What the advertising industry hopes from the upcoming budget

Ahead of the Union Budget 2024 which will be presented by Finance Minister Nirmala Sitharaman on February 1, 2024, the advertising industry has outlined its pre-budget expectations, emphasising the need for the government to enhance digital integration at the grassroots level. Additionally, there is a call for facilitating the entry of global businesses into India. 

They are also expecting the upcoming budget to tackle challenges in crucial areas such as deepfake and computer-generated imagery (CGI). Furthermore, initiatives aimed at promoting the widespread use of technological advancements are urged to be included in the financial budget.

Govt should increase digital adoption at the grassroots 

Rohan Mehta, CEO, FCB Kinnect and FCB/Six India, mentioned that the growing inflation is limiting consumers’ purchasing power. While this is a predicament for people across demographics, the Indian population comprises more of the younger cohorts, as compared to the older. Since consumers of digital are largely the youth, the efforts of the digitally dominated A&M industry might not reap what it sows. 

“The government should also increase digital adoption at the grassroots and make it easier for global businesses coming to India. Although infrastructure and manufacturing are essential, investing in innovation is key for business success,” Mehta said.

He added that steps to allocate budgets for facilitating sustainable development will encourage the growth of the EV segment, which is crucial to maximise their spending on advertising and eventually encourage a greener future.

Furthermore, Mehta emphasised that if the Government were to release the much-anticipated Consumption Expenditure Survey, it would help brands understand the Consumer Price Index better, which would help them regulate the pricing of goods to make them more affordable. 

“This will help people increase their disposable income, ultimately making advertising more useful to brands. A booming advertising ecosystem will inevitably open up more avenues for job opportunities since youth unemployment is on a serious rise,” he added. 

Shrenik Gandhi, Co-founder and CEO, White Rivers Media, pointed out that while the immediate impact of the Interim Budget might be unclear, it holds seeds for long-term growth. 

"Beyond infrastructure, we expect the budget to address challenges in critical areas like deepfake and CGI, encouraging responsible and creative applications of these powerful technologies,” Gandhi said. 

Similarly, the animation, visual effects, gaming and comic (AVCG) sector, a key driver of immersive content, could benefit from targeted support. This will enable India to compete on the global stage, where it recently took centre stage. Hosting the G20 summit and the Cricket World Cup 2023 has put India in the spotlight. The budget should reflect this momentum, he added. 

“We also expect support for the booming e-gaming sector and fostering a vibrant digital entertainment ecosystem. This is not just about entertainment; it's about empowering creators, fueling innovation, and connecting with audiences across the globe,” Gandhi said. 

“We're optimistic that the government's focus on robust methodologies and collaborative decision-making will translate into policies that nurture the advertising and marketing sector. Our team is already strategising to leverage these potential opportunities for our clients, ensuring they're at the forefront of the industry's next wave of innovation,” he added. 

Increased demand for media and entertainment offerings projected

Dhruv Rajput, Vice-President - Brand Solutions and Business Head - Strategic Account Planning, Schbang, highlighted that the election year budgets have historically been populist in nature with a higher focus on voter appeal. 

“However, given the current wave of victories of the government in power, we can safely assume that this budget will strike a good balance between economic strategy and voter appeal. This approach should have a positive impact on boosting consumption in the country, creating more opportunities and avenues for advertisers to capitalise on and help their brands grow,” Rajput said.

“Moreover, we should anticipate that the budget will push for the entry of new businesses into the market, fostering a strong competition for share of voice and driving top-of-mind recalls. Last year, significant importance was given to facilitating digital infrastructure to expand the range of services available to citizens. One should expect a continued emphasis on this area in the upcoming budget, leading to further growth in avenues for brand communications and an expansion of the consumer base,” he added.

Furthermore, he mentioned that in addition to the advertising and marketing industry, the media and entertainment sector is likely to experience its own set of expectations and impacts from Budget 2024. 

“Increased consumption resulting from the budget's economic strategy will likely lead to a greater demand for media and entertainment offerings. This could translate into higher advertising budgets, more investments in content creation and increased competition among media companies to capture the attention of the expanding consumer base,” he added. 

Budget should focus on strategies to propel adoption of tech advancements

Delphin Varghese, Co-founder and Chief Business Officer, AdCounty Media, said that India’s advertising market is anticipated to experience a substantial expansion by attaining a market value of $14 billion (Rs 1,099 billion) in 2024, indicating an 11.4% surge. The major contributor of this upward trend in the Indian advertising industry is the digital format which accounts for 46% of the advertising market share in India.

“Besides this, other formats like TV and print formats are also expected to grow within the advertising space. The Industry is witnessing a shift from branding to performance marketing in the e-commerce and retails sector with automotive, fintech and consumer packaged goods (CPG) being the most prominent ad growth drivers,” Varghese said. 

The Union Budget 2024 should help bolster the digital ecosystem through initiatives that focus on capital expenditure on infrastructure development to help facilitate digital and physical marketing and advertising opportunities and help brands tap into their target audience, he added.

Furthermore, he said that strategies to propel the adoption of technological advancements through initiatives like skilling the youth and developing Centres of Excellence in AI should also remain within the purview of the financial budget. 

“With skyrocketing innovations, comprising technologies like 5G, Web 3.0 and Metaverse, creating accessible and affordable opportunities for M&E industries and MSMEs to engage with their audiences in an augmented world should lie at the forefront of the interim budget. With the advertising and marketing industry experiencing an upward trajectory, brands will amplify their digital efforts, paving the way for an abundance of marketing opportunities for agencies,” he added. 

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