The nation is limping back to normalcy amidst the pandemic cases and deaths dropping. This year’s festive season gave a positive boost to the economy which was sluggish for almost a year and a half. Diwali 2021 generated business worth Rs 1.25 lakh crore, a record trade figure during the festive period in the last 10 years, as per the Confederation of All India Traders (CAIT). Drawing a conclusion from the consumers’ way of spending, the trade body is expecting an infusion of about Rs 3 lakh crore by the year-end.
The media industry was upended by the pandemic and hit the hardest from a loss of ad revenues. Nevertheless, the festive season has brought in cheer to the broadcast industry. According to industry experts, the festive season has significantly boosted the media industry and resulted in advertising growth of between 12-30 percent.
Festive period and ad revenue growth
“The festive season witnessed a 25-30% spike in ad volumes, and around 2000+ new advertisers got active during the season across total media,” said Vikas Khanchandani, Group CEO, Republic TV.
“Diwali was truly festive this time and did well in terms of ad revenues with brands spending superlatively well. The advertiser spends are better than pre-covid and there is a recovery in spends. It was a longer Diwali period than usual,” said Mona Jain, CRO, ABP Network.
According to Gaurav Dhawan, EVP – Revenue, Times Network, “The media industry has witnessed a 12-15% growth in advertising during the festive period. With the opening of travel, malls, shops with extended business hours, exuberant stock markets, BFSI uptake etc., several brands have leveraged this opportunity during the festive times.
“While the uptake has significantly increased, the ad spends are yet to catch up with that of the pre covid era. With the upcoming big ticketed news events such as Union Budget, State Elections, etc., we expect a surge in the ad spends in the next 2-3 months,” observes Dhawan.
Diwali in the last 1-2 years (even during the pre-covid period) had been relegated to being a maximum of 4-5 weeks upside in spend. This year the brands have sustained campaigns for 6-8 weeks making the spending period longer and extending the festive period to earlier times.
“News as a genre has expanded in relevance to categories like FMCG which were restricted on the genre, now experiencing the impact and the ROI and response it generates for the brands you have categories like FMCG – Healthcare, personal care, education, e-commerce buying strategically on the genre increasing their spends,” said Jain.
According to Khanchandani, every broadcast genre has witnessed improvement on their ad inventories and client count with the much-needed festive time (coinciding with the 2nd leg of IPL and ICC T20 WC). The Inventory utilisation has increased by 19% on Hindi News and >50% on English News.
Hopes on the revenue and ad growth of the media industry for 2022
The advertisement and subscription revenues contribute nearly equally to the overall Media &Entertainment sector’s top line, but since the former correlates strongly with economic growth, the pandemic has had a bigger impact on it. The revenue of India’s media and entertainment sector will script a strong 27 percent rebound to Rs 1.37 lakh crore in fiscal 2022. Next fiscal, with a strong economic rebound on the cards, ad revenue should grow 31 percent on-year and subscription revenue by 24 percent, according to an analysis by CRISIL Ratings.
According to Khanchandani, the ad revenues on TV is projected to grow by 19% and he strongly believes that news will grow across broadcast, Live streaming and online publishing.
Dhawan expects the inventory advertising to grow at an average of 15-18%, while the solution business to grow at over 50%, a clear reflection of how brands are looking for more content integrated offerings of TV and Digital and its impact.
As per Jain, with the emergence of start-ups, unicorns are getting active to create high awareness with dominant SOV for their brands and establish the new categories- especially in fintech and education and e-commerce space. This, in turn, is benefiting the news genre especially the regionals as it works out to be most effective and efficient in terms of generating instant recall and visibility alongside the expansion of markets across geographies providing deeper penetration in upcountry cities in the regions.
“Now with the country going to have elections in 5 key states – news genre will garner dominant audience attracting a higher proportion of spends across categories including emerging categories and the existing ones like automobiles, durables and retail,” said Jain.
Hopes on ad spends in 2022
As per Khanchandani, the ad expenditure would go up by approximately 25-30 percent.
The primary reason being the demand across sectors that were on hold during the Covid period would be opened to the market. Due to this, employment opportunities will increase which will positively impact the Indian Advertising industry as well. The second reason is that most of the sectors suppressed their advertising budgets during the Covid Era. However, with the situation slowly turning to normalcy, the accumulated unused ad budgets are expected to be utilised during 2022. Many FMCG and Pharma Clients (Like GSK, Reckitt, Dabur, etc) would leverage on the adopted healthy habits of Indian consumers and enrich this habit of theirs and continue to improve the ad budgets.
Dhawan is also optimistic about 2022. The next 2 years will see a bull run in the advertising market with companies becoming sharper, smarter and more evolved in engaging with their customers.
Jain is also foreseeing growth in spending with marketers looking at new launches and reinstating the stalled plans which were on hold due to pandemic.