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After a decent showing in the first half of the year, the TV broadcasting industry is hoping to register a stronger advertising growth in H2 due to a likely bump up in ad spends by both traditional and new-age categories.
Ad sales executives and media agencies assert that the TV AdEx grew in H1 2022 despite multiple challenges like the impact of the Russia-Ukraine war on the global economy and inflation impacting volume growth for the fast moving consumer goods (FMCG) category, which is the single biggest spender on TV.
If the first half of the calendar year was helped by the presence of the India Premier League (IPL), the second half promises to be even more action-packed as broadcasters have high-impact properties lined up across sports and entertainment genres.
IPG Mediabrands India CEO Shashi Sinha is cautiously optimistic about the overall AdEx growth considering the macroeconomic challenges that continue to engulf the Indian economy. Sinha said the AdEx growth in H1 2022 was good but lower than expectations particularly due to challenges posed by inflation.
While Sinha is optimistic about ad growth in H2 2022, his main concern is whether the advertising industry will realise its full potential since inflation has not subsided even though it is not going up. “For our business, September-December is a very strong period. It comprises almost 40-45 per cent of the revenue. Our hope is that it will be better than last year but whether it will attain its true potential is still a question mark,” he stated.
Sinha said H2 has a supply of good content whether it is sports or non-fiction impact properties. He, however, pointed out that new-age advertisers, who are big buyers of high-impact properties, are looking to conserve cash since fresh funding is hard to come by in a recessionary economy. “A lot of these properties are bought by digital companies that are under pressure because of funding woes. We need to watch out for that,” he cautioned.
Mindshare South Asia CEO Amin Lakhani said H1 saw significant ad spend growth across mediums, including TV. Lakhani added that H2 will witness stronger growth despite a slow start in the initial period. “The growth momentum will continue due to the presence of marquee properties and the festive season in H2. Of course, there are concerns circling around inflation, but so far our experience has been that there are clients who have spent well in the first half and are planning to spend well in H2,” he asserted.
While admitting that the start-ups are exercising more caution, he added that the agency’s clients from the new-age category continue to spend well on advertising. “There is some rationalisation that we have seen but largely there is growth. The fashion category is showing a lot of promise in H2 and going forward. We will see a lot of action happening in that space. This category has been waiting to fire.”
ZEEL Chief Growth Officer Ashish Sehgal said H2 is always big due to the festive season. He also stated that H2 comprises almost 55% of the total AdEx. Sehgal believes that the strong sales growth in August due to Raksha Bandhan has set the stage for an eventful second half.
Sehgal also suggested that sales growth for FMCG and non-FMCG categories will improve if the inflation tapers down further. He stated that the softening of crude oil and palm oil prices will help FMCGs to plough money back into advertising to push volumes up.
“Within FMCG, the food category is showing good growth. Personal care has also started to grow. The hygiene category had tapered down a bit but now it will pick up. Auto sales have also improved, so that will give them a buffer to spend extra money in the second half. Auto companies also have new launches lined up in H2. Telecom operators will also spend because they will be rolling out 5G services. BFSI is also becoming very active. New-age advertisers will continue to be cautious because their P&L is under stress. However, D2C businesses will have to spend during Diwali to grow their sales,” he explained.
A senior ad sales professional said that the industry has pinned its hopes on H2 due to the festive season. “The festive season last year had surpassed the growth in the 2019 festive season. There are a lot of takers for high-impact properties in the market. We are headed for a great festive season. Traditional advertisers will spend strongly because the festive season is an important period for them. The new-age advertisers will also not want to be left behind despite the funding woes,” he added.
Dentsu-owned Amplifi’s Chief Investment Officer Sujata Dwibedy said the TV AdEx in H1 was not much impacted by the Russia-Ukraine war and the start-up funding woes began a little later in H1. “By then, the money on IPL was already locked in. Also, we need to realize that in 2021 only half of the IPL was played, as May and June were fully impacted by the second wave of Covid-19 in H1,” she said.
IPL and other cricket/sports properties have lifted the AdEx in H1, Dwibedy said. “However, in H1, post-March, we also saw some key FTA channels moving to paid, leading to a loss of revenue and a drop in AdEx,” she added.
According to Dwibedy, regular advertisers which were refraining from advertising have made a huge comeback. “While bigger growing categories like FMCG, e-commerce, consumer durables, and pharma witnessed an increase, categories like travel and tourism, real estate, retail, and BFSI too sprang back.”
On H2 2022, she said AdEx growth is inevitable since it is a festive period. Add to that, there has been a very minimal impact of Covid-19 in 2022. “After almost two years, the impact of Covid-19 is less this year, so most of the advertisers have big plans.”
Dwibedy said clients who have been quiet for a while now, have reached out to the agency for big campaigns during the festive seasons. Print and OOH have also seen a complete revival. Looks like a hugely positive year ahead, she stated.
Wavemaker India Chief Client Officer and Office Head – North & East Mansi Datta said the AdEx in India is expected to grow at 20% in 2022 vs. 2021. “This festive season is expecting the quintessential spenders like FMCG, consumer durables, and fintech category to fire in a big way. However, some of the categories that were previously big spenders like auto, edtech see a gloomier forecast because of macro conditions,” she added.
Zenith SVP & National Head – Media Buying Ramsai Panchapakesan said TV AdEx in H1 saw a steep growth. The number of brands advertised on TV saw an increase. He also said 49% of advertisers on TV are returning/new advertisers.
On the projections for H2, Panchapakesan said August being a festive precursor month has seen a good sales volume and this is expected to increase further during the festive season. He also said that the festive season brings in a whole set of seasonal advertisers. Broadcasters, he added, have also lined up an impressive content lineup of new movies/original content/format shows.
“The spending is going to be in line with corresponding year base with an expected growth of 9-10 per cent during the festive season. Current year’s 15-18 per cent growth in annual spends is also on the back of festival ad spend. In terms of size, the Indian ad market will touch $11.5 billion in 2022 from $9.7 billion in 2021,” he stated.
Leaning on the side of caution, DDB Mudra Group Country Head & Managing Partner – Integrated Media Rammohan Sundaram said it will be a tough H2 to maintain given the reduction in spending by new-age companies. “It is not going to be easy given several brands have pulled out of major sporting events to focus on profitability. So while you might still see them advertising, their spends on impact properties and sponsorships will reduce and will be focused on only FCTs with lesser frequency,” he stated.
He also stated that the growth in H1 was due to increased spending by quick commerce, auto, BFSI, and FMCG. The presence of IPL played a major role in lifting the ad spends. “While H2 has many cricketing events in the calendar, the dependency of India performing well will be a big aspect for advertisers to consider especially around World Cup T20 in Australia, which falls right at the centre of the festive season,” Sundaram contended.
Madison World Chief Buying Officer Vinay Hegde said the AdEx in H1 of 2022 has shown some rebound except for a slight dip in May-June. He also said that the AdEx in H1 would have been healthier had it not been for factors like funding woes for start-ups leading to lay-offs and supply chain issues for the automobile sectors.
He further stated that RBI’s monetary policy report for August 2022 spells good news for the economy. The report states that monsoon is above average, industrial and services sector activity is holding up, urban demand is back, and rural is catching up.
“These are the positive factors indicating strengthening of domestic demand. Add to this, moderation of inflation, expected bonus payment for the salaried, and zero Covid-19 restrictions. All these factors mean improvement in consumer sentiment. Brands, which keep aside a major portion of their annual budgets for the festive season, would want to use this period to woo the consumers,” he stated.
That said, he feels that the volatility in crude oil prices and the appreciation of the US dollar may feed into the inflation and result in some cautious optimism which may come into play post-festive.
“Premium electronics, smartphones, apparel, personal and cosmetic care products, and consumer durables are expected to be the hot categories this festive season. E-commerce, fintech, travel, and tourism are the other categories to watch for. FMCG is also expected to maintain its momentum. With maximum budgets parked for this period by most brands, this is expected to be a highly heated festive season,” Hegde said.
IN10 Media Network Head – Revenue (Broadcast) Kavita Sagar said the year started well for the industry with the first four months seeing a build-up. “However, post that, we saw a downward trend with a decrease in client count and spending’s diminishing across categories,” she noted.
August, she said, started on a positive note as a build-up to the three months of the festive period. “The ad-spend graph is once again seeing a positive trend with advertisers across categories increasing their ad spends.”
She also stated that broadcasters are investing in creating special content to boost viewership during this period. “And with advertisers seeking more opportunities to reach out beyond metros, channels catering to the HSM with a deeper penetration in tier 2 & 3 have an opportunity to cater to their needs.”
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