Digital expected to have a 'V-shaped' recovery

The undeniable impact of COVID-19 could be felt also on Digital AdEx this quarter, say Pitch Madison Advertising Report 2020 Mid-Year Review. While it has had a meteoric rise from Rs 1,535 crore in 2011 to Rs 15,467 crore in 2019, growing its share from a meagre 6% of AdEx in 2011 to a dramatic 23% in 2019, digital did suffer a minor de-growth 7%.

But this de-growth has to be seen against the ones suffered by Print and Television, which are 51% and 43% respectively in H1 20. "In absolute terms, Digital AdEx in H1 20 in our estimates stood at Rs 6,472 crore, registering a 30% market-share and firmly displacing Print, which declined in share from 30% in 2019 to 25% in 2020 H1," read the report.

In Q2'20, digital media saw ad spends dropping by a substantial 35% compared to Q2 '19. However, print suffered a 79% and TV a 61% drop in the same period. "Looking at Digital AdEx by various verticals, we find that it is it is more or less equally divided between four major segments - Search, Social, Video & Display - with each contributing between 20% to 30% to the total. While we saw an explosive spike in video consumption, this did not translate to ad spends and video only maintained its share of 30% of Digital AdEx, continuing to be the largest contributor. Video was followed by Social media which came in next with a share of 26%.," the report pointed out.

There has been a spike in social spends in q2 2020 as more brands used social platforms to maintain relevance in the absence of other traditional media. "Interestingly, Display advertising took a sharp hit whereas Search maintained itself in third position. E-commerce advertising platforms have made their presence felt, maintaining a 10% share. Affiliate networks have the balance," said the report.

Among the digital categories, e-commerce, entertainment, edu-tech, food tech, fintech, FMCG, gaming, groceries, government, health tech, health care and OTT platforms have outperformed. There has been a surge in user base and time spent, not only through mobile phones but also through a connected TV. " Interestingly, channels have started offering advertisers a combined deal for Video, covering both TV & OTT, as TV-plus, especially for their impact properties," the report observed.

The report reiterates that digital is set for a V-shaped recovery with an unabated growth forecast of 28 to 30% in H2. This will lead to a full-year growth, ranging from 12-18%. "It is significant that no other medium will achieve growth in 2020, although Digital AdEx growth will be much lower than our original projected growth rate of 32.1%, made pre-COVID in February 2020. Fuelling this fierce growth in H2 will be FMCG, Telecom, BFSI, OTT, e-commerce and of course online gaming. E-commerce and Gaming have become the backbone of Digital AdEx," the report said.