In what is being hailed as the second highest addition to advertising expenditure (Adex) in a single year in the entire last decade, advertising expenditure in India has soared from Rs 60,908 crore to Rs 67,603 crore, clocking an additional Rs 6,695 crore or 11 per cent.
Despite many headwinds, Adex in India is set to grow dramatically over the next five years, with India already growing at twice the rate of global Adex, with the latter pegged at 5.4 per cent.
Releasing the Pitch-Madison Advertising report at an event in Mumbai late evening, Sam Balsara, Chairman, Madison World, sounded optimistic about the next few years. "While 2019 has been a tumultuous year for Adex, Adex is bound to grow dramatically over the next five years given that we are one of the larger growing economies of the world and clocking twice the rate of global Adex (11 per cent versus 5.4 per cent)."
Speaking to Business Line, he said India’s contribution to global Adex is currently under 2 per cent (1.9 per cent) and is bound to go up. "Advertisers need to experiment more with media and do things differently to harness the power of media for brands. There is a same-ness in what most advertisers do; like with TV, a 30-second commercial with a blast for 25-days. We need to do different things. Advertisers are scared to experiment, but it is high time we junk old strategies and bravely take on something new. Media works best when there is some disruption," he said, calling for unusual marketing tactics.
The Adex growth rate of 11 per cent in 2019 is lower than Madison's mid-year projection of 13.4 percent and last year’s growth of 15 percent.
While 56 per cent of this growth has been contributed by Digital, which has expectedly grown by as much as 32 per cent, the report noted traditional media has grown by a mere 6 per cent.
The report forecasts total Adex to move up to Rs 74,650 crore, an increase of Rs 7,048 crore, of which Rs 4,387 crore or 62 per cent will be contributed by Digital.
"We have seen that even in a not so high-growth year, pole events continue to do well and attract advertisers' attention. Expect IPL and ICC T20 World Cup to pull in substantial monies. This, combined with a good festive season in Q4 and good spending by OTT, mobile wallet brands and e-commerce platforms, should make our growth estimate of 10.4 per cent for Adex 2020 come true," said Balsara.
Indian Adex would then have added Rs 21,512 crore in three years by the end of 2020, registering a growth of 40 percent from 2017 to 2020.
TV, the largest medium, has grown at 8 per cent, showed the report, but all others are at sub-5 per cent, with the exception of Cinema, which has grown well for the last two years.
TV still continues to be the largest contributor to Adex with 37.4 per cent share, followed by Print at 29.7 per cent, Digital at 22.9 percent, Outdoor at 5.2 per cent, Radio at 3.3 per cent and Cinema at 1.5 per cent.
At the event, it was pointed out that digital has grown in the last decade from Rs 1,030 crore to Rs 15,467 crore, and now accounts for 23 percent of Adex.
The report showed digital has been growing unabated for the last 10 years. It grew again in 2019 by 32 per cent and gained 3 per cent share points from TV and Print which lost 1 per cent and 2 per cent share points, respectively.
All mediums except Digital and Cinema appear to have lost share, according to the report.
Balsara said a quarter-wise analysis showed that unlike in most years, "when Q4 shows a blip because of the festive season, this year Q2 showed a blip on the back of IPL, World Cup and General Elections. In fact, Q3 and Q4 showed a de-growth of 3 per cent and 7 per cent, respectively."
The Chairman added that a wide variation of growth rates across mediums was expected, with Digital medium leading the growth at 28.4 per cent and ending the year with 27 per cent share of Adex at Rs 19,854 crore.
The forecast for 2020 is muted. While TV is expected to continue to be the largest medium with a 36 per cent share of Adex, it will have a subdued growth rate of 6.8 per cent. Print is expected to lose 3 percentage points in terms of share of Adex and end up with a 27 per cent share, registering a 2 per cent growth. Radio and Outdoor are expected to grow at 5 per cent and 6 per cent respectively, and maintain their share at 3 percent and 5 per cent.