Pitch Madison – India Adex to grow 26% this year

Print adverting expenditure to also recover sharply

Sam Balsara Adex
Sam Balsara of leading media agency Madison presents the Pitch Madison India Adex report for 2021

Advertising expenditure (Adex) in India is forecast to grow by 26% in 2021 to Rs 68,325 crore (approximately US$ 9.42 billion), almost the same level as 2019, according to a recent report by Pitch Madison. The sharp jump back in Adex is expected thanks to a robust recovery in economic growth. The steady rollout of the Covid-19 vaccinations in the country will also contribute to the rescue.

The last time the Indian Adex grew by 26% or higher was i n 2010 when it grew by 28%, following the 9% de-growth in 2009. “With a growth rate of 26%, we estimate that India will be the fastest-growing advertising market in the world, followed by the UK (14.7%) and Australia (13.2%), going by the WARC estimate of growth of global markets” Pitch Madison said. 

Pitch Madison expects a wide variety of growth rates across mediums, with digital growing by 25%, adding Rs. 4,226 crore to its share. In traditional media, it expects print to add as much as Rs. 4,175 crore and achieve a growth rate of 35%. It expects outdoor media to add Rs. 1,158 crore resulting in a growth of 90%.

“We must highlight that these high growth rates are projected for print, outdoor, and radio because of high de-growth rates for these media in 2020. It would be more realistic to view growth rates in 2021 against the normal year 2019, and this shows up that digital will grow the most over these two years by 37%, followed by TV at 4%,” Pitch Madison said.

Cinema will de-grow over these two years by as much as 55%, radio by 23%, and print by 20%. Another way to look at it is by focussing on the Rs. 14,000 crore ad spend that will be added in 2021. Of this, around Rs. 4,000 crore each will benefit digital, TV, and print – almost equally.

A sharp recovery in print Adex to the 2015 level

Pitch Madison expects print Adex to grow by 35%, which will take it to Rs. 16,100 crore, a number that will still be 20% less than 2019. “Contrary to many projections, we believe that print will recover substantially in 2021. However, it will not recover all its losses of 2020 and settle at an Adex number that it had achieved in 2015.”

Print’s market share is expected to go up to 24% from 22% in 2020. From a category perspective, print-friendly sectors such as auto, BFSI, real estate, and education expect to do better with low loan rates and a positive economic outlook. And state elections could help push the Adex number to Pitch Madison’s estimated growth of 35%.

A wretched 2020

Pitch Madison estimates that in 2020 total Adex has declined by 20% and traditional Adex by as much as 29%. “It does appear that Covid-19’s negative impact on Indian Adex has been severe, compared to many other countries of the world including the US, by far the largest Adex market,” it said. WARC estimates that the global Adex has fallen by just 9%, from US$ 491 billion to US$ 447 billion in 2020, with the US Adex dropping by 4% and UK Adex by 14%.

In absolute terms, Adex has declined from Rs 67,603 crore to Rs 54,151 crore, a drop of a whopping Rs 13,452 crore, the highest ever drop in one year in the history of the Indian Adex. The last time Indian Adex saw any negative growth was way back in 2009 when on account of the Lehman financial crisis, the Indian Adex delined by 9%. At Rs 54,151 crore, the Adex today has gone back to the level it had achieved in 2017, and if you look at only traditional Adex, it has gone back to the level that we achieved five years ago in 2015.

The only medium to grow has been digital, though it achieved a modest growth of under 10% compared to 32% last year and a compound annual growth rate in the previous ten years of almost 30%. Amongst traditional media, the least affected was TV, which de-grew by just 11% or in absolute terms just Rs 2,783 crore. The medium worst hit was print which de-grew in absolute terms by Rs 8,120 crore and in percentage terms by 40.5%. Outdoor was another severely affected medium and de-grew by Rs 2,203 crore which translates to a percentage drop of 63%. Radio de-grew by Rs 990 crore or, in percentage terms, 43.8%. Cinema was virtually wiped out of the Adex map with an 82.6% drop.

Bloodbath in print – drops to number 3 in Adex share

The print Adex, the second largest in terms of market share in 2019, has been the biggest casualty in the Covid-19 year. Of the total Rs. 13,450 crore that Adex lost in 2020, Rs 8,120 crore was contributed by print. In 2020, print lost as much as 40.5% of its Adex. It conceded the number 2 slot to digital – coming in at the number 3 position with an Adex of Rs. 11,925 crore. Print’s share of Adex now stands at 22%. It conceded the number one position it maintained for decades to TV way back in 2009.

Print’s ad revenue in 2020 declined in all four quarters, including Q1 when it fell by 17% because of a slowing economy. In terms of volumes, each of the four quarters has delivered lower ad volume than the previous year.

“While our print barons did not lag behind in offering attractive rates to shore up volumes, advertisers did not return in adequate numbers, fearing that circulation had not returned to pre-Covid-19 levels. In the absence of ABC figures, which have been suspended, we will never know the real story on circulation numbers,” Pitch Madison said.

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2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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