2023 AdEx slips just below Rs 1 lakh crore, lowest growth in 6 years: Reports
According to the Madison Report, India's 2023 AdEx growth has hit a six year low, except the COVID year.
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AdEx (advertising expenditure) in 2023 grew by just 10 percent, against forecasts of 16 percent. According to the Madison Advertising Report 2024 released on Thursday, AdEx closed just a little short of Rs. 1 lakh crore at Rs. 99,038 crore in the year gone by.
“ADEX continues to shock us year after year, either positively or negatively. Our GDP is projected to grow at 7.3 percent and reputed global economic Pundits and CEOs of management consultancies have been saying throughout the year that India is the country to be in or to watch out for. It has been our belief that there is somewhat of a loose relationship (though not statistically proven) between the rate of growth of GDP and the rate of growth of AdEX,” said the report.
‘In 2023 despite GDP having grown at 7.3 percent, AdEx seems to have grown at only 10 percent which is the lowest growth Indian AdEX has seen in the last 6 years, except the COVID year,” the report added.
Major reasons have contributed to the lower growth of ADEX according to the advertising report are-
1. Increased price of raw materials in the first half has forced some Advertisers to be cautious in their ad spending and some have stopped spending all together.
2. The continuing Russia-Ukraine war and the aggravation of the Israel-Hamas dispute have caused a fear of global recession making India Inc. cautious with their ad budgets.
3. Inflation and rising prices accompanied by only a marginal or no increase in income has brought considerable pressure on the vast lower middle-class population and has restricted their ability to spend on consumer goods.
4. Growth in spending by the well-heeled, leading to increased usage of large packs, premium products, hospitality and entertainment, travel, have not compensated for the drop in spend by the middle class.
5. The startup funding winter continued leading to many startups completely abandoning their advertising plans, including substantial reduction on spends in the performance marketing.ac
“Whilst the Outlook for Adex in India is extremely strong in the mid-term and long-term, in the short term we are witnessing a slowdown in momentum because of India Inc’s focus on quarterly profits. This does not augur well for sustained growth in profits for Advertisers who should be focussing on volume growth," said Sam Balsara, Chairman, Madison World.
