Green shoots in the media industry have started appearing again as TV and digital ad inventory is getting filled to an optimum level, though at very low price points.
India’s leading media planners believe that a month on month growth of 20-25% is likely. A full recovery, however, is still a long distance.
“Things are coming back, that is for sure. For them to go back to the pre-Covid level is going to take some time but there has been a huge improvement. The worst-hit month, that is April, is hopefully behind us. June should be at least 15-20% more of what we saw in May,” said Anand Bhadkamkar, CEO, Dentsu Aegis Network, India.
For India’s media industry, the month of April was the worst ever as there was hardly any advertising. Print and outdoor were the most hurt mediums. TV was suffering too, despite having a record viewership. According to planners, TV advertising had shrunk by almost 75% in the month of April.
“After 70-80 days of being at home, people also want to get back to normal in life. Brands have noticed that and are capitalising on that. The rates on TV are very low as currently. A lot of repeat programming is happening. The viewership is also high, so brands want to make good use of the reduced rates existing in the market,” said Bhavana Mittal, VP, Media and Digital, RPSG.
The full recovery is now dependent on how the Covid-19 situation pans out. "The advertising expenditure situation is very different in comparison to whatever we have seen in the past 50 years, so it is not really easy to forecast a percentage growth in this scenario, but we can only estimate on the basis of numbers we are tracking every day and on our conversation with partners in the industry. Guesstimates are that by June end we should see 25-30% additional spends coming back. July-August may see 60-70% revival and festive should see a good comeback," said Sujata Dwibedy, Group Trading Director, Amplifi, Dentsu Aegis Network India.
“Coming out of lockdown, if the Covid-19 cases do not see a huge spike, then the next two months are something where we should get some reasonable numbers back in. TV and digital will definitely improve. For print as well, like the Government is saying, hard copies will be available across cities so ad monetisation on the print will improve as well. Digital will make a comeback much faster,” Bhadkamkar added.
The overall advertising spend in 2020 was predicted to be around Rs 91,000 crore, with an annual growth rate of 10%. According to GroupM, TV was expected to have revenue of Rs 38,000 crore whereas print was likely to be in the range of Rs 18,000 crore. The overall internet-based adex was to be around Rs 27,000 crore. Outdoor and cinema were to be in the range of Rs 4,500 crore and radio was expected to clock around Rs 2,800 crore.
According to industry estimates, the overall adex for the current calendar year could be less than Rs 70,000 crore (almost the 2017 levels) as the months of April and May were a complete washout.
Digital and TV are likely to be the only saving grace for the industry. “I see a massive upswing on digital especially in gaming, social media and video content, and it will continue,” Mittal said.
"Digital has already seen a good momentum since May and it is only increasing. The lockdown has inadvertently pushed the audience to digital and we are seeing all audience segments moving seamlessly. Content on streaming and OTT has seen huge traction. Gaming is another space where we saw exceptional growth, so there are infinite opportunities on digital that have evolved due to the digital transformation through lockdown. On the other hand, we have seen a growing readership of dailies in the online avatar," Dwibedy said.
With TV, however, the challenge is unavailability of content.
“There is still time for original content to start coming in. The rates will only improve when original programming starts happening. That’s the reason why the rates are lower right now,” Mittal added.
Experts believe the health and pharma industries will continue to be active advertisers and consumer durables and products for personal consumption will make a faster comeback.
"The FMCG, beauty, foods category will see a full-fledged, all category advertising. Health and fitness-related products would also start advertising. Auto-two wheelers should come back and take advantage of the situation, as people may want their own vehicles, instead of public transport at the moment, same logic for small cars. On durables, the malls and shopping complexes need to be open soon for them to start fully. Ecommerce would continue being active for all verticals, including essentials, durables and education," Dwibedy said.
For India’s print, cinema and outdoor advertising, it’s likely to be a long road to recovery. “Print hasn’t improved too much yet. Even though the newspapers are claiming that their circulations have started coming back to normal except for a city like Mumbai, the advertising volume still remains low,” Mittal said.
The upcoming festive season might bring in some cheer though.
"The growth of the physical copies of print might be much slower considering that many societies are still not allowing home delivery and are opting for dropping the copies at the gates, but festivals are just round the corner, so for all you know things might change," Dwibedy said. "Once the publishers are back in form, they will demand rates that they deserve," she added.