AdEx continues to surprise us year-after-year either positively or negatively, said Sam Balsara, Chairman, Madison World, at the unveiling of Pitch Madison Advertising Report (PMAR) 2024.

“Covid-19 is behind us, but the global political situation, uncertainties, dull round of winter funding, and more uncertainties have accounted for the slow growth of AdEx 2023 by 10%, against our forecast of 16%. Despite the Indian GDP projected to grow by 7.3%, this is the lowest Indian AdEx has grown in the last six years (apart from the pandemic years),” said Balsara as he kicked off his speech commemorating the launch of the 21stPitch Madison Advertising Reportand its two- decade-long journey.

Balsara shared "perspective on what happened, why it happened, and what to expect from the coming year".

The Indian AdEx 

Balsara highlighted the slow growth trajectory across mediums and stated that there was a huge slowdown. "The digital medium only grew by 15% against our projected growth of 25%, slower than the growth rate of 35% in 2022 and 50% in 2021. Traditional AdEx is still growing in India with a slow growth rate y-o-y, but it grew only by 7%. Television grew at 7%, below our forecast of 9%. Print, the second largest traditional medium, has registered a single-digit growth of only 4%. Radio grew by 12%, maintaining its share of 2.3%, and has almost matched the pre-Covid level of 2019. Outdoor AdEx reached a 13% increase over the previous year and has crossed its pre-Covid level," he shared.

He, however, mentioned that the growth rate of global AdEx makes Indian AdEx look good though. "The global AdEx is estimated to be 971 Bn USD in 2023 with a growth rate of 5%, as opposed to the Indian AdEx growth rate of 16%. Digital dominates the global AdEx with a share of 73%. India is one of the top 11 nations that contribute to 63% of the global AdEx with a share of 1.2%".

Balsara also mentioned that the AdEx numbers may be in dissonance with financial year reports of companies, as TV only grew by 7%, Print by 4%, Radio by 12%, and OOH by 13%. "TV stays behind Digital, Print is losing its share y-o-y and contributes 19% of overall AdEx".

For traditional media, FMCG continues to be the largest contributor with 33% share adding almost Rs 1,500 Cr in the year 2023. E-commerce continues to be the second largest category, with a share of 11.3%. Education with a spend of Rs 2,610 Cr has dropped by 33%, mainly because of the drop in Edtech. The automobile sector is the third largest AdEx category.

Top Advertisers Of AdEx 2023 

Balsara shared that the top 10 advertisers grew 2x of total advertising growth, and there were only have 11 new entrants in the list, with only one start-up as compared to nine last year. "Start-ups have slashed ad spends in the uncertainty of future funding," he said mentioning the reason for reduced ad spends from start-ups.

Hindustan Unilever, Reckitt Benckiser and Reliance continue to be the top three advertisers, Godrej increased spends by over 50%. Mondelez, Maruti Suzuki, Coke India, and Dream11, make up the top advertisers' list.

Digital AdEx 

Balsara shared that Digital seemed to have had a “speed breaker”. Digital AdEx grew only 15% in 2023, as compared to 50% in 2021, and 35% in 2022. But the medium increased its share of AdEx to 40%.

He reckoned, "It would be misleading to only look at financial data from advertisers, as to what caused the slowdown of Digital. Start-ups who earlier focused only on the top line, thanks to the easy availability of funding at inflated valuations, are now in distress to find further investments to keep their business afloat". He also shared that housewives, SMBs and smaller advertisers make up a substantial chunk of digital advertisers.

Outlining more factors that have slowed down the growth of Digital, Balsara shared that EdTech firms have stopped their huge spends. Gaming money has crippled because of the government’s 28% GST imposition, while cryptocurrency is also facing restrictive government regulations.

He also points out a notable insight that in global AdEx, Digital accounts for 73%, whereas, in India, it’s only 40%. In China & UK, it's even higher at 80%.

Talking about the q-o-q growth, Balsara mentioned that Q1 and Q2 have been low at just 4% and 6%. The growth rate in Q4 is 27%. E-commerce platforms have now seen high traction amongst advertisers registering a growth of 25% over the previous year, a dramatic increase in over two years. Video spends continue to be the largest category within Digital with a share of 33%. Video accounts for over 46% of total AdEx or as much as Rs 45882 crores, when you add TV and CTV (as video), Balsara said.

Television AdEx 

Television stands at 33% share of total AdEx in 2023. TV AdEx, without the sports genre, would have only grown by 4%, since Digital took over the 'numero uno' status. TV AdEx has moved up and is now at Rs 32,886 crores, but its share is steadily declining from a high of 42% in 2020 to 33% in 2023. The FMCG category’s share rose from 45% in 2022 to 47% in 2023.

Hindi satellite mainline along with second line and sports are the two major genres and contribute to almost 50% in value. But Hindi satellite marginally de-grew in FCT, while sports increased its FCT by 8%. Hindi movies de-grew by 6% and English niche, English movies and Infotainment de-grew around 30% by volume. Marathi Regional, on the other hand, has grown by 9%.

Print AdEx 

Print AdEx has grown by 4% on the back of 11% growth in 2022, maintaining a high share of 19% compared to the global share of 4%. This, stated, Balsara showed the resilience of the Print medium.

Print failed to reach its pre-Covid high of Rs 20,045 Cr and reached only a figure of Rs 19,250 Cr. "Print in 2014 was at Rs 15,274 Cr, and today, after 10 years, is at Rs 19,250 Cr, which means a Compounded Annual Growth Rate of only 2%", he shared.

Auto, FMCG, Education, and Real Estate contribute about 43% of Print AdEx, with Auto being the leader with a 14% category contribution to Print AdEx. Hindi and English Publications contribute over 64% to the total Print Advertising space consumed in India.

OOH AdEx 

OOH AdEx will grow by 13% in 2023 on top of a 68% gain in 2022. Balsara stated, "Believers in OOH are rushing to intensity. OOH has maintained its share of 4%, similar to the global OOH share. After the Covid-19 crash, there has been a steep increase in OOH spends. Real Estate maintained its lead, with a 19% category contribution share.

Radio AdEx 

Balsara shared that radio's growth to recovery has been decent, and has now reached pre-pandemic level.  Radio’s share seems to have stabilized at just around 2%. Radio AdEx continues to be held by Real Estate at 16% followed by FMCG at 12%, Auto at 11%, and BFSI at 9%. In terms of growth, Auto registered a 48% growth.

Cinema AdEx

Balsara shared that despite several blockbusters being released, with at least one in each month, Cinema AdEx in India grew by only 36% on a very low base as against projected growth of 75%. Cinema advertising continues to contribute less than 1% of the total Indian AdEx. "It reached close to Rs 800 Cr. Several years ago the prediction was to reach Rs 1000 Cr, he mentioned.

 Growth Forecast For 2024

"The global uncertainty and the negativity of the Western world will have some predicament for Indian AdEx.  The growth forecast for 2024 is 12%, close to the global forecast of 8.3%." The estimated Indian AdEx for 2024 is Rs 111110 cr.

He highlights an economic insight by Nagaraj Krishnamurthy, Co-Founder m: Funnel & Adviser, Madison Media, who states that one of the three components of the private final expenditure component is estimated to come down. He points out that marketers may understand why the consumption of products and services may come down by paying attention to this insight.

Balsara states, "The T20 World Cup, heavy spends by political parties and aggressive reforms to stimulate the economy show optimism. But global uncertainties, war and funding winter are likely to continue. We expect no medium to de-grow, while digital will continue to be a key driver. Linear TV will continue to grow as large advertisers believe in the power of brand building on TV."

Advice For Marketers

Balsara concluded his speech by sharing some advice for marketers on the way forward. He states, "My advice is to focus on premium products as there are a growing number of consumers buying larger cars, more gizmos and spending on travelling abroad."

He further advised advertisers to focus on modern trade, as it is growing at a faster pace than kirana stores. He closed his session by emphasizing the urgent need in the industry for advertisers to establish a common measurement system for multimedia campaigns. "We cannot expect multimedia owners to conflict upon a common methodology".