Dramatic changes in Indian Ad Industry

19 Aug,2020



Editor’s Note: The Pitch Madison Advertising Report 2020 is a significant industry milestone held every year. Although MxMIndia belongs to the same space as the Exchange4media group-owned Pitch magazine, we believe the report is an industry property and are glad that the two entities – Pitch and Madison – are doing this for many years. Our report very clearly acknowledges the association of both Pitch and Madison, and have hence not called it the Madison Advertising Report, but the Pitch Madison Advertising Report 2020, as it should be.


By Indrani Sen


The Pitch Madison Advertising Report 2020 presented its mid-year review yesterday and revealed the extent of damage done by the pandemic to Indian ad industry.


A comparison with 2019 shows that the overall AdEx lost INR 14,000 crore and declined by 39% in H1, the first half of 2020 due to the effects of Covid-19. A break up of the first half by two quarters showed that Q1 had an 8% decline in the overall AdEx in the pre-Lockdown period due to the slowing down of Indian economy. In Q2, during the complete lockdown in April and May, the overall AdEx dropped into almost a bottomless pit. The fall was partially arrested with the unlocking starting in phases from June 1, but overall AdEx still declined by 65% in Q2.


Citing the trends of recovery of TV and Digital advertising in June and July, PMAR has predicted 60% -72% recovery of overall AdEx in H2, the second half of 2020 boosted by the festive season, revival of IPL, big ticket TV shows like KBC and Big Boss. The estimated recovery of AdEx in H2, is expected to arrest de-growth of overall AdEx in 2020 and contain it within a range of -14% to -18% as shown in the chart below.


Source: Pitch Madison Advertising Report 2020 Midterm Review


While TV and Digital are set on getting back to normalcy, Print is lagging far behind and Radio, Cinema and OOH are yet to show signs of regaining normalcy. The report has refrained from calculating a specific growth number in the forecast for 2020, instead has indicated a range for the AdEx value of each sector as well as the overall Ad Industry as reflected in the above chart. PMAR needs to be congratulated on their commendable efforts of mapping the effects of COVID 19 on Indian Ad Industry in the current situation.


As per the usual format of reporting, PMAR has presented a detailed picture of TV, Digital, Print, Radio, OOH and Cinema and an analysis of advertisers active during the first two quarters of 2020 across different media. Among traditional media TV suffered the least damage with TV AdEx dropping by -43% in H1 ‘20 and retained 38% share of the advertising pie. Print AdEx dropped by 51% in H1’20 and it had to concede the number two position to Digital in terms of share in the advertising pie which dropped to 25%.  Adex dropped respectively by 52% in Radio, 55% in OOH and 52% in cinema in H1 ’20.  Digital had only a minor contraction of just 7% in H1 ’20 and its share in the advertising pie went up to 30%.


As far advertisers are concerned, more than half disappeared from Print and Radio during the first half of 2020. TV also lost a quarter of its regular advertisers. 13 new advertisers entered the list of Top 50 advertisers which accounted for 31% of the overall AdEx. HLL topped the list with INR 1300 to 1500 crores advertising in H1 ’20. A wide gap was noticed among HLL and Procter & Gamble who ranked second with an ad spend of INR 250 to 350 crores.


The Indian ad industry has never experienced such a decline. If we look at the last two decades, we find the industry growing in leaps and bounds during the first 8 years of this century with year on year double digit growth. In earlier PMAR reports we saw the growth rate of overall AdEx dropping to -8.9% in 2009 from 18.9% in 2008 as the international financial crisis triggered off by the sub-prime mortgage problem in the US led to recession in many countries and cast a shadow also on our economy. However, the overall industry recovered quickly with a whopping 27.9% growth in 2010. During the current decade there has been ups and downs in the performance of the overall AdEx but we never saw actual de-growth of our Ad Industry. According to PMAR 2020 Midyear Review, COVID 19 may set the industry back by 2 to 3 years. It is unlikely that the industry will recover as quickly as it did in 2010. A lot depends on how the government can control further spread of the pandemic and how soon vaccine for coronavirus can be available for Indian masses.


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