Rising AdEx: What’s making advertisers look South?

A growing appetite for consumer goods and services among the southern states of India is translating into a rise in advertising expenditure too, say marketers and brand managers. A lot of attention is being paid towards branching out the media mix, trying to target each state with regional media campaigns.

According to Dentsu’s Amplifi, until the Covid-imposed lockdown, the South market contributed to a little less than 30 per cent of the AdEx, but now it has is almost close to 30-35 per cent. Sujata Dwibedy, Chief Investment Officer of Amplifi India, says that in 2023-2024, the south ad spends should clock almost 35 per cent of the AdEx. “This should be on the back of not only TV but also digital, including the growing OTT/video, gaming and social ad spends, and print.”

Sujata put forward evidence for the pull that southern publications and digital platforms have over marketers. “The story is quite clear when we study the inventory fills across not only the top channels in these markets but also the 2nd and 3rd ranking channels. Even in Print, the Southern regional publications bounced back the fastest, and each of these markets has its lead publications. The importance is evident from the fact that even on IPL, they now have individual states’ language, and for any creative, South creatives are not merely dubbed, but a different creative is made. South also has an excellent digital presence. In fact, digital consumption of news in the languages of the South scaled up much before Hindi news started getting consumed on digital platforms.”

Meanwhile, Dinesh Singh Rathore, CEO, Madison Media Omega, says there has been a 29 per cent increase in south AdEx in 2021 over 2020 and a further 13 per cent increase in 2022 over 2021. Growth projections, according to him, for 2023 stands at 15 per cent.

Baggry’s and Arrow, two of the national brands with a significant base in the south market, say they expect a significant uptick in ad expenditure in the South.

Arrow’s Head of Marketing, Soumali Chakraborty, shares, “Southern states have been an important part of our overall brand plan. So, essentially when we look at these states, we tend to be quite tactical hence there is a fair amount of insistence on increasing the footprint on a yearly basis. In addition to this, there is a prominent emphasis that the brand positions for Southern states which comes in two categories. One is to channel brand awareness through campaigns that are encapsulated in pan India. Secondly, we aim to be more tactical wherein we look at a number of factors - mainly sites on hire, outdoor hoardings, local influencers, etc. - so there is definitely a local angle towards our activities and that is where we incorporate a prominent part of the budget.”

“We definitely anticipate an uptick since the virtue of these markets is becoming stronger and more relevant. Secondly, there is a significant increase in the number of stores opening up, which will only grow, in proportion,” she adds.

Aditya Bagri, Director, Bagrry's Group,  believes scaling up digital in South is the best way to move forward. “We have upscaled our digital-first approach over the years (from the traditional advertising approach), which has largely been driven by mediums of print and Out Of Home along with additional work on the point of sale. In the past, we have also explored different TV markets in the southern regions, such as Kerala. From a futuristic point of view, given the data-driven approach of digitalization, it is the best medium to reach a wide spread of segments and is the most effective way to target consumers from different walks of life.”

Distribution by states

Dinesh Rathore from Madison Media Omega says Print ad spends have been the strongest and breaks down the contribution towards ad expenditure state-wise in the South. "Print adex is very strong in southern states due to very strong local retail market. AP & TN are the larger states with contribution close to 30-32% each followed by Karnataka @25 % and Kerala is the smallest with 12% contribution."

Dentsu’s Amplifi India provides a subtle breakdown of how the ad expenditure is distributed among the five states. “The AdEx distribution clearly depends on the Products’ availability and distribution. Tamil Nadu is a high priority across most of the advertisers almost 10-14% of the share, followed by Andhra Pradesh/Telangana, then Karnataka, and then Kerala. Between Karnataka and Kerala, the ranks might interchange depending on the advertisers/products. In terms of numbers, Tamil Nadu and Andhra Pradesh markets are quite stable when it comes to media deliveries. Kerala has a unique monopolistic situation with the lead channel being way ahead of the others. Earlier Kerala used to be less than 4% of the AdEx, but it has gained a lot of momentum now. Also, since the size of the market is small, the deviations also tend to be high. Karnataka has a huge spill from Tamil Nadu and has quite a reputation for having fluctuations. However, each of the Southern markets has now carved a niche and has started becoming a priority for advertisers.”

He also adds on to say, “Advertisers are moving Southwards, for better ROI. Tamil Nadu was already quite an important market for most advertisers, now the others have also gradually become critical.”