Traditional advertising spends lags in Q2 as spenders turn tight fisted

However, festive season spurs demand as advertisers are back

A slowdown in the consumption economy has cast a shadow over traditional advertising revenue of media companies during the second quarter of financial year 2025 (Q2FY25), even as revenue from digital advertising continued to grow. But thanks to the ongoing festival season and upcoming state elections, firms are looking to turn the corner very soon.

 

Traditional ads consist of TV, radio, print and outdoor mediums. This revenue dip can be attributed to cautious ad spending by firms beset by weak market sentiment and rising consumer prices.

 

Zee Entertainment Enterprises (ZEEL) reported a 9 per cent decline on a year-on-year (Y-o-Y) basis in domestic ad revenue for Q2FY25, the firm said on its conference call with analysts.

 

“We have seen some pickup from the month of September with the onset of the festive season,” said Punit Goenka, chief executive officer (CEO) and managing director, ZEEL in the company’s earnings call.

 

“Hence, we remain optimistic about the upcoming festive quarter leading to an uptick in advertising revenues,” he said.

 

Abheek Biswas, head of knowledge and consumer research, Dentsu India, said in an email response that the festival season and assembly elections will be the primary drivers for the growth of ad budgets. 

 

The advertisement industry expects an uptick in the second half of FY25. This will be led by the impact buys on reality shows and sports on TV/OTT (Over-the-top platform), along with large format ads on print medium. E-commerce, automobile, BFSI (banking, financial services and insurance), FMCG (fast-moving consumer goods), and retail will drive the Adex (advertising expenditure) for H2 this year.

 

The overall advertising industry in India is expected to grow at 9 per cent over the year 2023. By the end of 2024, digital media will contribute 50 per cent to the Indian ad industry, growing at 25 per cent over last year, said Biswas citing the latest Dentsu Digital report.

 

Like ZEEL, Shemaroo Entertainment, a content creator, aggregator, and distributor, reported a decline in traditional media revenue by almost 33 per cent to Rs 94.9 crore in Q2FY25.

 

“There has been sluggish demand for our broadcast advertising due to the continued slowdown in the consumption economy. These put pressure on our traditional revenue stream,” said Hiren Gada, CEO, Shemaroo Entertainment, in the company’s earnings call.  

 

The company said that the digital advertising revenue has witnessed continued growth across the industry in its investor presentation.

 

Similarly, Reliance Industries-backed Network18 Media and Investments reported that its news segment revenue grew by 6 per cent “primarily driven by growth in digital segment ad revenue across all platforms,” as per its investor presentation.

 

However, its TV advertising was weak during the quarter as industry advertising volumes for the news genre declined by approximately 20 per cent on a Y-o-Y basis for the quarter ended on September 30.

 

HT Media, a print and digital media company, reported a 3.27 per cent increase in overall advertising revenue to Rs 252 crore for the quarter ending September 30 compared with the same quarter last year.

 

The company saw growth on a Y-o-Y basis in ad revenue across key commercial categories except BFSI, industrial and tourism in the English-language print segment.

 

In the Hindi-language print segment, there was a marginal decline in ad revenue by 2 per cent to Rs 110 crore on a Y-o-Y basis in Q2FY25, as per the company’s investor presentation.

 

UFO Moviez, an in-cinema advertising platform, reported a drop in its ad income by 17 per cent to Rs 24.5 crore for the July-September compared with the same quarter last year. The ad revenue remained subdued due to the mixed performance of film releases during the quarter, the company said in a statement in its earnings release.

 

Biswas of Dentsu India said that digital media has been taking an increasingly larger chunk of ad spends, but traditional media remains sizeable in FMCG, BFSI, real estate, automobile, consumer durables, media and entertainment sectors. He further said that while the FMCG sector has driven ad spend growth historically, there has been notable ad spend growth in the travel and tourism, government and social, and real estate sectors.

   

For the next 1-2 year horizon, Dentsu India foresees programmatic and AI (artificial intelligence)-powered advertising, the emergence of retail media, the rise of connected TV (CTV), experiential and content branding, collaboration with influencers, voice and audio advertising, sustainability, and purpose-driven campaigns as major trends in the ad industry.    

Number game   

ZEEL:  9 per cent decline Y-o-Y in domestic ad revenue in Q2FY25. 

Network18 Media and Investments: Industry advertising volumes for the news genre declined by approximately 20 per cent Y-o-Y 

Shemaroo Entertainment: Traditional media revenue declined 33 per cent 

HT Media: 3.27 per cent increase in overall advertising revenue, but marginal decline of 2 per cent in Hindi-language print segment 

UFO Moviez: Ad income dropped by 17 per cent Y-o-Y