaccines for COVID around the corner, most industry experts are pinning their hopes on 2021. Shashi Sinha, CEO, IPG Mediabrands agrees this was one of the toughest years that the veteran has seen in his sprawling career. “This was a tough year but we are hopeful that 2021 will give us respite. We aren’t giving out numbers, per se, but yes the first half was a complete washout and things started picking up in the last two quarters,” Sinha told e4m.
Anand Bhadkamkar, CEO- India, Dentsu, estimates 2020 to have caused a de-growth of 15 to 18 per cent on the overall business across sectors. “2020 has been a difficult year in all aspects. From AdEx point of view, in a first, we have seen de-growth,” he told e4m.
Shekhar Banerjee, Chief Client Officer & West Head, Wavemaker India, however, called 2020 a mixed bag. “Like most of the business, the media agency was no different. We experienced the year in two phases, April-June quarter we took a severe beating as India went into nationwide lockdown. However, we also saw a strong rebound during the festive season. Diwali clubbed with IPL witnessed nearly Rs 3,000 crore worth of advertising,” he added.
All experts unanimously believe that the impact of the lockdown was maximum on print, radio, cinema and OOH sector. TV, however, began recovery as soon as the shoots started in the second quarter and was much on track by the festive season.
“We are witnessing the volume of advertising on television is back to normal and overall Adex net positive in Oct-Nov-Dec quarter vs 2019. However, cinema and OOH is still badly affected but local advertising is making a comeback on the print medium, although print advertising is still lagging,” says Banerjee.
Bhadkamkar also believes that print and OOH were heavily impacted throughout 2020. However, in the last quarter, there was some respite for the print. “The growth for print in the last quarter was better than anticipated. Even radio, wherein some channels went in for a digital transformation, started to show recovery. OOH and cinema still continues to struggle and may take some time to come back on track,” he added.
Digital- the way forward
Amongst all sectors, digital, however, continued to show growth over the last year but only at 15% against the 30% growth that was projected for it this year, says Bhadkamkar. “Changing consumer behaviour is one of the obvious reasons why digital grew in the covid period. People preferred staying indoor,” he added.
Banerjee believes both TV and digital showed rapid recovery in the second half of the year. “While TV is back to normal levels in the Oct-Nov-Dec quarter, starting June itself, we have seen the adoption of digital as scale medium significantly going up. Most of the digital medium growth is powered by bottom-funnel deployment,” he added.
Vision for 2021
2021 is the year when all businesses hope to go back to the old normal. Sinha believes with a base as low as 2020, the New Year should in all likelihood give us much better results. “Last two quarters have shown improvement and we can hope things will continue to get better as we move ahead,” he added.
Banerjee adds that despite all the constraints that lockdown came with, his agency did some of the best work for their clients in 2020. “We believe there is always a better way to grow our client’s business and in turn grow our people,” he concluded.
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