Ad industry hopes losses will reverse in festive season

Ad industry hopes losses will reverse in festive season


According to a recent report by Dentsu International, adspend is expected to grow by 10.8% in 2021 to reach $9 billionAccording to a recent report by Dentsu International, adspend is expected to grow by 10.8% in 2021 to reach $9 billion

India’s television, print and digital advertising revenues are showing signs of revival after declining by almost 20% in 2020. According to a recent report by Dentsu International, adspend is expected to grow by 10.8% in 2021 to reach $9 billion.

Industry executives are hopeful that they will make up for the impact of the Covid-19 second wave in the upcoming festive season.

“The ICC Men’s T20 World Cup, part 2 of IPL 2021, and other impact properties on television will draw advertising expenditure from brands. We are expecting adspend during the festive season this year to definitely exceed 2020 levels,” said Anand Bhadkamkar, CEO, Dentsu India.

About 40% of annual adspend takes place during the festive season.

During the April-June quarter, the industry suffered a set-back. According to TAM data, ad volume on television dipped in May and June by 13% and 17%, respectively, in comparison to December 2020.

In the first two weeks of July, ad volume has grown over the previous two months and was 9% less than December 2020 levels.

Despite the headwinds, the first half of 2021 has registered an increase in ad volumes over 2019. BARC India has found that advertising volume in H1 2021 is 12% greater than H1 2019. Volume of ads by FMCG brands in the first half of the year is 40% more than H1 2019.

Rohit Gupta, chief revenue officer — ad sales, Sony Pictures Networks India, observed that just like the festive season of 2020 revived adspend, this year, the August to October period is likely to bring vigour back to the industry. “All planned product launches are going ahead and industries like automotive are not holding back anymore,” he added. According to BARC India, the auto sector registered 74% growth in ad volume in June 2021 over June 2020. The TV ratings body found that with 3.94 million seconds of advertising in June 2021, the auto sector is at par with the ad volumes it registered in June 2019.

The pandemic has acted as an accelerator for digital adoption, resulting in the universe of users growing in the last 16 months. Jehil Thakkar, partner, Deloitte India, said, “The extent of use of digital services has doubled among existing users and new users have also begun using the medium.” The inclusion of regional language feeds in social media and OTT platforms dedicated to non-Hindi and non-English content have aided growth of the medium, said analysts.

Dentsu estimates the share of digital advertising in the overall ad pie will grow from 20% in 2019 to 29.4% in 2021 and reach 32.7% by the end of 2022. As per TAM, advertising volume on the digital medium has been steadily growing over the last six months. In June and July 2021, the number of ad insertions has grown about 25% over December 2020.

E-commerce is among the major drivers of adspend on digital. A number of direct-to-consumer brands have cropped up and several traditional brands have gone D2C, too. “Because of this, companies not only want to build brands through creative advertising via social media but also drive sales through performance marketing online,” said Chetan Asher, co-founder and CEO, Tonic Worldwide.

Read Also: Indian consumers have shown an intent to increase discretionary spends: Deloitte

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