Adex down in May but sharp recovery likely once unlocking starts: Shashi Sinha of Mediabrands

The second wave of the Covid-19 pandemic has started to make a dent in the advertising revenue predictions for the current calendar year. According to estimates, the overall advertising revenue across mediums shrunk by 25% in the last 40 days, majorly because of the suspension of the Indian Premier League (IPL).

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The month of April started on a promising note for media platforms with IPL kicking off in the second week and brands starting to invest money on and around the cricketing league.

But as Covid cases shot up by mid-April and the country almost shut down, brands also started going slow on advertising.

The new economy brands such as MPL, Cred, Unacademy, Byjus among others who were spending massively around cricket also had to stall their advertising.

According to Shashi Sinha, CEO, Mediabrands India, "Despite advertising being hit because of the second wave, it is still likely to be better than last year. Once the unlock process starts, we hope for a sharp recovery. It entirely depends on how the Covid situation pans out in the country and if there are any further waves or not."

Sinha said he was hoping that major cities such as Delhi and Mumbai would start opening up next month and consumption of non-essentials would pick up immediately as there's also the pent-up demand factor.

"I believe both consumption and sentiment aren’t as badly hit this time. Companies now also know how to deal with the situation from last year's experience. The supply chains and other factors are already in order," Sinha added.

Asked about the overall impact on advertising in the last 40 days, after the states started putting in place lockdown-like restrictions, Sinha said that as per his estimates, brands have cut their expenditure across platforms, including digital. "It may be 20-25% in TV, 35% in print and around 15% in digital. But all of this looks like a short-term impact. It may not last too long," he added.

Sinha said given the high number of cricketing tournaments (including the remaining IPL matches) and other events this year, advertising expenditure by brands looked bright.

According to various estimates, India's adex in the current calendar was predicted to grow at 11% to reach around Rs 62,000 crore from 56,000 crore in 2020.

India's adex took a severe hit in 2020 because of the outbreak of the Covid-19 pandemic and the overall base shrank by more than 15%.

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