India's Ad Spends Hit Rs 99,038 Cr, Digital Leads With 15% Growth

Madison Media released the 'Pitch Madison Advertising Report 2024' on February 15, highlighting the advertising forecast for the Indian media and marketing industry. Chief guest, Shantanu Khosla, Executive Vice Chairman, Crompton Greaves Consumer Electricals stated, “India is an underpenetrated, underserved country and the pie is going to increase, but brands must be authentic, build trust and have a sense of purpose”. He further said, “Creative/content will always be more important than media."

Key findings of the report:

Overall:

1. In 2023, total Adex grew by a mere 10 per cent, vs our projection of 16 per cent. Traditional Adex grew by 7 per cent and Digital Adex by 15 per cent. Increase in raw material prices in H1, continuing wars in Russia/Ukraine and Israel/Hamas, inflation, funding winter within the start-up industry are some of the factors that have contributed to the slow growth rate. Whilst the GDP growth is estimated at 7.3 per cent, if you look deeper, the contribution of private final consumption expenditure component of GDP has come down, which may explain the reason for lower buying of products and services by the middle class and rural India.
2. Compared to Indian Adex growth rate of 10 per cent, Global Adex, according to WARC grew by just 5 per cent in 2023. Brazil and India are now the two fastest growing Adex markets.
3. Traditional Adex dominates Indian Adex with a 60 per cent share, whereas in Global Adex, the figure is just 27 per cent.  
4. The audio visual medium contributes to 46.3 per cent of total Adex. Linear TV at Rs 32,886 crores and Digital Video at Rs 12,996 crores, totalling to Rs 45,882 crores.
5. H1 2023 grew by just 6 per cent, but H2 2023 grew by 14 per cent. Q4 was the best performing quarter with a contribution of 31 per cent to the full year and accounted for 50 per cent of the annual growth. 
6. FMCG continues to be the largest category contributor in Adex and has gained share of 1 per cent point to 33 per cent in 2023.
7. Ecommerce as a category has established itself as the 2nd biggest contributor to Adex, with a share of 11 per cent in 2023.
8. There is no change in the top three advertisers of Adex - HUL, Reckitt and RIL. Godrej Consumer Products is the new entrant in the top five list. The 'Top 50 Advertisers' list has 20 FMCG companies and only one start-up in the list, compared to nine last year, reconfirming the funding winter in the start-up ecosystem. Whilst total Adex has grown by 10 per cent, if we look at the Top 10 advertisers, their advertising budgets have grown 20 per cent.

Digital

1. Digital grew by a mere 15 per cent in 2023, vs our projections of 25 per cent to reach Rs. 39,714 crores. This is the slowest growth in more than a decade, barring the Covid year. 
2. But digital continues to be the largest contributor to Adex with a 40 per cent share and has gained 2 per cent points in terms of share. 
3. With a share of 40 per cent of Adex, digital in India still trails behind Global Adex, where its share is 73 per cent.
4. Video, social, display, ecommerce and search drives Digital Adex. Digital video continues to dominate Digital Adex, although its growth has slowed down from 40 per cen last year to 26 per cent in 2023, it is the largest contributor to Digital Adex and has gained share from 30 per cent to 33 per cent.
5. Advertising on Connected TV has increased from Rs 450 crores to around Rs. 1,000 crores in 2023.
6. Digital will continue to be the key driver of Adex in 2024 growing  by a modest 17 per cent with a rise in share from 40 per cent to 42 per cent.

Television

1. TV registered a modest growth of 7 per cent, against our forecast of 9 per cent to reach Rs. 32,886 crores in 2023.
2. TV’s share of Adex further declined from 34 per cent in 2022 to 33 per cent in 2023.
3. There was a 2 per cent drop in advertising FCT in 2023 over 2022. 
4. Not only does FMCG continue to be the largest contributor to TV Adex, with a growth in spends  of 12 per cent, its contribution to TV Adex increased from 45 per cent to 47 per cent.
5. Ecommerce continues to be the 2nd largest contributor to TV Adex. Auto has increased spends by 21 per cent and contributes to 6 per cent of TV Adex. Education as a category has reduced its spends by 41 per cent and now contributes just 2 per cent to TV Adex. 
6. Hindi satellite mainline along with second line and sports are the two major genres and contribute to almost 50 per cent in value, but Hindi satellite, marginally de-grew in FCT, whilst sports increased its FCT by 8 per cent. Hindi movies de- grew 6 per cent and English niche, English movies and Infotainment de-grew around 30 per cent by volume.
7. We expect TV Adex to grow by 8 per cent in 2024 to reach a total of Rs. 35,575 crores with a share of 32 per cent.

Print

1. Print Adex grew by 4 per cent to reach Rs 19,250 crores, but is still below its pre-Covid level.
2. Whilst Print’s share to total Adex has dropped by 2 per cent points from 21 per cent to 19 per cent, it is still far higher than the global average of 4 per cent.
3. Auto, FMCG, education, retail and real estate contribute 50 per cent to Print Adex. This year auto is the leader of the pack with 14 per cent share and contributed most to the growth of Print Adex.
4. Hindi and English Publications contribute over 64 per cent to the total Print Advertising space consumed in India. Marathi comes next. But the volume of space used collectively in Kannada, Tamil, Telugu, Malayalam, Gujarati, Oriya. Bengali, Punjabi, Assamese and Urdu is relatively low.
5. We expect print to grow by 7 per cent in 2024 to reach Rs. 20,613 crores and finally surpass the pre-Covid 2019 figures. 

Other Media

1. OOH Adex has registered a growth of 13 per cent, on the back of a 68 per cent growth the previous year, taking the industry to Rs 4,140 crores. 
2. Radio Adex has grown by 12 per cent to reach Rs. 2,272 crore, to finally surpass its pre Covid level.
3. Real Estate has emerged as the largest category in both OOH and Radio, pipping FMCG.
4. Although cinema registered the highest growth of 36 per cent, to reach Rs 776 crores, it has yet not reached its pre-Covid levels; its share has marginally gone up from 0.60 per cent to 0.80 per cent.

Sharing the highlights of the report, Sam Balsara, Chairman, Madison World said, “Whilst the Outlook for Adex in India is extremely strong in the mid-term and long-term, in the short term we are witnessing a slow down in momentum because of India Inc’s focus on quarterly profits. This does not augur well for sustained growth in profits for Advertisers who should be focussing on volume growth.”