It was a happy Diwali, ad spends report 15-20% increase over last year : Experts

This much-needed recovery and increase in spends will help the advertising industry experience an overall growth of around 10-12 per cent over last year

e4m by exchange4media Staff
Updated: Nov 6, 2017 8:59 AM

Following a good spell during the festive season, the advertising industry has witnessed a recovery with an increase in ad spends across sectors. Industry experts said that there has been a 15-20 per cent increase in ad spends this year over last year. This much-needed recovery and increase in spends will help the advertising industry experience an overall growth of around 10-12 per cent over last year.

Apprehensions about this festive season were high ahead of the first big festival of the season - Ganesh Chaturthi. The implementation of the Goods and Services Tax, RERA, residual impact of demonetisation and a short festive season were expected to hamper performance this season. But the industry seems to have settled down, according to experts. If not for these hurdles, the growth could have been much higher, said Vivek Bhargava, CEO, DAN Performance Group.

The growth of advertising expenditure until July was around 4 per cent. “We have now revised our own estimates for the year to about 10 per cent on the conservative side. But this means that last quarter should see growth of 16-17 per cent,” said Ashish Bhasin, Chairman & CEO South Asia Dentsu Aegis Network. Following an increase in ad spends during the festive season the “industry is recovering,” Bhasin added.

Even though the going was tough, traditional media like TV and OOH tasted success and registered satisfactory growth during the festive season. The broadcast industry is struggling with 7-8 per cent growth this season. Select broadcasters such as Sony Pictures Network and Disney India have seen healthy growth. “SPN recorded an impressive growth of more than 20 per cent,” said Rohit Gupta, President, Network Sales, Sony Pictures Networks India. He credits this growth to the high performance of the network’s main and FTA channels, like SET, MAX, Sony SAB and Pal and not to the industry. “April onwards, we had a consistent high growth. We saw spending from across all categories whether it’s automobile, consumer goods, mobile handset, telecom or FMCG,” he said.

Similarly, Abhishek Maheshwari, VP & Head, Media Networks & Interactive, Disney India, said that Disney India has seen a growth of 25-30 per cent over regular months on the back of brands who want to make their presence felt in the festive season. The categories mostly included Auto (two and four-wheeler,) consumer goods, mobile manufacturers, FMCG, e-commerce and paints. He observed, “Post the lull the companies saw post demonetisation and GST, there was good buoyancy this festive season where companies stepped out to spend aggressively to gain the lost momentum and market shares.”

The implementation of GST, RERA and a short festive season did not bode well for the OOH sector. “Though all these might prove to be great steps in hindsight, as of now, it has forced every business to relook at their structures forcing a halt in marketing activities,” said Alok Gupta, Director, Graphisads. Despite the low growth of the OOH sector, Gupta is now positive. “However, things have started to look up now as companies have settled down and with govt taking booster steps such as Bank Recapitalisation, one really looks forward to a steep growth curve. Acche din might just be around the corner!” he said.  In fact, as an indicator of the Acche din, one of the leading media buyers bought a significant chunk of the OOH inventory for the festive season, out of fear that OOH inventory may fall short.

The radio sector saw a healthy performance this season. Festival revenues of one of India’s leading radio channels, Radio One, were up by 25 per cent during September and October over July and August. “November will ascertain if the upswing is a consistent one as sales at the clients' end generally seem to be depressed due to GST issues and lowered demand,” said Vineet Singh Hukmani, MD and CEO, 94.3 Radio One.

Brands made use of the festive season to build their image and not just focus on sales related communication. “We see many clients using this time to build their share of voice and market share to get an edge over competition,” said Hukmani.

A similar trend was seen on the digital medium as well, with brands taking the content marketing route to promote their brands. “This time there have been more long format videos and content marketing as opposed to traditional spends on Search, Facebook, etc.” said Bhargava. He added that this strategy works for the digital medium in particular because of targeted advertising.

Of the various media, digital has seen better performance and has become the go-to medium for brands this festive season. The dependence on the digital platform for advertising is surely increasing given the reach that the medium offers. “The reach on digital has become substantial. If you take something like Facebook alone, you can reach around 200 million people. An ad on the YouTube Homepage can reach around 120 million people. In comparison, a full-page ad in a leading newspaper will reach hardly 20 million people,” said Bhargava. Given the benefits the digital medium offers, digital advertising saw a flurry of activity from e-commerce brands, followed by smartphone manufacturers, automotive and BFSI. The growth of the digital advertising sector is higher than that of the overall advertising sector. Bhargava is confident that the digital advertising market as a whole will breach the Rs. 10,000 crore mark this year showing a growth of 40 per cent over last year.

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