AdEx Trends in FY 2023-24 and Future Prospects

In the fiscal year 2023-24, Pakistan’s journey began with a boycott of international brands, fueled by the Israeli-Palestinian conflict, which led to a significant drop in their sales in the initial months. However, as the boycott began to wane, sales began to return to pre-boycott levels. Nevertheless, the volatile political environment cast a shadow over investor and consumer confidence. Yet, despite these obstacles, the media industry managed to maintain an optimistic outlook. In fact, ad spending skyrocketed, surpassing last year’s figures and reinforcing the industry’s resilience. In FY 2022-23, the total expenditure reached Rs 88.4 billion, compared to Rs 98.1 billion in FY 2023-24. While digital spending experienced a slight decline, all other media continued to thrive.

1. Television

With a strong 18% increase in spend, TV has emerged as a major catalyst for advertising growth this year. ICC was a key driver of high-profile sports events like World Cup 2023, PSL 2024, T20 World Cup 2024 and Asia Cup 2023. Also, new content e.g Shark Tank Pakistan And The final preludeamong others, rekindled audience interest in TV. The top-spending categories included beverages, personal products, soaps and detergents, all of which increased their ad budgets. As a result, TV advertising grew significantly, making it more than double the size of the next largest category: digital.

2. Digital

While maintaining its position as the second largest medium in Pakistan, digital faced its own challenges. Its power lies in its ability to micro-target consumers. However, it struggled in the tough economic conditions, which led to payment restrictions on various platforms. Big players like YouTube saw a drop in subscriptions, which fell from 72 million to 55.9 million, mainly due to inactive accounts and the removal of bots. Nevertheless, with Google accounting for nearly 70% of the market and platforms like Meta and TikTok filling the remaining gap, digital advertising is poised for a dominant future.

3. Out of Home (OOH)

OOH, which had been somewhat stagnant in recent years, enjoyed a significant revival this financial year. Although it has not fully returned to pre-Covid highs, signs of a steady recovery are promising. A major driver of this revival is digital out-of-home (DOOH) advertising, which has created momentum in this sector. Additionally, OOH offers a unique advantage by synergizing with other media for cohesive, multi-channel campaigns.

4. Print

There has been a modest recovery after navigating a difficult fiscal year. Print has reclaimed a small fraction of its former importance due to increased expenditure due to elections and promotional materials of various political parties. Although this improvement is not sufficient for full recovery, it represents a positive change in the right direction. A sharp decline in advertisers last year took a toll on spending, and Medium is still trying to overcome those challenges.

5. Radio

It’s been steady over the past few years, with a handful of advertisers keeping their spending steady. However, there is optimism for sustenance in the sector, as overall spending is showing signs of growth. This gradual growth suggests that despite its small stature, radio has a presence in far-flung markets, capturing opportunities and audiences.

6. Podcast

Although still not as mainstream as other media, podcast advertising has gained momentum in recent years. With an ever-growing audience base, the sector is poised to expand across Pakistan, providing new opportunities for brands to connect with audiences in a more personal and engaging way.

7. Over the Top (OTT) Platforms

These platforms have grown in popularity, with popular players such as Tapmad, ARY Zap and Tamasha consolidating their presence. This year also saw a surge in popularity for Myco, with new entrants like Begin, who have experienced remarkable growth in their user base. This growing interest in OTT platforms indicates a dynamic and evolving landscape for digital content consumption in Pakistan.

Future Prospects:

• Development of local OTT platforms

The emergence of apps like Myco, Begin.watch and Urduflix marks an interesting trend, suggesting that more local OTT platforms will follow suit. The growth potential here is huge, paving the way for innovative content tailored to local audiences.

• Growth in e-commerce

• With the market size of the current e-commerce sector increasing by three per cent in the third quarter of FY 2023-24 and the entry of Timo in the market, the segment is on the verge of significant growth. The prospects are bright, indicating a strong momentum for online shopping in the region.

Changing demographics

Gen Z and Gen Alpha are stepping into the limelight, followed by Millennials. Brands must adapt to the unique preferences of these young segments and make significant changes in their marketing strategies to match their tastes.

• AI

OpenAI has encouraged players like Google, Meta and X to dive into the AI ​​pool. This increase in competition points to a future where AI will play an integral role in the industry, forcing companies to strategically navigate its influence.

• Data and Analytics

Data and analytics are poised to become the foundation of decision-making processes within the industry. As new tools that leverage AI are developed, data becomes increasingly important, guiding strategic choices. As we look ahead, it is clear that Pakistan’s media landscape is buzzing with potential and poised for change. Although challenges remain, the resilience of the industry promises an exciting journey ahead. With emerging technologies, changing demographics and a dynamic combination of traditional and digital platforms, this phase is poised for a thrilling evolution.

Abid Hussain is Manager, Data & Analytics, Starcom Pakistan. abid.hussain@starcompakistan.com