With the rise of connected TV, and digital platforms competing with TV channels for cricket viewership, and generative AI assisting communication planning and becoming a part of regular life, Mohit Joshi, CEO of Havas Media Network India, is optimistic about increased spending on advertising in the second half of 2023, expecting “two-digit” growth.
Also, with Hotstar to stream the ICC Men’s Cricket World Cup 2023 (October-November) and the Asia Cup (August-September) free for the first time, the platform will become a gateway for small brands that may not have the budgets to afford cricket. Hotstar has introduced geo-targeting at the state/market level, making it even more lucrative for strong regional brands to advertise during the World Cup cricket despite limited budgets. This will serve as a new testing ground for small brands.
Election programming and advertising properties in the lead-up to the general elections scheduled in May 2024 will start gaining momentum. This will be an opportunity for new channels to eye additional ad spending. Political parties will spend lavishly across platforms and this will spur growth, especially in news content.
The trend of spending on conversational media platforms around cricket, leveraging super personalisation and real-time interaction will only accelerate.
Alliance Advertising experimented with this for a couple of brands during the Indian Premier League this year and the response was encouraging, according to V Narayanan, chief executive officer at Alliance Advertising & Marketing.
Ad forecast for H2
Narayanan said ad buoyancy was low in the first half of 2023 due to the surge in input prices coupled with disturbed weather patterns this summer. However, the second half looks more promising, with GDP growth estimates improving to 6.3 percent overall, especially in the October-December quarter, when it is expected to grow 8.1 percent. Overall, ad expenditure is expected to increase by at least 20 percent in the second half of 2023.
As inflation pressures ease and input costs stabilise, many launches that were delayed are expected to take place in H2. The forecast of a normal monsoon is also expected to boost advertising spends.
Amol Dighe, CEO of investments & business development at Madison Media, acknowledged that the World Cup will drive growth in H2.
“This H2, we have the Asia Cup and the 50-over World Cup, which will give a significant boost to spending. The World Cup is happening in India and will cover Indian prime time. More importantly, the World Cup is happening right in the middle of the festive season, which will be an opportunity for brands to capitalise on,” Dighe said.
Events such as the World Cup boost the entire media ecosystem. Print, OOH and digital also benefit as companies seek to leverage cricket and build their brands. Dighe said companies can leverage the India-Pakistan games and marquee shows such as KBC and Big Boss.
Alliance Advertising said the momentum started to pick up in July and will likely scale up during the festive season. Apart from the World Cup ODI cricket hosted in India, there are state elections in January and the build-up towards the general elections, which starts 5-6 months before.
Categories that will drive and reduce growth
As per Joshi, auto is one sector that has been quite active this year with many launches, and there will be a spike in consumer goods during the festive season. H2 ad spends are consistently driven by FMCG, travel & tourism, durables, mobiles/telecom, retail, ecommerce, cement, and wires & cables.
“New categories like electric mobility will turn out to be a big segment of advertisers. We could also expect a major shift in B2B brands to access consumers directly… and with e-commerce platforms helping them scale faster, these are green shoots for the industry and we do see this sprouting out,” Narayanan said.
Dighe said banking, electronics and appliances, and e-commerce are expected to drive ad spending growth as they look to increase sales volumes in H2.
However, the CEO of an agency said on condition of anonymity that they predict a very tough H2 for advertising because of the funding winter for startups and a freak summer. Even though big events are lined up, there is some caution this year.
“We could plausibly expect lower spending from the new-age startup brands due to the substantial drop in startup funding in 2023,” Narayanan said.
Dighe agreed, saying that online gaming, which faces higher GST, will be under stress to spend. Joshi alluded to the pressure on funding and the focus on profitability and cited them as reasons for new-age clients, edtech, fintech, gaming and crypto companies not to be as active as they were a year earlier.
With budgets being ploughed to digital, third-party ad tracking will be imperative given the increase in programmatic buying. Alliance has already noticed that 63 percent of ad impressions were driven through programmatic buying, as per the latest TAM JFM’23 report, and this trend will accelerate.