Sharing perspectives on Pitch Madison Advertising Mid-Year Report, experts said while Digital & TV are leading in the recovery path, IPL and festive season will mark beginning of normalcy for AdEx
The global pandemic of COVID-19 has left most markets with a dent. But with the nation gradually ‘unlocking’ itself and big ticket events like the IPL set to coincide with the festive season, the markets are much hopeful of a revival in the second half of the year.
Keeping this in context, the Pitch Madison Advertising Mid-Year Report (PMAR) 2020, unveiled on Tuesday by Sam Balsara, Chairman and MD of Madison World, says AdEx will recover in H2 2020 and grow at a dramatic rate of 60-72% of the collapsed H1 or grow 6-13% when compared to H2 ’19. This will lead to overall AdEx in 2020 contracting by 14-18%, and its value to be pessimistically just over the 2017 level or optimistically a little below the 2018 level, the report has noted.
According to the report, digital suffered a minor contraction of 7%, even as all the other mediums suffered a drop of 40-55%. It has also turned to be the only medium to grow by 16% in Q1 2020 when all others registered a double-digit drop. In absolute terms, digital AdEx in H1 ’20 stood at Rs 6,472 crore, commanding a 30% share of the AdEx.
Sharing more insights was Neena Dasgupta, CEO, and Director, Zirca Digital Solutions who said that the pandemic and the consequent lockdown has, in many ways, only accelerated the shift towards digital. “As audiences have flocked even faster than before to digital channels, so have brands and budgets. One clear indication of this is the emergence of new content consumption patterns – from a new prime time to collective viewing, greater uptake of video and voice, etc. No wonder the media mix and budget spreads are being transformed permanently. This is an inflection point – on its other side lies a whole new marketing realm that will be ruled by digital. Marketers must embrace it or perish.”
According to Sudhir Nair, Co-founder & CEO, 21N78E, “While the report shows a drop in APJ numbers on digital, it also tells you the growth in key categories which helped in arresting the drop even further. The trendsetting is done by the JFM numbers which registered a 30% growth in digital media. COVID-19 has ensured a significant shift in media consumption with digital being the biggest gainer. As businesses open up and the wheel starts turning on all economic fronts, the shift to digital media consumption and thereby its share in advertising (30%) as witnessed in APJ is here to stay. However, I do believe that the added digital inventory will also result in media cost rationalization. We will witness a quantum jump in digital advertising because businesses will want to connect with consumers where they are in absolute numbers and not basis perceived assumptions.”
Providing more perspective, Sandeep Sreekumar, MD, Media Moments said, “The report corroborates how badly COVID-19 infected businesses. The lockdown had a direct impact on the demands for any product or services and the kneejerk reaction was a massive pullback in marketing spends. The reluctance to spend on any inventory (offline/ online) indicates this. Having said that, we feel that the proclivity towards ad spends will continue leaning towards digital for at least another quarter or two before other mediums come back into the foreplay. Though the published report highlights our fears, it also affirms that Digital businesses have just weathered the storm and will now make the way for a sharper trajectory.”
TV: The next contender to return back to normalcy in H2 2020
With regards to the report’s findings for the TV business, Pawan Jailkhani, Chief Revenue Officer, 9X Media says, “There was an impact on TV obviously but if we compare TV to digital, the latter’s recovery was quite faster. Even in the report, Sam Balsara said that digital’s recovery has been in a V-shape and the second-best recovery has been on TV. I completely agree we can see that traction now happening and the recovery happening faster on TV than other media except digital. If we look at the last Pitch Madison report, which was unveiled in February, this year no one anticipated that COVID-19 would happen. Leaving aside the COVID year, it has been more or less quite accurate actually. We have now factored COVID and we will still be better if the industry recovers in the second half, the way Madison has reported.”
“There have been multiple challenges in terms of climate, distribution, lockdown and the health crisis. India’s GDP too is de-growing. Even if we achieve the growth that Madison has predicted, it will be a good recovery, even for TV.” Jailkhani added.
IPL & Festive Season: Formula for AdEx recovery
With the festive season almost here, the Pitch-Madison report does bring a glimmer of hope.
Dheeraj Sinha, Managing Director & Chief Strategy Officer, South Asia, Leo Burnett, feels the festive quarter will bring most categories back into the business leading them to up their advertising game. “As we head into the festive season, everyone hopes that we will make up (at least partially) for the loss of revenue in the coming quarter. I sense that there will be an uptick in the consumption curve, though we don’t know the quantum of that uptick. It’s fair to assume that businesses are getting ready to join the recovery curve. Overall, the festive season will attract most categories to capitalize on the pent-up demand and advertise,” Sinha explained.
To be sure, the report does show a glimmer of hope as TV and Digital seem to be inching towards normalcy. They are expected to perform well again, aided by the launch of IPL. Industry observers were unanimous that the IPL clashing with the festive season will bring some level of bounce-back in ad spending.
Ajay Ravindran- National Planning Lead- India, VMLY&R notes, “Most advertisers have spent very little on media in 2020 so far. Brands like Britannia and Colgate have posted massive profitability figures partly attributable to the savings on media budgets. IPL is a good time to start reinvesting for them, and its simple supply-demand dynamic that might be leading to this inflation. IPL this year will coincide with a part of the festive season, which advertisers hope will lead to a revival of customer sentiment.”
Moreover, Saket Dandotia, COO, and Co-Founder, Toch, also points out that brands have not spent on major advertising this year and are likely to spend big on IPL which will mark the beginning of normalcy in terms of AdEx in some way. “While brands haven’t made major decisions for their ad expenditure or investments yet, the onset of the festive season alongside IPL will change that. Starting with Ganesh Chaturthi till Diwali, there will be great opportunities for brands to get the right audience and catch eyeballs regardless of the increase in expense percentile.”
OOH: A slow and steady progress
According to the Pitch Madison report, Outdoor registered a drop of 13% and overall OOH advertising stood at Rs 760 crore in H1 ’20.
However, July has seen signs of recovery, noted Jayesh Yagnik, CEO, MOMS Outdoor Media Solutions. “The Pitch Madison report has shown a very realistic picture of the months of April and May which have adversely affected the OOH industry. Having said that, we saw signs of recovery in the month of July with a 100% growth in investments over June. Madison has also recently launched the upgradation of the traffic count tool that clearly shows a major growth in mobility across markets. We all have witnessed heavy to very heavy traffic snarls across metro cities. Added hygiene has forced people to use own vehicles as compared to public transport, leading to a lot of people being on the roads. With the pre-festive and festive season around the corner, we are quite optimistic that brands will again consider OOH as one of the vital ways of communication.”
Sharing more perspective, Yagnik said: “We are getting into the festive period where brands would look for space in OOH to get noticed. As they say, advertising and brand building cannot be turned on or off with a switch of a button. All brands keep the consumer at the center and are aware that once they lose the market share it’s very difficult to regain the same. We, at Madison, are quite optimistic that brands will be back with a bang on OOH.”