Pitch Madison Advertising Report: Digital AdEx to grow by 30% in 2022

The Pitch Madison Advertising Report, 2022, unveiled on Wednesday predicts a 20% growth for ADEX in 2022, taking the advertising expenditure to almost Rs 90,000 crore. After battling two waves of Covid in the last two years, commercial activities have returned with a vengeance and the report estimates that India will continue to be the fastest-growing advertising market in the world followed by Russia at 14%, the US at 13% and China at 11% going by WARC estimate of growth of global markets. Global AdEx is estimated to grow at 11%.

Analysis of macro factors, many media and industry-related events shows that the Covid impact on the economy has already started fading and we are onto the path of a robust recovery. The PMAR expects a wide variation in growth rates across different mediums with Digital growing by 30%, adding Rs 33,070 crore to its kitty.

In traditional media, Print is expected to add as much as Rs 18,750 crore and achieve a growth rate of 13%, followed by Outdoor which should add Rs 2,955 crore resulting in a growth of 36%. Cinema is to achieve a growth rate of 267%, which will take Cinema AdEx to Rs 500 crore. This is half of what cinema advertising was during pre-Covid levels in 2019.

Radio is touted to achieve a growth rate of 10% in 2022. This will take Radio AdEx to Rs. 1,910 crore. TV AdEx is set to grow by 14% to close at Rs. 32,100 crore. 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.

The report was presented by ABP News. Colors Marathi and Yahoo were the Co-Powered By Partners while Xapads was the Lanyard Partner. GNT was the Co-Partner Sponsor for the event.

Sam Balsara, Chairman and Managing Director, Madison World, while unveiling the report, said, "While we had forecasted a 20% growth in AdEx in 2022, we were surprised to see the industry growing by 37% in the last year. In fact, not just in India, we saw advertisers spending money with vengeance. India remained the fastest growing advertising market."

"While digital advertising grew more than 60% over 2019, traditional advertising saw a dip of 6% in 2021 over 2019. TV was the only traditional medium that surpassed the pre-Covid revenues. A number of cricketing tournaments and reality shows have contributed to this growth. For 2022, after carefully considering multiple micro and macro trends globally, we forecast a 20% growth in the overall AdEx, taking the Indian advertising industry’s value to 90,000 crores. India will remain the fastest-growing advertising market, followed by Russia (14%), the USA (13%), and China (11%). While we expect traditional AdEx to grow by 15%, digital will be growing by 30%. In fact, digital might surpass television as the largest advertising medium. It is expected to grow by eight thousand crores to reach 33 thousand crores in valuation over 2022," he said.

"I would advise the advertisers to take advantage of the evolved digital infrastructure for distribution and advertising to prepare for the future growth and to invest in building their own D2C channels. In our view, BARC under reports the HD homes," he added.

Please find the detailed report here: https://e4mevents.com/pitch-madison-advertising-report-2022/

Following are the highlights from the report:

Boom Time for TV

TV AdEx put in a spectacular performance, registering a high spend of Rs 28,151 crore which represents a 25% growth in 2021, preceded by a 11% de-growth in 2020. TV is the only traditional medium that has comfortably surpassed the 2019 number of Rs. 25,291 crore by as much as 11%. While Q1 started softly with a de-growth of minus 6% over 2019, each subsequent quarter has gained steam with TV AdEx growing in size. Q3 and Q4 of 2021 registered a sharp increase of 35% and 58% over respective quarters of 2019. Q4 marginally surpassed the high base of the corresponding quarter in 2020. This low growth is because Q4 2020 had the full IPL, whereas Q4 2021 had only half of IPL which started in Q2 but got suspended and resumed in Q4. FMCG, E-Commerce and Education were the biggest contributors to the TV AdEx. However, FMCG, the most dominant sector with a share of 51% in 2020, lost as much as five percentage points and was down to 46%. 

Digital: Superstar

In 2021, Digital has grown by a phenomenal 50% taking Digital AdEx to Rs 25,438 crore with a share of 34%, just 4 percentage points lower than the largest medium TV. The last time Digital grew by 50% was way back in 2012, when it added just Rs 750 crore, but in 2021 it has added almost Rs 8,500 crore. In the last 10 years, Digital has grown at a compounded annual growth rate of 27%. Even Covid could not dent its onward march and it grew by 10% in 2020, when all other mediums de-grew. With the festival and resumption of the IPL season, Q4 was the largest quarter, where Digital AdEx touched almost Rs 10,000 crore and contributed 39% to the full year. Q2 contributed the least at 14%, because of Covid wave 2. In terms of verticals, Video contributed the highest with a total share of 29%, followed by Social & Display at almost 20% each. E-commerce and Search now contribute 16% each to the overall digital pie. In terms of growth rate, E-commerce has grown significantly by as much as 50%. Display, Video and Search have also grown substantially at 30%+.

Renaissance In Print

2021 was kind to Print, when Print AdEx registered a 39% growth, following a sharp 41% decline in 2020. Unfortunately, this steep growth does not make up for the sharp decline in 2020 and Print AdEx in 2021 is at the same level as it had reached way back in 2015. An encouraging trend noticed in 2021 is that Print volume in terms of CC has also gone up by 31% with both English and Hindi publications having marginally increased their CC share. Quarter 2 was severely depressed because of Covid Wave 2, but Q3 almost matched up to volumes of the same Quarter of 2019. Infact, in Q4, Print volume surpassed that of Q4 in 2019. Growth rates in all Quarters are predictably very good in CC terms, compared to Covid year 2020. But Print Adex 2021 could not match up to Print Adex of 2019 and shows a 16% drop in volume compared to the pre-Covid year. English and Hindi publications put together, contribute to 63% of total Adex volume. English publications have been the highest gainer in terms of Ad volume and grew 40% over 2020. Hindi publications, which are the largest volume contributors, also grew by 30%, Telugu by 37%, Assamese & Marathi by 33% and Bengali by 27%. All languages grew, the least to have grown are Kannada, Gujarati and Punjabi at around 18-19%.

Radio: Strong Waves of Recovery

Radio saw a 36% increase in spend (followed by a 44% de-growth in 2020). Radio Adex has failed to recover fully and the estimation of Rs. 1,733 crore in 2021 takes Radio back to the year 2016, when it had registered a spend of Rs.1,749 crore. In terms of share, Radio Adex which had registered 4% in the years 2015, 2016 and 2017, now stands at only 2%, which is similar to what it achieved in 2020. Almost all Radio operators to increase their revenue base, have now started looking at adjacent areas to augment their FCT base revenue. Digital engagement, content and newer distribution channels are some of the areas being focussed upon. Resumption of economic activities in Tier II and Tier III markets also attracted many local advertisers to Radio.

OOH 2021: Traffic Jam Clears

Out-of-Home has bounced back in 2021 with a 69% increase over 2020, but falls way short of the figures achieved in pre-Covid 2019. According to the report, Rs. 2,178 crore were spent in OOH way below the Rs. 3,495 crore spent in 2019, but substantially higher than Rs. 1,292 crore spent in 2020. In terms of Share, from a steady share of 6% which it enjoyed for many years till 2019, OOH has slipped to 3%, but has gained 1% share over 2020. Conventional OOH market grew at 63%, but Transit Media grew by almost 100% in 2021. However, when compared with the year 2019, Conventional OOH market degrew at 28% and Transit Media degrew by 63%. Digital OOH in India, in keeping with global trends is beginning to take root. In 2021 there were 60,000 screens, up from 55,000 in 2020. DOOH spends also moved up phenomenally from Rs. 50 crore to 300 crore in 2021. Digital OOH now has a share of 13.77%, but is far below the global average of 40%. 70% of OOH spends came in the second half of 2021. And while Q2 was severely suppressed with a 70% drop compared to 2019, Q4 was a bumper Quarter when spends more than doubled over 2020 and surpassed 2019. 41% of annual spends came in Q4.

Cinema 2021: Collapse Continues

From a high of over Rs. 1,000 crore in 2019, Adex has dwindled down to Rs. 136 crore in 2021. This collapse is no doubt, not due to Advertisers losing confidence in Cinema Advertising, but because Cinemas were closed for long periods of time, in the last 2 years and because of audience’s hesitancy to visit places with large numbers of people in closed air-conditioned places. Out of a total of 6,700 screens pre Covid, as many as 800 screens closed down or were not active even when blockbusters like Sooryavanshi, Annatthe and Pushpa were released. Multiplex screens, numbered at 2,439 over 595 properties owned by 5 operators led by PVR, now account for 41% of all screens. As against 1,400 new movies released in 2019, new releases dwindled down to 69 in 2020 and  140 in 2021. Out of 140 releases across 10 languages, only 25 releases did good business. Most of the releases were in Hindi and Bengali. South Indian languages which normally have a high number of new releases remained virtually absent.

Top Advertisers of India in 2021

In keeping with the technology boom, 15 new-age Companies / start-ups have entered PMAR’s top 50 list, altering the composition of this list. These are Dream 11 at No. 3, BYJU’s at No. 5, Phone Pe at No. 12, Upstox at No. 13, My 11 Circle at No. 14 and many others including CRED, Netmed, MPL, Policybazaar, Unacademy, WhiteHat Jr, Swiggy, Netflix, Coin Switch Kuber and Coin DCX, coming lower in the pecking order. FMCG still dominates the list with 15 players all with high ranks, but their dominance is decreasing. Six out of top 10 are FMCG Advertisers, Hindustan Unilever, Reckitt, P&G, Reliance, Mondelez and ITC. While Unilever continues to top the list consistently, Amazon reappears at number 2 and BYJU’s is now at number 5. While many Advertisers like Dream 11, My 11 Circle, Google, L’Oreal and MPL (Gaming) gained many ranks, Pepsi, Amul, Nestle, VI and Hero Motors dropped many ranks. Top 50 Advertisers account for 38% (last year 35%) of Adex and top 10 continue to account for 18% of total Adex or 48% (last year 50%) of the top 50 list. Television and Digital continue to be the favourites of top Advertisers accounting for 88% of their total spends. Top 50 Advertisers now spend 30 % of their budget on Digital alone (up from 14 % last year).