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TV ad spends to fall 18% in 2020 as 1,200 advertisers stop spending

Since advertisers are beginning to loosen their purse strings in the 'unlock' phase, ad spends are expected to see a 60-72 per cent growth in the second half of the year

twitter-logoAjita Shashidhar | August 19, 2020 | Updated 22:56 IST
TV ad spends to fall 18% in 2020 as 1,171 advertisers stop spending
While TV viewership has seen its highest ever surge during lockdown, it has not translated into ad spends growth

The coronavirus lockdown has resulted in as many as 1,171 advertisers putting a complete halt on their television ad spends, while many large advertisers cut their spends dramatically. Handset manufacturers, auto companies, consumer durable companies, jewellery, cosmetics and other discretionary brands stopped advertising following the Covid onslaught and lockdown, while a few hygiene and home care brands have continued advertising. Among major advertisers, HUL, Britannia, Maruti and Hero have all cut ad spending drastically. No wonder television advertising as per the Pitch Madison Advertising Report de-grew by 13 per cent in the first quarter of  2020 and 61 per cent in the second quarter. Though television has seen the highest ever surge in viewership during the lockdown, it has not translated into AdEx growth.

The overall television ad pie has de-grown by 43 per cent in the first half of 2020. The overall AdEx in 2019 was Rs 67,603 crore, while the first half of 2020 saw the steepest ever drop of 39 per cent (Rs 21,298 crore) compared to the first half of 2019. The Madison report expects the overall AdEx in 2020 to fall between Rs 55,000 crore and Rs 58,000 crore, a 14-18 per cent dip over last year.

Since advertisers are beginning to loosen their purse strings in the 'unlock' phase, the report expects the second half of the year to see a 60-72 per cent growth in ad spends. "It should grow anywhere between 6-13 per cent versus H2 '19 on the back of the festival season," the report says.

But the dramatic growth expected in the second half won't compensate the hit the industry has suffered in the first half. "H2 AdEx will primarily depend on demand coming back in markets which will depend on sentiment and consumers' outlook of the immediate future, which in turn will depend on when government and private offices are allowed to open and work on regular basis," the report further adds.

While televison in 2020 is expected to de-grow by 14-18 per cent, print advertising is expected to suffer a hit of 31-36 per cent and radio would de-grow by 31-40 per cent. The only sector that is expected to see a robust growth in terms of advertising spends would be digital (12-18 per cent growth). Even during the peak of lockdown when TV and print de-grew by 43 per cent and 51 per cent respectively, digital de-grew by just 7 per cent.

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