Hopeful of a good festive season, will Print reach pre-Covid AdEx this year?
After two years of subdued celebrations, brands and advertisers are pinning a lot of hope on the festive season this year. Marketers have crafted special campaigns across mediums, which has also given hopes of revival to the print industry. The sector, which is already confident because of a good first quarter in general, is optimistic that the festive spending will increase AdEx by at least 15 per cent as compared to the festive quarter of 2021.
While an uptick in AdEx is almost certain, the question that the industry is faced with is: Whether the festive season push will help the print sector reach pre-Covid levels?
Varghese Chandy, VP-Marketing & Advertising Sales, Malayala Manorama, is optimistic that the AdEx will return to pre-Covid levels. "We're getting closer to 2019, and we're trying to hit that mark this year. We hope to achieve 100% of the 2019 level," said he.
“Onam marks the start of the festive season in India and all advertisers throughout the country look to Onam to get a sense of what is in store for the rest of the festive season,” said Chandy, adding, “It appears that Onam will be an excellent one. We can see that both local and national companies have been advertising in a frenzy since August 1.
Girish Agarwal, Non-Executive Director of DB Corp, too expressed similar sentiments during their Q1 FY23 earning call. Asked about the recovery of the sector by Q3, which is the festive period, Agarwal said, “I can say yes, we are trying for it. There are two challenges: Yield improvement and ticket size improvement. At the negotiation table, you may decide for either of them, so we are taking a call accordingly.”
Mohit Jain, President of the Indian Newspaper Society (INS) believes that the industry will see significant and genuine market buoyancy. "The overall AdEx is not yet back to pre-Covid levels, we are behind it. But the journey is on and we must remain patient," he said, while mentioning that various industries are recovering and it will only benefit the overall AdEx and also the print sector.
“Year 2020 was not favourable for the industry. Year 2021 witnessed a comeback, but it was not up to the mark. Sentiments toward the festive season are expected to improve this year,” he shared.
According to the EY FICCI 2022 report, the print segment rose 20% in 2021 to 77% of pre-pandemic levels. Overall advertising revenues remained 27% lower than pre-Covid times, though ad volumes rebounded 32%. While advertising in English newspapers returned to 63% of pre-Covid-19 levels, it reached roughly 78% in Hindi and regional language publications.
Taking a cue from advertising during Independence Day celebrations, Navin Kathuria, EVP – Integrated Media Strategy, DDB Mudra Group, opined that print AdEx could expect a growth of anywhere between 15% and 17% in the festive quarter as compared to the festive quarter of 2021.
“If the response to print advertising in the Independence Day scenario is anything to go by, this festive quarter should be significantly better as compared to the previous two years. Print AdEx could expect a growth of anywhere between 15% and 17% in the festive quarter as compared to the festive quarter of 2021. However, it still might have to struggle to reach the 2019 levels on an annual basis in 2022.”
Looking back at the past two years, Kathuria, said print media got majorly affected due to Covid 19. After a huge dip in terms of revenue in 2020, almost to the tune of 40-43% and space utilisation of 35-37% vis-à-vis 2019, print did show recovery in 2021.
Kathuria mentioned though revenue and volume increased by 37-38% and 30-31% respectively in 2021 over 2020, it still did not reach the pre-Covid levels of 2019, falling short of almost 16-17% on both revenues and space utilisation vis-à-vis 2019.
However, he said, the festive quarter did show a rise in revenues even when compared to the pre-Covid festive quarter of 2019 by almost 10-12% and space utilisation by 6-7%. Given this trend of a healthy festive quarter despite the second Covid wave in 2021, the festive season of 2022 could be predicted to be a healthy quarter for the print industry.
According to the EY FICCI report, FMCG, education, auto, and real estate continued to be the top spenders in print in 2021. FMCG, education, car, real estate and home improvement and retail accounted for 57% of ad revenues. In 2021, they all spent more than Rs 1000 crore on print. However, with the exception of education, their spending was still lower than in 2019.
Talking about the advertising yield during the earnings call, Agarwal explained that some categories' yields are already higher than the pre-Covid level, but some categories are still struggling. “It is a function of the category behavior in the market. So, for example, in the real estate category, we are higher than the pre-Covid level because that category has already bounced back in a big way. But our auto sector is still struggling.”
He also mentioned that education is the sector that contributes the most because of the education season falling in Q1. It is followed by government, real estate, and FMCG.
"Education is one of three areas that are declining and having an influence."
Recently released AdEx-Print Advertising Report (for the period Jan-Jun’22) by TAM, also states that ad space in the first half of 2021-22 grew by 40% and 90% compared to the same period of 2020 respectively. In H1 2022, the ad space increased 32% over the corresponding period in 2021.
Dinesh Singh Rathore, Madison Omega's CEO, said, "The print business is performing well. Newspapers still feature numerous advertisements and large-size formats. There are even certain days when the number of jacket newspaper advertisements is high, a sign that the industry is on the mend. They're also receiving strong backing from marketers, and the fact that marketers are re-embracing print indicates that customers are returning to it.
"Indications point to the sector returning to levels seen before Covid," he added.
Echoing the thought, Kathuria mentioned that while conventional festive categories such as e-commerce, fashion and clothing, sweets, snacks & confectionery etc will be on print, categories like real estate, which has utilised print in 2022 even during non-festive periods, is also expected to be aggressive. Other categories expected to be aggressive are home renovation/improvement materials, media/ OTT, movie releases, jewellery, local retail. If 5G launch plans go well, one could even expect a telecom blitzkrieg on print this year, he added.
He explained that there are several reasons for a positive outlook: opening up of offices, cities/ towns returning to normalcy, curbs on gatherings being lifted up/ events, sports events being conducted with audiences in the stadiums / grounds, success of the vaccination drive etc.
“People have been missing celebrating the festivities together. With the above factors in play and the consumer enthusiasm playing a part, advertisers will be utilising print in larger magnitudes as compared to the past two years.”
The print industry,meanwhile, has seen a good first quarter. A number of print companies reported strong growth both in circulation and advertising revenue in their first quarter results, giving a positive start to the new fiscal year.
For DB Corp Ltd, the advertising revenue jumped 96.6% to Rs. 336.9 crore as against Rs. 171.3 crore in Q1FY22 and circulation revenue grew by 4.5% to Rs.115.6 crore as against Rs. 110.6 crore.
Similarly, HT Media's ad revenue from the print media segment rose 82% to Rs 240 crore led by an uptick in volume and improvement in yields. Circulation revenue from the segment was up 20% to Rs 60 crore due to an increase in print orders and realisation per copy for both English and Hindi.
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