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Published on: Sept. 6, 2020, 11:59 p.m.
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  • Digital is the only medium to have gained some momentum and growth, Picture credit: Pixabay

By Arzoo Dina

An already sluggish economy coupled with the impact of Covid-19, has led to some of the worst months on record for Indian advertising. These are some of the key findings in the mid-year review of the PITCH-Madison Advertising Report (2020).

According to the report, Ad Expenditure in India collapsed by an unprecedented 65 per cent in Q2 this year, a drop of nearly Rs14,000 crore in absolute terms. This is a steep drop from Rs35,110 crore in H1 2019 to Rs21,298 crore in H1 2020, highlighting the far-reaching effects of the pandemic.

However, it is also worth noting that AdEx had contracted by about 8 per cent in the first half of this year, owing to a slowdown in the economy. In addition, the previous year saw IPL, elections and the ICC World Cup contribute about Rs3,000 crore, during Q2 of 2019.

According to the report, traditional media has been the worst hit, de-growing by 47 per cent in H1 2020. Television, which makes up the largest share of the advertising pie, saw a significant reduction in spends. The months of April and May were when TV suffered the most, despite breaking records in viewership and time spent by audience.

Even lucrative discounts offered by broadcasters failed to bring advertisers back and saw more than half the usual number of advertisers disappear from Print and Radio and a quarter from TV, compared to normal times, the report says.

Similarly, during the April-June quarter, Print de-grew by almost 80 per cent, Radio by 90 per cent and Cinema and OOH recorded virtually no billings, owing to the closure of theatres and empty roads. Digital is the only medium to have gained some momentum and growth, both in H1’20 and Q2’20 and now accounts for as much as 30 per cent share of AdEx – the second largest medium after TV.

There’s also been a shift in categories. Telecom, Travel, Clothing, Fashion, and Durables were the worst hit. FMCG, predictably showed up to be the most resilient and its share moved up to 38 per cent, compared to 33 per cent it had in the full year 2019, the report highlights.

However, industry experts are optimistic that the tide will turn and consumer demand will see an uptick, on the back of the festive season, coupled with big-ticket events like IPL, and TV properties such as KBC and Big Boss.

According to Sam Balsara, chairman, Madison World, expectations are that Q4 will be the largest quarter in terms of spends this year. “Compared to last year, brands may just spend a little more, especially those who have been off advertising during April-September,” he says, adding that FMCG, Auto, Edu-tech and E-Commerce will continue to advertise. “We should also see a comeback for Retail, Clothing and Fashion, Jewellery, Watches, and Consumer Durables.”
 
Festive hope

The report forecasts that AdEx is likely to recover in H2 this year and grow at a rate of 60 to 72 per cent of the collapsed H1, aided by the festive season, which advertisers are likely to take advantage of after a lean period. As such, the second half of 2020 could see AdEx clocking anywhere between Rs34,300 crore and Rs36,600 crore, taking the full year 2020 AdEx to anywhere between Rs55,000- Rs58,000 crore.

According to consumer durables firm, Panasonic India, their festive campaigns are already underway, starting with Onam. “We are hopeful that the festive season will help recover losses incurred in the last few months due to the pandemic,” says Shirish Agarwal, head, brand and marketing communications, Panasonic India.

“We’ve aligned our offers and product planning with the current market sentiments,” he says, adding that nowadays, consumers are opting for appliances that offer better value proposition in the long-run. “For instance, we’re seeing that individuals prefer large screen TVs over smartphones to watch content, thus propelling a demand for the same.”

For Panasonic, digital will play a key role in their communication efforts, along with TV to broaden their reach, and their festive campaigns will be supported by a mix of ATL and BTL spends.

Online grocery firm, Grofers, is also optimistic about the festive quarter. “As we move closer to Navratri and Diwali, compensatory shopping will kick in as a result of pent-up demand,” says Prashant Verma, head of marketing, Grofers. “We’ve witnessed an increase in digital media consumption, and keeping that in mind, digital has now taken a central role in our media mix with 70 per cent share,” he notes, referring to the shift towards online grocery shopping.

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