#RoadTo2021 Experts estimate digital AdEx to grow by 20% in the milieu of changing consumer behavior

Marketing blueprints for the quarter have been charted out and so is the investment flow. We speak to experts to calibrate the ad spends growth for 2021.

The data on statista.com suggests that the revenue generated by digital advertising across India was valued at around INR 199 billion in the financial year 2020 and the total advertising revenue was over INR 700 billion Indian rupees. GroupM’s TYNY 2020 forecast estimated growth of 10.7% in India’s advertising investment. How much are these progressions in line with the on-ground happenings? With the pandemic's impact still looming over, we take a look at the ad spends 2021 projections with the help of a few experts.

Ad spends 2021

Anand Bhadkamkar, CEO India, dentsu anticipates that there would be a double-digit growth over 2020- around 10-12% in the overall ad spends. However, according to him, getting back to pre-COVID levels is going to take some time.

“Digital should be growing around 20% or above – lower than what we anticipated earlier for 30%,” he adds.

With production and printing at a halt, traditional mediums like television, print, and OOH took a hit during the peak of the pandemic induced lockdown. Gradually the television industry got back on track and slow progress was witnessed on other mediums too. Amidst the chaos, digital served as the savior where every brand hopped onto social media platforms to cater to their respective target audience with significant investment in it by the marketers.

The trend continues to be seen this year too where experts are of the view that digital will occupy a larger share in the advertiser's media mix owing to its massive reach and ease of accessibility. Digital ad spends should touch INR 25,000 crore or approximately 3.5 billion USD in India in 2021, projects Sahil Shah, Executive Vice President - Operations & Media, WATConsult.

On the other hand, Amyn Ghadiali, Vice President- Business & Strategy, Gozoop notes that at a macro level, we can expect an increase of 20-25%  from the year before as many international events & tournaments are planned in 2021-22. He says, “Plus, we are expecting the entertainment industry, i.e movies in specific, to restore the old cinema format. All of it will add significantly to ad spends.”  

According to his understanding, digital-first businesses will increase their ad spends by at least 40-50% because they would want to sustain and grow the momentum.

Marketers are being cautious about spending and are looking at the RoI metric more closely. “Since Digital adoption has accelerated in the past few months we are seeing a significant increase in spends on digital. We expect a 15% - 20% increase in spends on digital in 2021,” adds Preetham Venkky, President,  22feet Tribal Worldwide.

As per Gartner’s Annual CMO Spend Survey Research 2020, while the majority of CMOs believe the post-COVID-19 economic curve will be V-shaped, with a staggering 95% consensus on a positive outcome, expecting a return to business-as-usual in the next 18 to 24 months only.

Pawan Kumar, Chief Data Officer at Ethinos Digital Marketing says, “While India is expected to follow the global trend, in the digital Ad spending /Digital Advertising context, the market reached INR 148,736m in 2020 and expected to grow between 2.4 to 3.9% in the coming year 2021.”

Mediums to Look Forward to 2021

The success of marketing communication has always been on the back of integrated plans. Since media channels, especially on digital have to be seen as an ecosystem, the efficiency of the downstream media channel (consideration & conversion) would depend on the effectiveness of an upstream media channel (awareness).

“So singling one media channel as the most efficient would not be a fair way to assess a channel. But if one were to be forced to choose one, then focus on nurturing prospects and customers using Email, SMS, Notifications and Custom Audience Targeting on Digital – these will always prove to be the most efficient,” opines Venkky.

It is expected that the traditional media budgets would be lower for most impacted businesses and lower allocations from the media strategists as most planners would consider performance and outcomes into account in their planning. Kumar explains, “However the decline in traditional media is not expected to be very significant – in percentage terms. While most of the digital media and advertising are expected to see some radical shifts in their approach to digital media and digital marketing practices.”

Meanwhile, Bhadkamkar informs that digital has taken over print as the number two medium while TV still continues to rule. Cinema and outdoor were massively impacted last year- so they will take time to recover.

According to Shah, the medium of preference depends on the right usage against the set objectives. For example, top of the funnel Facebook, YouTube, Programmatic & OTTs still hold a significant piece of the pie while the middle & bottom-funnel AZ, FK besides Google search, have really picked steam and will continue to become stronger.

Overall, any media vehicle which gives an expected return, especially from an ROI perspective, will be preferred by brands as CMOs/CEOs/CFOs are not looking at digital just as a way to advertise, but as a space to generate sales. “The ones who are looking at a way to advertise will soon start questioning how they can generate RoI from it, making it a double-edged sword for media channels and platforms,” notes Ghadiali.

Also Read: #RoadTo2021: A&M Professionals share a Must-Read Books list for 2021

The Big Spenders

Unanimously, the experts estimate that the ones that will contribute to the high volumes of ad spends in 2021 will continue to be FMCG, Consumer durables, app first businesses, and Consumer Pharma in the top spots, followed by Gaming, Auto, OTT & Entertainment, and BFSI sectors.

Digital-first businesses (including e-commerce) have seen the highest growth in terms of spends. Also, small businesses, start-ups, and new-age brands delivering directly to the consumer will maximise the power of digital.

“2021 is a year of recovery.  All categories except travel and hospitality will see a recovery in marketing activities,” shares Mohit Joshi, CEO, Havas Media Group India.

Innovations & Trends

“The largest innovations we’ll see will be in Phygital. People yearn to go back to their third place (not work home) experience, Along with the depth of experience, safety would be of paramount importance,” quips Venkky.

He further informs that data and technology play a significant role in making retail spaces more safe, convenient, and richer in inexperience.

We’ll also see a significant movement in MR (mixed reality) but more specifically Augmented Reality and Mobile will cement themselves as our window into the real world.

The year 2021 might have fresh KRA’s and KPI’s for CMO’s and for most of them, the priority is expected to be “Retaining Customers” or to arrest the slide of eroding customer base of businesses rather than “Generate Demand” as was prevalent in the pre covid -19 world.

Kumar asserts, “This approach should help most advertisers to focus more on the Brand building while using mediums that are personalized and not expansive or expensive. This would pretty much mean the end of long term media deals and the emergence of outcome-based media planning.”

During the pandemic, we saw many brands communicating in the ‘purposeful’ domain. In Joshi’s view, this is a key trend that will continue.  

WFH will be part of many people’s lives way forward as well and similarly, as a way people interact and consume online. “Creating a personalized experience, more impactful and outcome-oriented communication, messaging and further adoption of e-commerce capabilities, working with clients on their digital transformation journey, delivering relevant content for clients with a faster turnaround are the elements to look forward in 2021,” thinks Bhadkamkar.

Many industries may get disrupted in the next 5 years, especially Entertainment, Retail, and Fashion. Ghadiali strongly believes that data science is the future for agencies and marketers. “So far, the world was always left-brained or right-brained, but the new age of marketing will be integrated, and it will be impossible for you to succeed if you can't marry data & creativity,” he adds.

According to Shah, it will be very interesting to see where the efforts on hyper-localisation marketing, online-offline (TTF) measurement modelling, voice-enabled advertising and programmatic commerce reach in a post COVID world, wherein consumers will be out and about but have very different behaviours across.

Moreover, regardless of COVID-19, the multilingual trend of content consumption in advertising is going to be a big one in 2021.

Expert Tips for Marketers

Refresh and Reboot is what Joshi advises the marketers to imply in the current year taking key learnings from the past.

‘Refresh’ your understanding of your Consumer as a lot has changed in their lives and ‘Reboot’ your communication and make it more relevant and meaningful.

“Purposefulness or Meaningfulness has gained even more prominence during these times. Clients need to ensure they use meaningful media to make their brands more relevant to their consumers,” he adds.

As a digital marketer, Ghadiali mentions that they need to understand the business of brand building horizontally as well as vertically. He cautions, “If you're thinking only post, ad type, keyword, and so on - you'll never be able to see the bigger picture.”

Also, beyond the 4Cs, add two extra Cs to your strategic planning. Focus on Channels (omni-presence) and Continuum (consumer journeys), according to Venkky.  Context will play the most important role in driving effectiveness and action.

“Empathy and personal connects are the two factors to be considered,” concludes Bhadkamkar.