PMAR estimates 26% growth for 2021 as market set to bounce back
Digital to grow 25%, TV 17%, Print 35%, Outdoor 90%, and Radio 38%
The Pitch Madison Advertising Report, 2021 has been unveiled and it predicts a 26% growth for ADEX in 2021, taking advertising expenditure to Rs. 68,325 crore, almost the same level as 2019. After a particularly dull year, commercial activities have returned with a vengeance and the report estimates that India will be the fastest-growing advertising market in the world followed by UK (14.7%) and Australia (13.2%) going by WARC estimate of growth of global markets.
Analysis of current economic indicators shows that slowdown is truly behind us and we are onto the path of a robust recovery in the economy. The PMAR expects a wide variation in growth rates across different mediums with Digital growing by 25%, adding Rs. 4,226 crore to its kitty. In traditional media, Print is expected to add as much as Rs. 4,175 crore and achieve a growth rate of 35%, followed by Outdoor which should add Rs. 1,158 crore resulting in a growth of 90%. Cinema is to achieve a growth rate of 161%, which will take Cinema ADEX to Rs. 475 crore, which is about half of the 2019 number. Radio is touted to achieve a growth rate of 38% in 2021. This will take Radio ADEX to Rs. 1,750 crore. TV ADEX is set to grow by 17% to close at Rs. 26,350 crore. One must remember that these high growth rates are projected for Print, Outdoor and Radio because of high de-growth rates for these media in 2020.
Sam Balsara, Chairman and Managing Director, Madison World, while unveiling the report, said, “Last year COVID-19 caused havoc to our economy; it is no surprise that ADEX could not remain insulated, it dropped by 20% in 2020 over 2019. Also almost 1/3rd of the traditional ADEX got wiped off in 2020, i.e. it dropped by 29 per cent compared to 2019. COVID-19 damage to Print has been massive and it has seen a degrowth of 41% losing Rs. 8,120 crore out of the total Rs. 13,450 crore that ADEX lost. On the other hand TV got an ego boost with TV’s share of ADEX increasing to 42% from 37% in 2019. Digital was the only medium to have witnessed a positive growth in 2020, Digital ADEX has grown by 10% to reach 17000 cr. We do not expect Cinema, Radio, and OOH to return to their 2019 levels."
It does appear that COVID-19’s negative impact on Indian ADEX has been severe, compared to many other countries of the world including the US, by far the largest ADEX market. As per the estimates, in 2020, total ADEX has degrown by 20% and traditional ADEX by as much as 29%. This level of degrowth was predicted in PMAR’s mid-year report released in August 2020.
In absolute terms, ADEX has degrown from Rs. 67,603 crore to Rs. 54,151 crore, a drop of a whopping Rs. 13,452 crore, the highest ever drop in one year in the history of Indian ADEX. The last time Indian ADEX has seen any negative growth was way back in 2009 when on account of the Lehman crisis Indian ADEX had degrown by 9%. At Rs. 54,151 crore ADEX today has gone back to the level it had achieved in 2017 and if you look at only traditional ADEX, then it has gone back to the level that we achieved five years ago in 2015.
Please find the detailed report here.
Following are the highlights from the report:
TELEVISION 2020: DESPAIR TO BOOM
While the first three quarters saw TV de-grow by 31% over 2019, Q4’20 grew by 66% over Q3 2020, recording a high 56% growth over Q4 2019 thanks to IPL and festival period. TV’s share of ADEX increased to 42% from 37% in 2019. E-commerce, edtech and FMCG were the biggest contributors to the TV ADEX. While Television ADEX did suffer on account of COVID, the drop in ADEX could be considered minor at just 11%, compared to other traditional media’s de-growth. The ego-boosting fact for the Television industry is that TV has grown its share of total ADEX to a high of 42%, consolidating its position as the numero uno medium, arresting a steady decline in share from 42% in 2011 to 37% in 2019, in one clean sweep.
2020: The year of COVID-19 has dented Digital ADEX’s record of having grown at 25%+ for the last 10 years and achieved a compound average growth rate of 27% in the last decade. Yet it is to the credit of Digital that while all other media have degrown in the year by 11% to 83%, Digital ADEX has grown by 10%. With this growth, Digital ADEX has reached a value of almost Rs. 17,000 crore and now has a share of 31% of ADEX. It has also climbed one rank in the media listings and displaced Print to become the No. 2 medium, preceded only by the TV. It is also significant that Digital has grown in three quarters and de-grew only in Q2 by 35% when there was a strict lockdown. This drop of 35% must be seen in comparison to the drop of 79% in Print and 61% in Television in the same quarter. Video, not only is the largest contributor but has further increased its share from 30% to 32% during the year. Both Social and Display have marginally improved their share and all three have grown shares at the expense of Search.
PRINT ENGINE LOST STEAM
Print ADEX de-grew in all four quarters registering de-growth of 41%. Print ADEX, the 2nd largest in terms of the market share of total ADEX in 2019 has been the biggest casualty in the COVID-19 year. Out of the total Rs. 13,450 crore that ADEX lost in 2020, Rs. 8,120 crore was contributed by Print. Print during 2020 lost as much as 40.5% of its ADEX and conceded the No. 2 slot to Digital, coming in at No. 3 position with an ADEX of Rs. 11,925 crore and its share of ADEX now stands at 22%. It conceded its No.1 position which it maintained for decades to TV way back in the year 2009. Newspaper circulation in metros got affected a little more deeply and recovery seems to have taken longer. Because of which contribution of Hindi in terms of volume has increased from 35% to 38% with English trailing at 24%. Kannada and Malayalam newspapers showed the highest resilience and least degrowth in terms of volume, while Tamil, Telugu and Marathi publications de-grew the most.
RADIO: POOR RECEPTION
Radio ADEX came down dramatically in value, de-growing by 44%. Radio ADEX was the third-worst affected medium and came down in value from Rs. 2,260 crore to just Rs. 1,270 crore. This sharp drop has taken Radio back to the year 2014 when it was Rs. 1,300 crore. With this drop, Radio has also lost 1% market share and now has a share of 2%.
Unlike in Outdoor and Cinema where the drop in ADEX is mainly because of a drop in footfalls, Radio seems to have suffered despite witnessing a spike in listenership on FM. The reduction is obviously because of lower availability of advertising rupees in the market, because of which advertisers concentrated only on primary media like TV and Digital.
OOH 2020: ROADBLOCK
OOH ADEX de-grew 63% on the back of empty roads due to lockdown. While Q4 showed huge growth of 336% over Q3 2020, normalcy is yet to return. Even when traffic has recovered to the extent of 90%, advertisers don’t seem to be in a hurry to return to Outdoor as before. In 2020 OOH ADEX de-grew by as much as 63% to a low of Rs. 1,292 crore and its market share dropped by as much as 3% points from 5% in 2019 to 2% in 2020. Like in Radio, OOH has gone back to the value it had achieved 13 years ago in 2007. In the last decade, transit media has outpaced the growth of conventional OOH given the modernising of airports, new airports and arrival of metros but 2020 saw a reversal of this trend when conventional OOH market de-grew by 56% but transit media de-grew by 82%. Looking at it quarter wise, OOH ADEX recorded near-zero billing in Q2, about Rs. 100 crore in Q3 and more than Rs. 400 crore in Q4. Q4 numbers are still only 53% of 2019 figures.
CINEMA 2020:SCREENS LOCKED
While all media including Digital suffered due to COVID-19, Cinema suffered the most and is estimated to have suffered an 83% drop, capsizing its low base of around just a little over Rs. 1,000 crore to under Rs 200 crore. This is understandable, given that Cinemas were ordered to be closed by the Government during the lockdown and in most states were allowed to open only in November and that too with just 50% capacity. The long closure has no doubt tempted some banners to launch their productions on OTT and led some others to seriously look at making films for OTT launch.
TOP ADVERTISERS OF INDIA IN 2020
Based on their ad spends the top 50 advertisers of India for the year 2020 have been listed in the PMAR report and it is a diverse mix from categories like FMCG, telecom, auto, e-commerce, mobile gaming and consumer durables. But FMCG dominates the list with as many as 19 names in top 50 and as many as six in top 10. There are only four non-FMCG advertisers in the top 10 – Amazon, Reliance, Maruti Suzuki and Byju’s. Hindustan Unilever tops the list with spends in the range of 3500 crore to 4000 crore, but at No. 2 comes Reckitt Benckiser which in 2019 was not even in the top 10 with spends between 900-1000 crores this year. Other prominent advertisers that have gained in rank are Vodafone, Byju’s, Wipro, Amul, LIC, Hero, Tata Motors, LIC, P&G and Godrej Consumer Products. Prominent amongst those who substantially lost many ranks are Vivo Mobile, Apple, Mahindra & Mahindra, Honda Motorcycle, Emami, Airtel, Dream 11, Titan and Oppo. Top 50 advertisers account for 35% (last year 33%) and top 10 Advertisers account for as much as 18% (LY 16%) of total ADEX and 50% (LY 53%) top 50 ADEX.
Top 50 advertisers spend 86% (LY 78%) of their budgets on TV and Digital establishing that these are the two dominant mediums of ADEX and their relative size also confirms this.
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