The ongoing economic uncertainties across the globe, with several countries engaged in active conflicts, have started reflecting their impact on the Indian advertising industry. Despite the Indian GDP projecting a positive growth of 7.3% in the last fiscal, AdEx grew only by 10%, highlighted Madison World Chairperson Sam Balsara at the recent launch of Pitch-Madison Advertising Report 2024. This is opposed to a projected growth of 16% of last year’s forecast.
According to the report, this is the biggest dip in AdEx growth over the past six years, barring 2020-21.
“As we stay in a connected world, the negativity in the Western world will continue to have an impact on India as well,” Balsara emphasised while announcing the growth forecast for FY '24 at a bleak 12%.
The Adex Show of 2023
Apart from the global socio-political turmoil, other factors like inflation, growing prices of raw materials, funding winter for the startup sector, and government policies against online betting companies, etc., also slumped the sector growth in the previous fiscal.
As per the report, the AdEx closed at INR 99038cr. in FY '23, adding just 60% more than INR 15500cr. of the previous year. The quarterly analysis indicates that Q4 was the best performing for the advertising industry riding on the back of sports and festive season. It contributed 31% to the full year and added almost 50% of the annual growth at INR 5000cr., approximately.
The Shaking Media Mix
Digital and OOH stood out with their growth in FY’23, a rather muted year for the advertising industry.
Digital
The AdEx in 2023 re-emphasised the growing power of Digital over other media, despite the medium showing a muted growth in comparison to previous years. It grew only 15% against 50% in 2021 and 35% in 2022. In terms of value, Digital AdEx closed at INR 39714cr.
However, Balsara commented that this data is based on industry-recognised advertisers and does not include the biggest contributors to digital advertising: small-scale businesses running on various social media platforms like saloons, home sales, and housewife-led ventures. He suggested that it would, therefore, be misleading to consider this data as complete.
Regarding channels, e-commerce platforms have been attracting the most advertisers, claiming a 17% share of the digital AdEx pie. Additionally, video spends continues to lead the chart with a 33% share.
Television
Television AdEx dipped for the second year in succession, growing at a blip of 7%. The share of Television in the overall media mix has now dipped to 33% as opposed to 42% in 2020. Hindi satellite mainline and second-line sports were the two major genres, contributing almost 50% of the overall value. Albeit, Hindi satellite marginally de-grew in FCT, while sports increased by 8%.
“The only saving grace for television was the busy sports calendar of the second half that included events like the Asian Games and ICC Cricket World Cup. TV AdEx growth without sports would only be 4%,” Balsara mentioned.
Print
The situation was not any better for print media as well, which could not reach its pre-COVID revenues even after four years. It grew by only 4% in FY’23, closing at INR 19250cr. However, it continues to maintain its share in the media mix at 19%. Hindi and English language publications have contributed over 64% of the total Print advertising space.
Further, the growth space consumed by advertising in Print has grown by 6%, indicating that publishers are now pricing their medium appropriately, ensuring a good ROI for investors.
Cinema
Speaking of Cinema, Balsara mentioned that this medium, which was projected to grow at 75% could only rise by 36% in 2023, despite several blockbuster movies swarming the theatres.
OOH
While most traditional media is slumping, out-of-home (OOH) seems to be getting favoured by the advertisers. The medium grew by 13%, closing at Rs 4,140 crore, claiming 4% of the overall media pie.
Radio too reached its pre-pandemic ad revenues, clocking in a growth of 2%. It earned Rs 2,272 crore in advertising revenue in FY’23.
What’s In For 2024
Summing up the report, Balsara noted that while the AdEx growth is projected to be muted, there are a lot of opportunities for the advertising industry to make the most of it, including election results, expected reforms after the elections, and growth in sectors like FMCG and auto. For media, digital is expected to grow by a modest 17%, TV by 8%, Print by 7%, Radio by 12%, Cinema by 35%, and Outdoor by 15%.
