The year 2023 started with predictions of high AdEx growth of 16 per cent, but there is little that has converted into reality so far. The advertising industry is currently under pressure as most marketers are holding on to their spends. If sources in the industry are to be believed even the ongoing IPL has not been able to generate the necessary upswing for the sector, though it has definitely brought some respite. The industry, which is seeing a 25-30 per cent decline in business, is now pinning its hopes on the IPL, upcoming monsoon season, cricket world cup and the festive season in the third quarter.

Says Vishal Chinchinkar, CEO Madison Digital and Madison Media Alpha, “Our estimates for overall growth in AdEx in 2023 is 16 per cent, as mentioned in Pitch Madison Advertising Report. But we know that media AdEx is correlated to GDP, and last month, some rating agencies brought down our GDP growth forecast for 2023 from 6.5 per cent to 5.5 per cent. So this will have some impact on the overall spends. However, on the brighter side, we hope the monsoon is good this year, as this would encourage spending from the largest contributor to AdEx, the FMCG sector.”

Mayank Shah, Senior Category Head, Parle Products, echoes the feeling. “We hope that the ad market will ease out after the monsoon, which is likely to be good this time. This will help rural demand pick up. Inflation has already come down. So, the first quarter of FY24 is expected to be better in terms of marketing spends.”

Abheek Biswas, AVP – Consumer Insights, dentsu India, also believes that the market situation is getting better with IPL seeing a decent response. “The overall sentiment has been witnessing improvements with the Indian economic scenario looking positive, owing to various government initiatives, structural reforms, improved infrastructure and increased foreign investments, among other factors. Also, IPL most definitely kicks off the summer season with a multitude of categories riding on it. We will see more positive movements post IPL,” says Biswas.

Talking about the factors that have led to the fall in AdEx this year, Vishal Shah, Managing Partner, EssenceMediacom, outlines some global factors but says that India should be able to deal with them better than other economies.

“Ad spends have been under pressure post the festive period in 2022. This is due to factors such as increased raw material cost due to a possible war hitting the world soon. Secondly, China and many other countries are still struggling with the Covid pandemic. Consumer sentiment is likely to get affected if the situation continues to worsen. Thirdly, start-ups have cut their ad budgets as VC investments are drying up. They were one of the bigger spenders until last year,” says Shah.

He adds, “Considering all these factors, there is a high risk of recession, especially in the developed nations. While today no country can be insulated from global impact, India to a large extent is in a better situation and cushioned off. A likely recession will impact India, but very marginally, because our economic outlook appears to be stronger compared to most other markets.”

Shah, however, claims that substantial investment is happening across many verticals of digital, like e-commerce, gaming, OTT, social, video and more, which continue to see a huge uptrend.

“CTV, performance marketing and digital marketing are areas where brands are investing heavily. Many of these spends are not centrally reported and hence a clear picture is not visible to everyone. I believe properties like IPL and cricket world cup will bring in the zest and pull for advertisers,” he added.

Hoping of spikes in AdEx in the first and third quarters of the financial year, Chinchinkar shares that factors like new launches in the real estate & auto sectors, cricket tournaments, rapid rise in spends from SME business, increasing spends on digital media & growing consumer confidence will boost the media spends.”