Mumbai: A gradual recovery in startup ad spends, Elections, Auto, SMEs will be among the key drivers of adex in 2024. The first half of the year will also benefit from the Twenty20 World Cup which will take place immediately after the conclusion of the cash rich T20 League, the IPL. On the flip-side the threat of the war between Russia and Ukraine could escalate which might see oil prices rise. Also there is some amount of uncertainty about the monsoon this year. These could prove to be speed-bumps in terms of the ad ex growth this year. Group M in its This Year Next Year annual report says that the adex will grow by 10.2 per cent in 2024.
Speaking to Medianews4u.com Ashwin Padmanabhan, president – investments, trading, and partnerships, GroupM said that 2023 was the first year in a while where there were no ups and downs. It was low but stable. There weren’t too many fluctuations. So 2024 will be better compared to 2023. “Auto, retail, education will drive growth. FMCG will be stable. FMCG in 2023 stabilised spends they invested more. They will continue to invest. These categories will be the base. Moreover startups have started to come back. They may not spend like what they did in 2021 or in the first half of 2022 but there will be a measured spend on their part.
“We are seeing this happen. They are chasing profitable acquisition of consumers. When that happens they will start spending on advertising. Their spends will be measured. We have started seeing this trend in October 2023. They are spending after 18 months of not spending. For retail media the opportunity to spend will lie on commerce platforms. More and more brands are seeing commerce contribute a larger share to their sales.”
“Spends on retail media will grow. Companies will invest to develop and build those channels. When they do this they will also advertise to build those channels. The growth of retail media will power new spends coming in even from traditional companies. A lot of companies are seeing almost 25 percent of those sales coming from commerce and modern trade. That percentage will continue to grow. Money will be invested on retail media and on data driven communication through in general trade.” Companies he explains will go beyond point of sale promotions and innovations. Opportunities for growing sales will drive investments from a phygital perspective.”
Elections: In terms of Elections he said that they should add anywhere between Rs. 1500-2000 crores this year. Categories like news not only just on TV but also on social media will benefit. Advertising has already started on platforms like Youtube, Facebook.
A Strong January So Far: He added that the adex for January 2024 is better than January 2023. “We have not finished running the numbers but the growth in January will be between 10-15 per cent. We saw stabilisation happen from August of last year and this trend has continued. In January 2023 we were coming off a low phase. The festive season of 2022 was not great. The first of 2022 was brilliant but the second half had tanked due to factors like increasing oil prices, increasing inflation.”
Obstacles To Growth: This year he thinks that the potential obstacles to growth could be geo political in nature. “If the war expands what will happen to oil prices? That will have an impact on commodity prices for FMCGs. What is happening in the Red Sea right now in terms of shipping could impact the way in which goods are transported from one manufacturing base to another. It will impact India also. From a local perspective I would say that the monsoon is a very great factor.
“We have not had great monsoons over the last couple of years. The El Nino phenomenon continues to play out in 2024 and this could dampen rural growth. If this happens then categories like consumer product goods will get impacted. Two wheelers will get impacted. Things that are beyond our control could potentially impact growth but the environment per se is positive.”
Measurement: On the issue of measurement of media he said that this issue is not about basic measurement. That is available for all media. Print got back measurement and that helped. But in digital it is not about hygiene. It is about the ability measure across different environments. The environments are standalone. “They are walled gardens. You can measure within them. But how do I connect audiences across environments?
“That is where measurement is gravitating towards. On TV there were some amount of questions but things have reached a stable stage. Now a lot of non-digital outdoor is about driving impact. Outdoor is going into a programmatic environment with digital sites coming up especially in larger cities. The amount of digital ambient media available in malls is increasing substantially. It is about how the digitisation of screens is happening and then measurement comes in.” he added in a panel on measuring outdoor.
“Panels will continue to run. Digital screens he said bring in accountability. When an ad is served you know it is being served. You know what ad is being served and when. You can serve it depending on the time of the day and the audience being targeted. Ad tech will benefit outdoor” he opines.
TV: This medium is expected to see single digit growth compared to double digit growth years of the past. TV will add another Rs. 3000 crores of incremental ad spend in 2024. But more advertising is coming into the market but less of it is going to TV as a percentage. For this medium to return to double digit growth TV will have to innovate in how it is distributed to audiences at a micro level. “It has the opportunity but investment has to happen on the tech side. If that happens then TV can attract some SME advertising which is going to digital.”
He gave the example of a pilot in 2021 where Tata Play and Disney got together to target audiences through cohorts of Tata Play subscribers specifically across different streams of the same channel. “You could target all Metros and have one stream of a channel which is served only for all Metros. As another example all homes above a certain income could be served one stream. Audiences can be segmented on TV and if one applies the tech that Tata Play has brought it across all environments then one can offer TV to advertisers in the same manner that digital is offered. “These kinds of innovations will have to gather speed for TV to get a larger share.”
He noted that FAST is growing the adoption of CTV. “FAST are linear TV channels that are free to air. But you are consuming the content on a CTV. Fast is hastening the adoption of CTVs. 21 per cent of homes today are on a CTV device. This consumption is growing on the back of a lot of content delivered by FAST in markets like Haryana and Madhya Pradesh. There TV consumption has traditionally been low. Broadband has become cheaper and content costs have become lesser.”
Print: He noted that in India all mediums including print are growing. This trend will continue. He noted that in regional media many publications have recovered to 2019 levels in terms of ad revenue. Commerce is investing a lot in print. They are trying to grow their base in tier two and three cities. They need to get incremental audiences who can pay. Commerce companies need to acquire new customers in tier two, three towns and cities. Print plays an important role for them.
A.I.: He said that A.I. is playing a role in delivering and executing campaigns on digital. If a human has to optimise a 1000 line items on a digital platform there is only so much one can do. But A.I. can do it in real time and continuously. A.I. he said is helping content being developed depending on the TG. One can using A.I. make a creative and show it depending on a consumers likes, dislikes, preferences.
