Indian ad industry nears 100k cr milestone

21 Feb,2022

 

 

By Indrani Sen

 

Indrani SenLast week, both GroupM’s This Year Next Year (TYNY) and Madisons Media’s Pitch Madison Advertising Report (PMAR) got released and their basic findings have already been reported by all business and trade media. The general mood in the advertising industry is exuberant as both the reports have confirmed that AdEX zoomed in 2021, by 37% as per PMAR and by 26.5% as per TYNY in spite of the third wave of the pandemic. In 2021, India was the fastest growing market in the top 10 countries, ranking 9 globally and ranking 5 on incremental ad spend predicted for 2022.

 

The current year also promises to be a good year for Indian ad industry with PMAR predicting 20% growth and TYNY predicting 22% growth in adspend in 2022 over 2021. However, this year the two reports raises a paradox, will the ad industry cross INR 100,000 crore milestone in 2022 as predicted by TYNY or touch 90,000 crore as predicted by PMAR? It seems that we will be celebrating the milestone of achieving INR 100,000 crore ad expenditure twice, once in 2022 by GroupM, its constituent agencies and clients and once again in 2023 by another large part of the industry who prefers to use PMAR.

 

It is acceptable that two or more research studies done by different agencies may yield different estimates of adspends by media and as long as the trends are the same, all such estimates can be used by the industry. Indian media, advertisers and agencies have learned to live with different estimates for the industry size, growth rates as well as predictions from different sources including TYNY and PMAR. However, as the difference of almost INR 21,000 crore between the estimates for 2022 in the two reports is huge, it may be prudent to analyse the macro level statistics of PMAR and TYNY to find out the source of such huge difference.

 

As digital, TV and print account for a total share of 94% to 96% of the total ad expenditure in both the reports, a review of the adspend across these three media will suffice for finding out the sources of the difference in estimates.

 

Both GroupM and Madison Media have reported digital as the fastest growing media in 2021 and a continuity in the momentum of growth in 2022. In TYNY, digital adspends has equalled the TV adspends in 2021, where as in PMAR the digital adspends will equal or cross TV adspend in 2022.  Over the last three years, TYNY has been consistently reporting about INR 10,000 crore more in digital media ad spend than PMAR. In 2022 the ad spend in digital media is estimated to be INR 15,533 crore higher in TYNY than in PMAR.

 

 

Similarly, in case of TV adspend, the estimate by TYNY was higher than TYNY by INR 10,000 crore in 2019, which reduced to INR 8000 crore in 2020 and 2021. However, in the estimate for 2022, the same has again become higher by INR 10,000 crore. So, the estimates for digital and TV taken together account for a difference of INR 25000 crore between TYNY and PMAR in their predictions of 2022.

 

 

When it comes to print adspend, the table is turned as PMAR has been consistently estimating higher spends in print than TYNY. In 2022, PMAR’s prediction for print ad spend is INR 6000 crore higher than that of TYNY. So, by combining print with digital and TV and other traditional media, the difference of INR 25000 crore gets reduced to INR 21000 crore.

 

Source: TYNY 2022 & PMAR 2022

 

It seems a bit unfair that TYNY has condemned print adspends in India to almost zero growth in 2022. As TYNY is done as a global report, has this estimate for Indian print ad spend been influenced by the global scenario where in most countries print ad spends have been steadily declining for years?

 

I have written about the difference in the findings of TYNY and PMAR earlier in www.mxmindia.com. I know that we will never really get to know the reasons for such huge differences between the estimates of TYNY and PMAR, but it is becoming increasingly difficult to explain the reasons for the same to students of media management in a classroom as there is a danger that they may get confused and lose faith in media research.

 

 

Read past commentary by Indrani Sen at:


https://www.mxmindia.com/2021/02/so-how-do-the-groupm-madison-forecasts-compare/

https://www.mxmindia.com/2020/02/a-roller-coaster-ride-of-adspends/

https://www.mxmindia.com/2020/02/well-pitched-delivery/

https://www.mxmindia.com/2019/02/indian-ad-industry-are-happy-times-really-here-again/

https://www.mxmindia.com/2018/02/indrani-sen-mind-the-tv-adex-gap/

https://www.mxmindia.com/2017/02/what-is-the-real-size-of-indian-ad-industry/

https://www.mxmindia.com/2016/02/indrani-sen-boomtime-for-media-a-review-of-the-pitch-madison-advertising-report-2016/

 

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