India to be fastest-growing ad market in 2021: Pitch Madison Report

The Pitch Madison Advertising Report (PMAR), 2021 has been unveiled and it predicts a 26% growth for Advertising Expenditure (ADEX) in 2021, taking advertising expenditure to Rs. 68,325 crore (US$ 9.41 billion), almost the same level as 2019. After a particularly dull year, commercial activities have returned with a vengeance and the report estimates that India will be the fastest-growing advertising market in the world followed by UK (14.7%) and Australia (13.2%) going by WARC estimate of growth of global markets.

Analysis of current economic indicators shows that slowdown is truly behind us and we are onto the path of a robust recovery in the economy. The PMAR expects a wide variation in growth rates across different mediums with Digital growing by 25%, adding Rs. 4,226 crore (US$ 582.28 million) to its kitty. In traditional media, Print is expected to add as much as Rs. 4,175 crore (US$ 582.28 million) and achieve a growth rate of 35%, followed by Outdoor which should add Rs. 1,158 crore (US$ 159.55 million) resulting in a growth of 90%. Cinema is to achieve a growth rate of 161%, which will take Cinema ADEX to Rs. 475 crore (US$ 65.45 million), which is about half of the 2019 number. Radio is touted to achieve a growth rate of 38% in 2021. This will take Radio ADEX to Rs. 1,750 crore (US$ 241.12 million). TV ADEX is set to grow by 17% to close at Rs. 26,350 crore (US$ 3.63 billion). One must remember that these high growth rates are projected for Print, Outdoor and Radio because of high de-growth rates for these media in 2020.

Mr. Sam Balsara, Chairman and Managing Director, Madison World, while unveiling the report, said, “Last year COVID-19 caused havoc to our economy; it is no surprise that ADEX could not remain insulated, it dropped by 20% in 2020 over 2019. Also, almost 1/3 of the traditional ADEX got wiped off in 2020, i.e. it dropped by 29% compared to 2019. COVID-19 damage to Print has been massive and it has seen a degrowth of 41% losing Rs. 8,120 crore (US$ 1.12 billion) out of the total Rs. 13,450 crore (US$ 1.85 billion) that ADEX lost. On the other hand, TV got an ego boost with TV’s share of ADEX increasing to 42% from 37% in 2019. Digital was the only medium to have witnessed a growth in 2020, Digital ADEX has grown by 10% to reach Rs. 17000 crore (US$ 2.34 billion). We do not expect Cinema, Radio, and OOH to return to their 2019 levels."

It does appear that COVID-19’s negative impact on Indian ADEX has been severe, compared to many other countries of the world including the US, by far the largest ADEX market. As per the estimates, in 2020, total ADEX has degrown by 20% and traditional ADEX by as much as 29%. This level of degrowth was predicted in PMAR’s mid-year report released in August 2020. 

In absolute terms, ADEX has degrown from Rs. 67,603 crore (US$ 9.31 billion) to Rs. 54,151 crore (US$ 7.46 billion), a drop of a whopping Rs. 13,452 crore (US$ 1.85 billion), the highest ever drop in one year in the history of Indian ADEX. The last time Indian ADEX has seen any negative growth was way back in 2009 when on account of the Lehman crisis Indian ADEX had degrown by 9%. At Rs. 54,151 crore (US$ 7.46 billion) ADEX today has gone back to the level it had achieved in 2017 and if you look at only traditional ADEX, then it has gone back to the level that we achieved five years ago in 2015.

Top 50 advertisers spend 86% (LY 78%) of their budgets on TV and Digital establishing that these are the two dominant mediums of ADEX, and their relative size also confirms this.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.