GroupM has unveiled its annual 'This Year Next Year' report - its advertising expenditure (adex) forecasts for 2021.
As per the report, India's advertising investment will reach an estimated Rs 80,123 crores this year, representing an estimated growth of 23.2% for calendar year 2021.
According to the report, India will see a major recovery in 2021, and is likely to regain its ninth spot in global ad spends, which dropped to tenth in 2020.
The Covid-19 pandemic created a fall of 21.5% to India's adex in 2020. India, the second fastest growing market in the top 10 countries, will be the sixth largest contributor to incremental ad spends in 2021 globally, according to the GroupM report.
Print has witnessed the deepest impact in value, but is forecast to grow by 23% in 2021, along with TV by 18%, outdoor by 69% and cinema by 197%. Digital, on the other hand was the least impacted in 2020 and is predicted to grow by 28% this year. It was the only medium to witness a gain, as it received growth of US$ 27bn globally in 2020.
The global ad spend for 2021 is estimated to grow by 10%, whereas the Indian spend share by media will be 45% for TV, 25% for digital, 16% for print, 2% for outdoor and 1% for cinema.
While Covid-19 resulted in an overall slowdown in the global economy, Indian ad spends will continue to see a month-on-month recovery considering the overall media landscape.
Prasanth Kumar, CEO - GroupM South Asia, said, “2020 was an unprecedented year. The pandemic impacted across sectors and it, therefore, affected the media investments too. As we are aware, the year that went by had a mixture of lockdowns, many restricted market momentum and overall threw a challenge and impacted multi-industry economies. The ad industry too, had its challenges and 2020 witnessed a steep drop in the overall media investments. However, we have witnessed a month-on-month upturn in the industry starting Q3 last year and we are quite optimistic about the revival that 2021 will see. With the gradual easement of the lockdown backed by seasonal spends and big-ticket events like IPL, we expect 2021 to continue to build on that momentum. While the global ad spends are estimated to see a rise of 10% in 2021, digital is expected to take 67% of ad spends. With the help of technology, marketers have adapted to pandemic-proof ways by constantly innovating, staying relevant and offering digitally charged solutions to brands.”
Tushar Vyas, president - growth and transformation, GroupM South Asia, said, “2021 will see 90% incremental ad spends on digital globally. The massive switch to digital reliance over the past one year has been a major driver for this shift. Brands have been forced to think big and different to transform their businesses, match the newer expectations and overcome the challenges faced. The post-pandemic era will continue to see this upsurge in digital demands. The crisis has brought about a sea change in mindset, adoption, and role of technology in doing business. Brands are seen renewing their business models and are constantly ideating to find better ways to connect with the consumer on a digital tangent.”
Ashwin Padmanabhan, president – partnerships and trading, GroupM India said, “Based on a strong foundation built on the back of FMCG and e-commerce, 2021 is expected to see growth across sectors like auto, telecom, consumer durable, retail and education. Manufacturing, which was severely impacted by the pandemic, is now stabilising and moving toward a positive outlook enabled by automation, technology and supply chain optimisation. 2020 has accelerated the adoption of agile, cost-effective business models, which will help brands and marketers offer better products, services and experiences to consumers.”
Sidharth Parashar, president - investments and pricing, GroupM India said, “Along with digital, television saw a spike in consumption during the lockdown. With acceptance on the subscription bandwagon increasing, OTT will continue to witness constructive growth and is likely to develop with more players attracting users by investing in content. Print & Radio expected to be backed by local advertisers and certain categories with marketeers leveraging the brand solutions that these media offer. We expect OOH and cinema to see double-digit growth after a difficult year. Given the uncertainty and cautiously spending consumer, brands are realising the importance of being present wherever consumers are. Hence along with continued relevance of television and other mass media, we will witness advertisers leveraging relevant platforms to reach out to its audience.
GroupM also predicted ten trends that will influence the ad industry:
1. From carefree to conscious: During the lockdown, there was a 42% growth in searches to know 'what's normal' for body stats like BP, body temperature and blood sugar. Browsing content on healthy cooking went up by 100%. This points to a marked change in what the user is seeking, towards self-preservation and wellness. This behaviour change will also imply how they look at brands and consumption at large. Consumers are also more likely to embrace brands who showcase empathy and care about the larger world/environment.
2. Everything is becoming hyperlocal: There was a surge in regional language news and content during the lockdown. Capability to sharp shoot communication has increased – for example, one can do pincode level targeting, thanks to multi-faceted data points on the audience or targeting based on distribution pattern or market share in specific locations. Every 15-20 km, the language, dialect, music, food, changes in India and brand owners have an opportunity to leverage this and drive precision at scale.
3. Driving up the subscription bandwagon: 2021 has smashed the adage that 'Indians don’t pay for content' and drive up the subscription game for sports and other forms of quality original content. There are many OTT players who have achieved their subscribers target 12-18 months ahead of time.
4. Gaming and E-sports growth – more than time pass: Gaming will become not just about time spent but also a cultural destination. The nature of this entertainment is not a lean back but a more immersive one. Music concerts and other experiences will also be activated on esports platforms. In peak lockdown during April 2020, there was an 11% increase in users per week and has seen a rise in the number of gamers where 66% of new gamers are females and 56% of new gamers are above the age of 45.
5. Platforms will become creator-led rather than community-led: As we move towards an ecosystem where people join platforms more for the experience and creators on it, we are possibly looking at four to five different platforms with a 100 million plus user base, not far from now. Influencer content for brand building will sustain but a majority of categories will move towards a performance mindset for advocacy. Newer platforms, driven by creators already have seamless commerce features built-in. This will spur content-to-commerce in a big way in 2021. The journey from platform-based advocacy to an integrated strategy for brands will now scale to include commerce as well. This will also bring in more industry guidelines on influencers disclosing brand partnerships.
6. Immersive audio becomes a cultural movement: Audio has truly made its comeback in style. Platforms like Clubhouse are seeing great traction and the audience for podcasts has grown manifold in India in 2020 and the MAUs are already where social media was a few years back. In India, standards and guidelines will emerge and be solidified, as we are reaching critical mass. Given the proven efficacy of audio on brand recall, this will be extremely critical for brands looking to make cultural interventions.
7. Digital transformation – ROI to opportunity cost: Leaders are aggressively deploying new tools, data and cloud infrastructures, the digital transformation process got accelerated post-Covid. This will help create a new age 'marketing digital infrastructure' and replace old tech which was becoming a barrier to fast-track digital transformation.
8. Streaming wars - in a device agnostic world: The pandemic turned out to be an opportunity in a crisis for the OTT industry in India. Connected TV is simply becoming the new TV. The fact that it is more targetable and measurable than ‘old TV’ enables marketers to elevate and personalise their messaging when appropriate. So, it can be the best of both worlds. Growth in SVoD may sound bad news for advertising, as largely SVoD platforms are ad-free. But in India, the home-grown broadcaster and independent OTTs at an early stage only has adopted hybrid multi-tiered monetisation model by giving the audience the choice of both free, ad-supported content and premium subscription offering. In 2021, this advertising channel will continue to have a lion's share in programmatic spends and will also bring incremental budgets from the traditional/linear TV pie. With increased spends, we will also see advertisers adapting to more evolved, efficient and effective programmatic buying methods like PMPs (Private Market Place) to get a unified consumer view, thus, maximising the ROI from video spends.
9. Connected commerce - the customer-convenience imperative: E-commerce platforms have become an indispensable digital channel to reach target audiences and influence sales. In 2021, we will see a big shift of spends happening from current market-leading DSPs especially in display channel towards the new age e-commerce DSPs like Amazon, Flipkart, Paytm. Categories where spend shift is quite inevitable are FMCG, BFSI, grocery, apparels, health and personal care, as ecomm DSPs offer end-to-end marketing funnel solutions with efficient ROAS.
10. Bringing creativity back into digital advertising: The industry is recognising that creativity is the first step to grabbing attention and enhancing the influence, and media buying should aim to match advertising messages with real consumer behaviours, not just attributes. Brands need to embrace AI to boost personalisation at scale. With increased social commerce share, AI-based hyper-personalisation engines will be the need of the hour, as it will improve both ROI and customer experience.