Indian advertisers are beginning to loosen their purse strings. Group M's annual TYNY (this year next year) forecast on adex spends projects a 23.2 per cent growth in 2021. Advertising spends declined by 21.5 per cent last year (to Rs 65,053 crore). However, compared to the total ad spends of Rs 82,904 crore in 2019, the ad spends projected for this year is Rs 80,123 crore. This means that ad spends in 2021 would still be lower than what it was in the pre-COVID era.
As the country shut down to fight the deadly coronavirus, consumption also came to a halt, resulting in brands cutting down their ad spends. While print publications transitioned to online editions, TV channels which ran out of original programming had to make do with their own promotional inventory. Digital platforms gained enormous traction as consumers lapped up online content and spent longer hours on social media. However, this didn't necessarily woo advertisers to advertise on digital platforms last year.
While print was among the worst impacted with a 43 per cent decline in advertising revenue, TV advertising de-grew by 14 per cent and digital by 2 per cent. TV and digital managed to make up some lost ground in the second half of 2020 when the markets began to open, and consumption picked up. Movie theatres, which had reported a robust 25 per cent growth in 2019, de-grew by 83 per cent, while outdoor advertising declined by 69 per cent last year.
The TYNY report projects digital to grow the most in 2021. The report says that digital advertising spends are expected to be at Rs 27,700 crore, 28 per cent higher than last year, while TV ad spends are expected to grow by 18 per cent at Rs 35,914 crore. Print is also expected to have a far better run this year. The report projects ad spends in print to increase by 23 per cent to Rs 12,731 crore.
Conventional marketing wisdom encourages marketers to spend more on advertising during a downturn in order to build trust and bonding with consumers so that they come back to them when times improve. The COVID-19 lockdown created a strange situation when companies' supply chain mechanisms had come to a complete halt. When their products were not able to reach the shop shelves, brands shied away from advertising.
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