Indian ad spends to grow by 23.2% in 2021: GroupM TYNY report

TYNY forecasts India’s advertising investment to reach an estimated Rs 80,123 crore this year

e4m by exchange4media Staff
Updated: Feb 16, 2021 2:10 PM

After a 21.5% decline in ad spends in 2020 due to the pandemic, the Indian ad industry is expected to see recovery in 2021 with ad investments expected to reach Rs 80,123 crore, which is a 23.2% growth over 2020 and 3.35% growth over 2019 ad expenditure of Rs 82,904 crore, as per the GroupM futures report ‘This Year, Next Year’ (TYNY) 2021.

Of the Rs 15,000 crore of incremental ad spends in 2021, the share of digital is at 40% while the non-TV & Digital share of overall India ad spends in 2021 will be at 20%. The digital share of overall India ad spends in 2021 will be at 35%. The report expects FMCG, e-commerce, Auto, Telecom, Retail, and Durables to be growth drivers of ad spends in 2021.

Television is projected to grow at 18% to touch ad spends of Rs 35,914 crore. In 2020, the medium declined by 14% to Rs 30,436 crore. Digital is expected to grow at 28% to reach Rs 27,700 crore. Compared to 2019, the medium had degrown by just 2% at Rs 21,726 crore in 2020.

2020 was a bloodbath for print, radio, outdoor, audio, and cinema. Print, which was the third-largest AdEx medium, had de-grown by a staggering 43% to Rs 10,350 crore. It is expected to recover some of the lost ad shares in 2021 with a projected growth of 23% resulting in ad spends of Rs 12,731 crore.

After a 72% drop in 2020, outdoor is expected to grow at 69% to touch Rs 1,570 crore in 2021. Audio advertising is slated to increase by 17% at Rs 1687 crore. It had seen a 49% decline in 2020 at Rs 1,436 crore. Cinema advertising is expected to rebound in 2021 with a 197% growth on a lower base of Rs 175 crore. The total ad spends on cinema is expected to touch Rs 520 crore.

In 2021, global ad spends are estimated to grow by 10%. The report also noted that 82% of the global incremental ad spend in 2021 is expected to come from the top 10 markets. India will be the ninth-largest market in ad spends in 2021, a sixth-largest contributor to incremental ad spends in 2021, and the second-fastest growth market in the top 10.

Digital was the only medium to witness a gain of $27 billion globally in 2020. Digital as a media vehicle will continue to skyrocket due to the increase in digital dependency and changing consumer patterns, the report said.

Commenting on the TYNY 2021 report, GroupM South Asia CEO Prasanth Kumar said, “2020 was an unprecedented year. The pandemic impacted across sectors and it, therefore, affected the media investments too. As we are aware, the year that went by had a mixture of lockdowns, many restricted market momentum and overall threw a challenge and impacted multi-industry economies. The ad industry too had its challenges and 2020 witnessed a steep drop in the overall media investments. However, we have witnessed a month-on-month upturn in the industry starting Q3 last year and we are quite optimistic about the revival that 2021 will see. With the gradual easement of the lockdown backed by seasonal spends and big-ticket events like IPL, we expect 2021 to continue to build on that momentum. While the global ad spends are estimated to see a rise of 10% in 2021, digital is expected to take 67% of ad spends. With the help of technology, marketers have adapted to pandemic-proof ways by constantly innovating, staying relevant, and offering digitally charged solutions to brands.”
GroupM India President – Partnerships and Trading Ashwin Padmanabhan said, “Based on a strong foundation built on the back of FMCG and e-commerce, 2021 is expected to see growth across sectors like auto, telecom, consumer durable, retail, and education. Manufacturing, which was severely impacted by the pandemic, is now stabilizing and moving toward a positive outlook enabled by automation, technology, and supply chain optimization. 2020 has accelerated the adoption of agile, cost-effective business models, which will help brands and marketers offer better products, services, and experiences to consumers.”

GroupM India President - Investments and Pricing Sidharth Parashar said, “Along with digital, television saw a spike in consumption during the lockdown. With acceptance on the subscription bandwagon increasing, OTT will continue to witness constructive growth and is likely to develop with more players attracting users by investing in content. Print & Radio expected to be backed by local advertisers and certain categories with marketeers leveraging the brand solutions that these media offer.  We expect OOH and cinema to see double-digit growth after a difficult year. Given the uncertainty and cautiously spending consumer, brands are realizing the importance of being present wherever consumers are. Hence along with continued relevance of television & other mass media, we will witness advertisers leveraging relevant platforms to reach out to its audience.”
Key trends that are likely to shape the industry

GroupM also shared some of the top trends that will shape the industry in the coming years. The trends presented were around consumer behaviour, sports, gaming & e-sports, growth of OTT, connected commerce, the ecosystem of fragmented social media, digital transformation, innovations in audio, etc.

GroupM South Asia President  - Growth and Transformation Tushar Vyas noted that there has been a great shift in consumer behavior due to the pandemic. During the lockdown, he said that there was a 42% growth in searches to know “what's normal” for body stats like BP, body temperature, and blood sugar. Further, browsing content on healthy cooking went up by 100%. All this points to a marked change in what the user is seeking, towards self-preservation and wellness.

"This is also further accentuated by over 52% rise in content consumption on pets and a 70% increase in searches related to Yoga. This behaviour change will also imply how they look at Brands and consumption at large. Consumers are also more likely to embrace brands that showcase empathy and care about the larger world /environment. This is presenting an opportunity to brand to highlight the goodness in every possible way," Vyas noted.

Talking about hyperlocalisation, Vyas said that the happenings in our immediate surroundings are taking precedence over what is happening in the country or the World. According to him one of the biggest indicators of this is the surge in regional language news & content during the lockdown.

"We are seeing similar trends in digital consumption as well in terms of the rise of more regional news and content consumption– in platforms like Daily Hunt and ShareChat. This also is happening simultaneously as our capability to sharp shoot communication has increased – for example, our ability to do Pincode level targeting, thanks to multi-faceted data points on the audience or targeting based on distribution pattern or market share in specific locations. Brand owners have the opportunity to leverage this and drive precision at scale."

He also offered some interesting insights about the growth of OTT and subscription services in 2020. He pointed out that 2021 would “once-in-for-all” smash the adage that Indians don’t pay for content and drive up the subscription game for Sports and other forms of quality original content. It’s creating a direct 2 consumer opportunity.

Vyas stated that many OTT players have achieved their subscription targets 12-18 months ahead of time. "This is not limited to live sports and premium video content – there’s the start of a similar trend in news, audio content, and premium domain-specific content in small ways."

2021, he said, is also going to be an interesting year for sports as 2020’s loss, in terms of sports events, is 2021’s gain. Global sporting events like Euro 2020 and Tokyo 2020 are due to happen this year and add to this, local favourites like IPL 2021 (within 6 months of its previous edition) and ICC T20 (which would be hosted in India).

Speaking about the trends in gaming and e-sports, Wavemaker India Chief Content Officer Karthik Nagarajan said that gaming will become not just about time spent but also a cultural destination. The nature of this entertainment is not a lean back but a more immersive one. Music concerts and other experiences will also be activated on e-sports platforms.

"A handful of businesses can talk positively about 2020 and COVID-19. One such benefactor is gaming and esports. In peak lockdown during April 2020, there was an 11% increase in users per week and has seen a rise in the number of gamers where 66% of new gamers are females and 56% of new gamers are above the age of 45. Now gaming as an industry has evolved in multiple ways too. Most companies in this industry are looking to create platforms that will be central to an individual’s life where activities, like shopping, socializing, events (especially esports) can all be done in virtual and interactive ways."

Nagarajan also revealed that esports live-stream viewership during the lockdown grew by 61% and 66% in weeks 1 and 2, respectively. These are great signs, considering that despite the majority of the on-ground esports events getting pushed in 2020, the gaming fans have held their own. With 2020 contributing immensely to gaming habit formation; for 2021 to be the year of esports, organisers need to focus on building career opportunities starting with an improved prize money pool.

He also averred that going forward platforms will become creator-led than community-led. The ecosystem will move from the network effect (how many of my friends/people are there on the network) to people joining platforms more for the experience and creators on it.

"We are possibly looking at 4-5 different platforms with a 100 million-plus user base, not far from now Influencer content for brand building will sustain but a majority of categories will move towards a performance mindset for advocacy. Newer platforms, driven by creators already have seamless commerce features built-in. This will spur content-to-commerce in a big way in 2021. The journey from platform-based advocacy to an integrated strategy for brands will now scale to include commerce as well. This will also bring in more industry guidelines on influencers disclosing brand partnerships."

Further, he stated that immersive audio is set to become a cultural movement as it has a loyal audience across age demographics. "As we predicted last year, audio has truly made its comeback in style. Platforms like Clubhouse are seeing great traction and the audience for podcasts has grown manifold in India in 2020 and the MAUs are already where social media was a few years back. The IAB has just released technical guidelines for podcast measurement in the US. In India, standards and guidelines will emerge and be solidified, as we are reaching critical mass. Given the proven efficacy of audio on brand recall, this will be extremely critical for brands looking to make cultural interventions."

On the digital transformation of brands, Xaxis India Country Head Bharat Khatri said that the digital transformation process got accelerated post-Covid as industry leaders aggressively deployed new tools, data & cloud infrastructures. This, he said, will help create new age “Marketing Digital Infrastructure “and replace old tech which was becoming a barrier to fast-track digital transformation.

He added that advancing towards a P3PC (post-third-party cookies) has accelerated the long-term data strategies plan to own the consumer where brands have already started to deploy CDPs (Customer Data Platforms) to transition from segment audience data approach to individual consumer profiles. The industry will continue to see this trend whereby both the advertiser & publisher ecosystem put more focus towards 1st party data activation powered with contextual targeting.

Moving to OTT, Khatri said that the streaming wars will take a device-agnostic approach. 2020 pandemic turned out to be an opportunity in crisis for the OTT industry in India. Connected TV, he said, is simply becoming the new TV. It is the way large segments of consumers will access premium content. "As we see by its current use for reach extension, CTV is a medium through which mass brand messaging can continue going forward. The fact that it is more targetable and measurable than ‘old TV’ enables marketers to elevate and personalize their messaging when appropriate. So, it can be the best of both worlds."

The hybrid model being pursued in India by the home-grown broadcaster & independent OTTs is giving advertisers plenty of opportunities to reach consumers through engaging video formats & achieve real outcomes in a device-agnostic world. "In 2021, this advertising channel will continue to have a lion share in programmatic spends & will also bring incremental budgets from the traditional/linear TV pie. With increased spends, we will also see advertisers adapting to more evolved, efficient & effective programmatic buying methods like PMPs (Private Market Place) to get a unified consumer view & thus maximising the ROI from video spends."

With e-commerce platforms becoming an indispensable digital channel to reach target audiences and influence sales, Khatri said that marketers will need to think like DTC brands – embracing emerging technologies, customer service obsession, and adaptive messaging to get closer to their consumers.

"DTC brands have excelled at creating 1:1 relationships with their consumers since they have closed-loop measurement within their customer journeys. Shoppable Ads are on the rise as Genz is deciding on social media videos. These new media formats play an important role in cultivating better outcomes overall for an advertiser."

In 2021, he believes that there will be a big shift of spends happening from current market-leading DSPs especially in display channel towards the new age e-commerce DSPs like Amazon, Flipkart, and Paytm. "Categories, where spend shifts, are quite inevitable are FMCG, BFSI, Grocery, Apparels, Health & Personal care, as e-com DSPs offer end to end marketing funnel solutions with efficient ROAS."

According to Khatri, brands need to embrace AI to boost personalisation at scale. 'It is like feeding an algorithm with historical & real-time data and then letting AI perform analysis, build & serve the user hyper-personalised message. Traditional personalised creative tools were built for targeting customer personas or profiles, where each profile used to represent a category of consumers, however, in the case of AI personalisation tools it is like engaging with each customer as an individual profile. With increased social commerce share, AI-based hyper-personalisation engines will be the need of the hour, as it will improve both ROI & customer experience."

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