We expect AdEx to recover in H2 '20 & grow at a dramatic rate of 60-72% of H1: Sam Balsara

At the unveiling of the Pitch Madison Advertising Mid-Year Report (PMAR) 2020, Sam Balsara, Chairman and MD of Madison World, spoke about the unprecedented challenge posed by Covid on businesses and the pandemic’s impact on AdEx.

Sharing the findings of the report, Balsara said the AdEx has collapsed by as much as 65% because of COVID-19 in Q2. Significantly, AdEx had also contracted by 8% in Q1. In absolute terms, it means an unprecedented drop of almost Rs 14,000 crore from Rs 35,110 crore in H1’19 to Rs 21,298 crore in H1 2020. Drops are much higher for traditional media.

“In absolute terms, AdEx has de-grown from Rs 35,110 crore in H1’19 to Rs 21,298 crore in H1 2020, a drop of almost Rs 14,000 crore. AdEx has never seen a drop as dramatic as this,” said Balsara.

He also said that TV dropped by more than 40% in H1’20 with a total AdEx of Rs 8,084 crore and registered a share of 38% of the advertising pie, though its share was as high as 51% in Q2 ’20, because of absence in spends in other traditional media.

As per the attest PMAR report, Digital suffered a minor contraction of just 7%, even as all the other mediums suffered a drop of 40-55%. Digital is also the only medium to grow by 16% in Q1 2020, when all others registered a double-digit drop. In absolute terms, Digital AdEx in H1 20 stood at Rs 6,472 crore, commanding a 30% share of AdEx, firmly displacing Print.

“Print AdEx suffered not just because of lack of advertising money in the market, but also because of the lockdown, as newspapers could not be delivered to households. While most readers could lay their hands on the e-version of their favourite titles, widely in circulation over WhatsApp, quick monetisation of this phenomenon was difficult. In absolute terms, Print AdEx stood at Rs 5,237 crore in H1’20 Publications across languages show a drop in space consumed, of more than 50% in H1’20. English and Hindi publications continue to contribute close to 60% of the total volume like in recent years,” added Balsara.

According to the report, the months of April and May were characterised by empty roads, which predictably led most advertisers to avoid Outdoor altogether in Q2. In Q1 too, Outdoor had registered a drop of 13%. Overall, OOH advertising stood at Rs 760 crore in H1 ’20

Since Cinemas have remained shut since the start of the lockdown, this medium registered nil ad spends in Q2. It also contracted by 19% in Q1 ’20, registering an estimated billing of just Rs 176 crore.

“We expect AdEx to recover in H2 2020 and grow at a dramatic rate of 60-72% of the collapsed H1 or grow 6-13% versus H2 '19. This will lead to overall AdEx in 2020 contracting by 14-18%, and its value to be pessimistically just over the 2017 level or optimistically a little below the 2018 level,” stated Balsara.

Like other traditional mediums, Radio too suffered a 19% drop in Q1 ’20 and a dramatic 87% drop in Q2 because of no advertising money in the market. In absolute terms, Radio AdEx stood at Rs 569 crore for H1 ’20, the report says.