FMCG, gaming, edtech, fintech remain top spenders in the first half of 2022

Four industry experts analyse the ad spends for the year so far.

After spending two summers under COVID-induced lockdowns, this year’s summer seems like the closest to pre-pandemic normalcy. People have started travelling again. The recently concluded Indian Premier League (IPL) started on schedule. All this led to a rise in advertising spends.

The summer season is like a festival for many categories - travel, entertainment, airlines, beverages, consumer durables, etc. But the monsoon will bring a lull in ad spends, which will continue until the Dussehra-Diwali festive season. An added boost for ad spends is expected from Gujarat and Himachal Pradesh state elections this year.

Jai Lala, CEO, Zenith India says that the overall ad spends in the first five months of this year are close to being back to pre-pandemic levels. “TV has bounced back. Digital continues to grow. Though it is not back to its pre-pandemic levels, print has also made a comeback. Not related to the pandemic, but spends are moving away from print,” he adds.

As per Lala, there are three categories that are contributing to this. The FMCG segment has maintained the threshold levels during this period. Other upcoming categories include app-based clients, fintech, edtech, gaming, etc. These have received a lot of funding that translates into ad spends and campaigns. The third is the comeback or revival categories - auto, travel, etc. These three together have brought the adex back to pre-pandemic levels, says Lala.

According to a recent TAM report, FMCG players ruled among the top 10 advertisers, with Hindustan Unilever (HUL) leading the list. In terms of growth, e-commerce-gaming category witnessed the highest growth in the January to March 2022.

Mansi Datta, chief client officer and office head – North & East, Wavemaker India also agrees that FMCG category continues to be the top spender.

Datta says, “Categories like corporate brand image, e-commerce, telecom products and education are seeing good growth, as compared to last year. The top IPL sponsors this year show the exponential rise of the e-commerce sector. The legacy brands were overtaken and the official IPL sponsors list featured only new-age brands, like Dream11, Unacademy, Cred, Upstox, RuPay and Swiggy Instamart. On TV too, new-age brands dominating the IPL sponsors’ list.”

It is also interesting to note that while the advertising industry stood at ₹70,715 crore in 2021, IPL 2022 alone has accounted for ₹4000 crore ad sales.

According to DCMN’s country head, India, Bindu Balakrishnan, the category that always does well is e-commerce. The reason for this, she says is accessibility to regional areas and for people who can’t shop as easily in stores. They will continue to purchase online, even as retail stores reopen.

“On the flip side, we have seen spends come down quite a bit in categories such as fintech because of volatile market conditions and factors like the crypto crash. Another category that has taken a hit more recently, is food-tech, as people are eating out more and food delivery, in particular, is less in demand,” mentions Balakrishnan.

The upswing that digital-first businesses witnessed is also attributed to the core changes in consumer behaviour and higher adoption of digital-first brands across the country, not just in urban and semi-urban areas, but also at Tier-II and III levels.

Sowmya Iyer, founder & CEO, DViO Digital states that many brands started to follow the Bharat first approach and, hence, accelerated their ad spends in the process.

“This was supported by the IPL, which provides a high-visibility opportunity for brands to connect with their audiences. Digital has done pretty well, post-pandemic, and ad spends have also bounced back over the last 3-4 months,” adds Iyer.

Balakrishnan also states that during the pandemic, when people were at home, budgets were heavily focused on TV and digital. “Now, digital continues to be an important part of the media mix. But in terms of traditional media, radio, out-of-home and print are also becoming more relevant. As people are commuting and socialising, these mediums are experiencing a comeback.”

Meanwhile, India’s growth forecast looks promising this year. According to Zenith’s latest Advertising Expenditure Forecasts, driven by election advertising and the resumption of festivals, which were cancelled at the height of the pandemic, the country will be the fastest-growing ad market, expanding by 20.8%. Though India is the 12th-largest ad market, it is expected to account for 4.6% of the growth in global ad spends this year.

According to GroupM’s This Year, Next Year Global 2022 Mid-Year Ad Forecast, India will become the seventh-largest ad market in the world by 2025, overtaking Canada, Australia and Brazil. It is expected to grow at 22.1%, “as underlying growth there (in India) remains strong.”

The spends mix is fast changing and the movement has got accelerated with COVID. As per Datta, there is a move towards digital with TV and digital spends being neck to neck at 45% each. “Online video and connected TVs are fast-growing and advertisers are realising the importance of this shift in viewing behaviour away from TV and onto these platforms,” adds Datta.

Brands attribute about 40% of their marketing budgets towards festive season marketing each year which kick starts with Raksha Bandhan and goes on till the end of the year. The festive season will look good, as it always has for India, but the global economy seems to be a little duller right now, believe experts.