Pitch Madison Advertising Report 2021

COVID Causes Mayhem

• ADEX de-grew by 20% in 2020
• Traditional ADEX de-grew even more, by 29%
• ADEX return to what it was in the year 2017

INDIAN ADVERTISING MARKET
OVER LAST 3 YEARS

Indian advertising market over last 3 years got wiped out of the ADEX map with a 82.6% drop. Let’s take a closer look at Q4 and the growth rates achieved in this quarter for individual mediums, as this will give us a clearer indication of what to expect in 2021. It is apparent that Digital and TV have recovered very well and are on a growth path, but one cannot say that for Print, Radio and Outdoor, which has a lot of catching up to do. Cinema will have to start from scratch in 2021, after three almost blank quarters. Many advertisers deserted TV, Print and Radio in Q2 2020, but by Q4 almost all advertisers have returned to the advertising fold. In fact, Radio has attracted 150 additional advertisers in Q4 over Q1.

Within traditional media where we have data covering TV, Print and Radio, it is seen that every category, starting with the largest i.e. FMCG, going down to the smallest i.e. travel and tourism, have spent substantially lower in 2020 than in 2019, except e-commerce which grew by as much at 30% and education which on the back of edTech grew by 9%. Within ecommerce, in addition to Amazon, players in categories like online gaming, food delivery services and mobile wallets were prominent.

And within FMCG, COVID-19 categories like sanitizers, hand wash liquids, disinfecting sprays and multiple other products offering immunity boosters were prominent advertisers, resulting in FMCG category degrowing the least, by only 13% and it increased its share of ADEX from 33% to 38%. Telecom, travel, clothing & fashion and durables de-grew the most.

TELEVISION DESPAIR TO BOOM

While the first three quarters saw TV de-grow by 31% over 2019, Q4’20
grew by 66% over Q3 2020, recording a high 56% growth over Q4 2019.
TV’s share of ADEX increased to 42% from 37% in 2019.

For Television, the year 2020 saw it all, with the mood swinging from
despair to confidence. Slowdown in the first Quarter, collapse in the 2nd
Quarter, no original programming of GEC, repeat of old Doordarshan classics which busted the charts, all time high viewership in news genre, IPL in Q4 and an astounding Q4 that generated 40% of annual TV ADEX and
a growth of 56% over 2019 and a 66% increase over Q3.

While Television ADEX did suffer on account of COVID-19, the drop in ADEX could be considered minor at just 11%, compared to other traditional media’s de-growth. The ego-boosting fact for the Television industry is that TV has grown its share of total ADEX to a high of 42%, consolidating its position as the numero uno medium, arresting a steady decline in share
from 42% in 2011 to 37% in 2019, in one clean sweep.

Looking at it quarter wise, TV ADEX moved like a yo-yo. The year started poorly with Q1 registering an unusual 13% de-growth over Q1 2019, which rose to a 61% de-growth in Q2, thanks to COVID-19. Q3 saw a quick recovery to almost the same level as 2019 but Q4 saw an astounding increase of 56%, thanks to IPL and festival period.

From the table on TV FCT by Quarter, you will see that broadcasters followed an aggressive pricing policy to corner as much of the restricted advertising demand as possible. This proved to be a wise strategy given that
TV amongst traditional media has degrown the least at 11%

DIGITAL SUPERSTAR

Digital is the only medium that grew in 2020 by 10%. Digital is now the No. 2 medium having displaced Print with a share of 31%, up from 23% in 2019.

2020: The year of COVID-19 has dented Digital ADEX’s record of having
grown at 25%+ for the last 10 years and achieved a compound average growth rate of 27% in the last decade. Yet it is to the credit of Digital that while all other media have degrown in the year by 11% to 83%, Digital
ADEX has grown by 10%. With this growth Digital ADEX has reached a value of almost Rs. 17,000 crore and now has a share of 31% of ADEX. It has also climbed one rank in the media listings and displaced Print to become
the No. 2 medium, preceded only by TV.

It is also significant that Digital has grown in three quarters and de-grew only in Q2 by 35% when there was a strict lockdown. This drop of 35% must be seen in comparison to the drop of 79% in Print and 61% in Television in the same quarter.

PRINT ENGINE LOST STEAM

Print ADEX de-grew in all four quarters registering de-growth of 41% and slipped in rank from No. 2 to No. 3.

Print ADEX, the 2nd largest in terms of market share of total ADEX in 2019
has been the biggest casualty in the COVID-19 year. Out of the total Rs.13,450 crore that ADEX lost in 2020, Rs. 8,120 crore was contributed by Print. Print during 2020 lost as much as 40.5% of its ADEX and conceded the No. 2 slot to Digital, coming in at No. 3 position with an ADEX of Rs. 11,925
crore and its share of ADEX now stands at 22%. It conceded its No.1position which it maintained for decades to TV way back in year 2009.

While the drop of as much as 79% in Q2 is understandable considering that newspapers could not be distributed owing to the strict lockdown, it is a cause of concern that Print in Q4 is trailing almost Rs. 750 crore behind Q4
of last year. In fact, Print in 2020 has degrown in all four quarters including Q1 when it degrew by 17% because of a slowing economy.

RADIO’s POOR RECEPTION

Radio ADEX came down dramatically in value, degrowing by 44%. This took Radio ADEX value to what it was in 2014.

Radio ADEX was the third worst affected medium which de-grew by almost 44% and came down in value from Rs. 2,260 crore to just Rs. 1,270 crore. This sharp drop has taken Radio back to the year 2014 when it was Rs. 1,300 crore. With this drop, Radio has also lost 1% market share and now has a share of 2%. Unlike in Outdoor and Cinema where the drop in ADEX is mainly because of drop in footfalls, Radio seems to have suffered despite witnessing a spike in listenership on FM. The reduction is obviously because of lower availability of advertising rupees in the market, because of which advertisers concentrated only on primary media like TV and Digital.

OOH ROAD BLOCK

OOH ADEX de-grew 63% on the back of empty roads due to lockdown. While Q4 showed huge growth of 336% over Q3 2020, normalcy is yet to return.

While empty roads have provided fodder for the keen photographer, such images have proved to be the Waterloo of the Outdoor industry. Even when traffic has recovered to the extent of 90%, advertisers don’t seem to be in a hurry to return to Outdoor as before.

In 2020 OOH ADEX de-grew by as much as 63% to a low of Rs. 1,292 crore and its market share dropped by as much as 3% points from 5% in 2019 to 2% in 2020. OOH has gone back to the value it had achieved 13 years ago in 2007. In the last decade transit media has outpaced the growth of conventional OOH given the modernising of airports, new airports and arrival of metros but 2020 saw a reversal of this trend when conventional OOH market de-grew by 56% but transit media degrew by 82%.

Report By Madison Media

Madison World is a 32 – year old diversified communication group with integrated & specialized services in different areas of communication like Advertising, media Digital, Business Analytics, Out of Home, Rural, Retail, Events, Activations, Entertainment & Sports; Employing about 1,000 communication professionals across India, Sri Lanka, Thailand & Bangladesh.