Covid-19 surge a temporary blip, unlikely to impact advertising expenditure in long term: Top media planners

The media industry is optimistic of the advertising expenditure touching a double-digit growth in the present calendar year as compared to 2020, despite the second wave of the Covid-19 pandemic wreaking havoc across the country.

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Dentsu had earlier predicted that the overall advertising expenditure in the current calendar year will increase by 11% to Rs 62,500 crore, as compared to Rs 56,000 crore in 2020.

In a conversation with BestMediaInfo.com, Ashish Bhasin, CEO, Asia Pacific and Chairman India, Dentsu Aegis Network, said, “There is no nationwide lockdown like the previous year; the collective impact will be felt to a certain extent. Having said that, the severity of the impact will depend on the longevity of the curbs in the second Covid wave. Despite that, the sentiment will not dip the way it did last year when there was uncertainty, fear and no definitive known way to tackle the pandemic. This year, you have the vaccines, and all will depend on the speed with which we vaccinate more people.”

Bhasin said the adex predictions for this year remain intact as of now. “But it depends on how the virus situation rolls out in the near future,” he added.

Shashi Sinha, CEO, IPG Mediabrands India, is also cautiously optimistic of the overall advertising expenditure being on a strong wicket in the current year. “If you see almost every major brand is advertising during the Indian Premier League. Things are a little uncertain because of the Covid surge and the restrictions being implemented by the states, but the overall industry sentiment hasn’t dipped yet,” Sinha said.

Sinha mentioned that the overall advertiser sentiment was buoyant as almost all the inventory for IPL matches was already almost sold.

In terms of the overall recovery, the media industry was pretty much on track in March. Bhasin said that it had touched almost 90% of the pre-Covid levels.

“As an industry, we were doing well and every month was better than the last until March 2021 when the sentiment and adex had come back to about 90% of the pre-Covid level,” he added.

The industry feels that the predictions of a good monsoon will keep the rural demand high during the next few months and by the time festive season arrives a major portion of the population would be vaccinated. The next few months, however, are going to be crucial.

“Skymet, last week, has predicted a good monsoon this year which will boost the rural economy again. So, a good monsoon combined with vaccines will help Indian adex touch a double-digit growth. We, at Dentsu, had factored a second wave in our report and predicted a far more realistic growth of nearly 11% in the Indian adex for 2021 in February. I’m still hopeful that the adex will achieve double-digit growth,” Bhasin said.

The ban on the non-essential deliveries via e-commerce and shutting of malls in Delhi and some other states may take some toll on the adex though.

“Currently, e-commerce operations for non-essential items are banned in Maharashtra. If the same thing happens in other metros, then the consumer categories may stall their ad expenditure. I hope and pray that the virus gets contained and we are back on the recovery path,” Sinha said. 

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