2024 tough year for ad industry but the worst is behind us: EssenceMediacom's Navin Khemka

“We began 2024 with ambitious targets, but macroeconomic factors like reduced disposable incomes forced us to revise our outlook," said Khemka. The rural market, a traditional growth engine, experienced a downturn for most of the year. “Demand picked up slightly in the last quarter, but it wasn’t enough to offset earlier sluggishness. Inflation and uneven monsoon rains worsened the situation," he added.

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Urban markets, meanwhile, saw a slowdown in discretionary spending on two-wheelers and budget cars, creating a challenging environment for marketers. At the same time, premiumization emerged as a key trend, reflecting a stark economic divide. “The rich are getting richer, driving demand for luxury real estate and high-end products," Khemka said.

Premiumisation vs mass consumption

While the upper end of the market thrived, Khemka stressed the importance of inclusive growth. “Wealth concentration in a few hands cannot drive the broader economy. Entry-level car and two-wheeler sales depend on increasing disposable incomes for the masses," he said.

Startups, an essential part of the advertising ecosystem, tightened their marketing budgets in response to economic uncertainties. “However, we also saw strong brand emergence from startups that successfully raised funds and listed in the market, signalling investor confidence in India’s future," Khemka said.

Reasons for optimism in 2025

Despite 2024’s challenges, Khemka is optimistic about the year ahead, citing resilience in key sectors and evolving consumer trends. “The worst is behind us. Startups, particularly in gaming, are readying significant campaigns after adjusting to regulatory changes. FMCG growth remains steady, and we expect a revival in consumer durable purchases as the post-covid replacement cycle kicks in," he explained.

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He expects a double-digit growth for 2025, aiming for over 10-12%. “The industry is gearing up for new product launches, geographical expansions, and strong investments from technology companies," Khemka said.

Technology and media trends

AI is emerging as a game-changer for the advertising sector. “AI is driving operational efficiencies and enabling innovations like dynamic creative optimisation (DCO), which delivers tailored ads based on consumer behavior in real time," Khemka said. He highlighted a recent Saridon campaign where AI customised ads to reflect specific consumer triggers, such as stress or headaches, resulting in significant engagement.

Traditional media is also showing signs of resilience. “Print is making a comeback, especially in high-value categories like consumer durables and automobiles, where it continues to deliver strong results," Khemka observed. Television is expected to grow 7-8%, driven by investments in regional content and industry consolidation.

Out-of-home (OOH) advertising is poised for growth as well, fuelled by the expansion of modern digital signage and metro networks. “OOH offers highly localised and segmented audiences, which is a big advantage in a fragmented media environment," Khemka added.

Strategic advice for marketers

Khemka emphasised the need for marketers to adopt a forward-looking approach. “Continuous investment in research, experimentation, and accountability will be critical. Understanding consumers better and aligning strategies from day one can drive measurable success," he advised.

While India's lack of recent large-scale data surveys, such as the census and IRS, poses challenges, Khemka suggested that brands could leverage digital insights and smaller targeted studies. “The wealth of data available in the digital ecosystem offers a strong foundation for brands to make informed, adaptive decisions," he noted.

A transformative year ahead

Looking ahead, Khemka is confident about the industry’s ability to adapt and grow. “Startups are regaining momentum, tech companies are set to launch groundbreaking products, and FMCG brands are showing resilience. These factors, combined with a revival in consumer durable purchases, position the industry for a strong 2025," he said.

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Khemka sees AI-driven personalization, traditional media’s resurgence, and the rise of premiumisation as defining trends. “With the right strategies, 2025 can usher in a new era of growth and innovation for the advertising sector," he said.