After a turbulent 2020, things seem to be getting back on track for the media industry as overall advertising expenditure will see a Rs 15,000-crore jump in the current year, according to GroupM.
According to Sidharth Parashar, President, Investment and Pricing, GroupM, the economic revival, increased spending by the government on immunisation and infrastructure and the upcoming elections in four crucial states will keep the demand high for advertising, which in turn will lead to an increase in ad rates as well.
Parashar said print has been the most credible platform but then it doesn’t mean it will be the most relevant for advertisers. “It is up to the publishing houses how to stay more relevant for advertisers,” he told BestMediaInfo.com.
He said brands are now focusing more on the outcome-based approach for their media investments and performance marketing is going to gain from that.
“With more brands and agencies focussing on performance marketing, the future will see significant improvement in measurement and attribution across media, channels and platforms, whether it’s online or offline. Performance-based marketing is clearly going to be the future,” he said.
According to different reports on the state of Indian advertising, the adex size for 2020 is pegged between Rs 54,000 crore and Rs 58,000 crore, and is estimated to grow to Rs 68,000 crore in 2021. Whereas your numbers say the adex in 2020 was Rs 65,000 crore and will grow to Rs 80,000 crore in 2021. What’s the reason behind this vast variation?
We have been doing this practice for over the years from an adex estimate standpoint. We ensure it encapsulates and captures the holistic view of the market landscape. We won’t be able to comment on other reports. We are in a very unique position because of the size of business that GroupM India handles. It enables us to understand the market size and estimates better and much closer to reality. We represent a dominant share of the Indian market.
Is the industry back to normal ad rates across mediums? Or is there still time?
Last year was clearly pivotal as Covid transformed sectors in a really enduring manner. Media really wasn’t an exception to it. With the economy opening up, demand will start accelerating. Demand acceleration will have an impact on the pricing as well. So far, it has been a mixed bag for pricing. The pricing will increase for some, depending on the demand situation in their categories. However, with the economy reviving very fast, certain sectors are picking up speed. Government spending is increasing on the back of mass immunisation and there are four large elections slated for this year. Looking at economic revival, the situation is likely to improve on this front.
How do you see the adex growth across demographics in the country?
If you look at 2020, it was not like any other economic downside where one territory got impacted more than the other. There has been an impact across the board. Adex growth in 2021 will be broad-based, with both urban and rural demand driving the key sectors. Each geography will help shape up different categories very differently, which will be a function of how economic rebound will take place with the opening up of norms for different sectors in different areas in different geographies. The consumption increase will translate into growth for respective geographies.
Tier 2 and 3 towns will be particularly important from ecommerce, durable and healthcare-related sectors. Rural will continue to be the growth engines for the automobile and FMCG sectors.
Which category will continue to rely heavily on print and which category will reduce its spends on print? Have you spotted any trend on specific categories moving in and out from any medium?
2021 will begin a little slow, but there will be growth progressively for print as well as it is for other media also. Emerging as one of the most credible media, on the basis of what all of us know and according to the YouGov survey outcome, it is up to the print publications how to leverage this position and build on the strong value and stay relevant in the fast-changing world. Because print is considered as the most credible medium doesn’t mean it is the most relevant from the advertising and marketing standpoint on its own. It is up to the media owners and publishing houses to strive for staying more relevant and attractive.
The revival of local advertising is going to be crucial for good growth in print from the ad spends perspective. With urban consumption likely to accelerate from quarter 2 onwards, where we had low base last year, this medium is estimated to start registering growth from that point onwards.
Retail, education, consumer durable and government and to some extent FMCG will have a higher focus on print. These categories together form a large part of the Indian adex from print’s standpoint. Some categories such as auto, BFSI, services like healthcare and hospitality and small businesses will continue relying on print, but will also start to have increased focused spends on digital as well.
2021 is said to be the year of performance marketing cutting across mediums. In fact, many agencies and brands are betting big on this. Where do you see GroupM agencies on this front and how is it going to change the industry?
Performance marketing is currently the jargon used in the digital context. It is not a new concept. Performance marketing is an outcome that can be measured. It comes in sharp focus when the economy is low. In an increasingly volatile, uncertain, complex and ambiguous world, which is also called the VUCA world, advertisers are focused to seek efficiency wherever possible. Performance marketing is able to do justice to that part of what marketers are looking at in such times. Given the exceptionally tough year 2020, advertisers will strive for more and more bang to their buck in times to come. The number of digital platforms available today for advertisers has grown multi-fold compared to last 5-10 years ago. Many more will emerge as we move forward in the future. Earlier there was only search as a channel in performance marketing. Now it encompasses affiliates, email marketing, native advertising, product view sites, social influencers and even plugins that allow for personalised shopping experience for buyers online. More the options available, more the fragmentation and hence more wastage of spends as well, especially in the absence of any robust third-party tracking attribution mechanism. This has led to a re-emphasis on performance marketing.
Outcome-based approach for our clients’ media investments has always been at the forefront at GroupM. Not just digital, we are even developing accountable output and outcome-based models for traditional media as well. Digital as a medium started off focusing on outputs and outcomes before moving to brand saliency. However, performance remains the key objective for the marketers.
With more brands and agencies focussing on performance marketing, the future will see significant improvement in measurement and attribution across media, channels and platforms, whether it’s online or offline. Performance-based marketing is clearly going to be the future.
Many are apprehensive about digital as large parts of the spends are going as spillage. While performance is working, the display is losing share like other mediums. So, isn’t it about performance marketing here too rather than the medium?
More focus on performance and outcome will put more pressure on other verticals because investments and spends are going to be not infinite. Who in the world would not want to see outcome and performance-based rather than branding and display, etc. Branding and display will also play a critical role in various aspects within performance itself. We can’t say this is shrinking and that is increasing. Each one has a role to play.