Events, hotels, travel-tourism segments likely to revive significantly, experts predict.
Indians tend to save money throughout the year and then spend most, if not all, during the holiday season. The season is therefore known as the savior of the Indian economy. Despite concerns about the third wave of COVID, experts observed positive consumer sentiment and, as a result, an increase in overall advertising spend on media channels.
With the economy now showing signs of recovery, digital, print and TV advertising revenues have also rebounded, after declining nearly 20% in 2020. A recent report by Dentsu International reveals that ad spend is expected to increase by 10%. , 8% in 2021., to reach 9 billion dollars.
The holiday season kicks off with Onam and Raksha Bandhan, and advertisers have already launched several promotional campaigns. Brands across all categories like Kalyan Jewelers, Amazon India, Cadbury Celebrations, Vivo, Tanishq, among others, have launched festive campaigns to tap into positive consumer sentiment.
Brands also plan to make the most of this period, as the COVID situation is currently under control and consumers are now ready to indulge the expense. Experts predict the season is likely to boost demand, leading to a collective jump of around 50-60% in festive ad spend this year.
Due to the change in consumption habits caused by the pandemic, a large part of advertising spending has gone digital. E-commerce is one of the main drivers of digital ad spend. A number of direct-to-consumer brands have emerged and several traditional brands have also taken the D2C route.
Some categories that will see increased demand include automobiles, appliances, jewelry, and consumer durables. Industries, such as hospitality, events, travel and tourism, are also likely to experience a significant recovery.
afaq! contacted four experts to find out what products will be in demand this holiday season, ad spend and which media segments will see an increase.
Himanka Das, strategic consultant – business analytics & digital transformation (ex-CEO, Vizeum Dentsu International)
As the second quarter (Q2) draws to a close, the good news is that business houses have started reporting results that are already at pre-COVID levels, if not ahead. The health and well-being of every family will continue to be a priority, which means that digital commercial transaction (e-commerce) formats will continue to grow at an exponential rate.
With the vaccination campaign and infection rates controlled, the industries most affected, such as retail, hospitality and travel and tourism, are expected to experience a significant recovery.
We live in a rapidly changing digital age. Data-driven organizations are 25 times more likely to acquire customers than their peers. Therefore, marketers develop a culture of data-driven decision making.
It stands to reason that internet connectivity and bandwidth lead to disproportionate digital consumption patterns, as well as linear media formats. However, at the same time, digital formats are fragmented. This, along with the lack of a unified measurement mechanism, are the main challenges that keep us busy creating ROI frameworks to drive efficiency and effectiveness across multiple digital assets / communication channels.
Manas Gulati, Co-Founder and CEO, ARM Worldwide
The categories that are sure to see a boom during the holiday season will be consumer durables, clothing, jewelry, home and auto accessories. For this reason, finance, as a category, will also benefit from a boost. With the markets on the rise, the inhabitants of subways, Tier I and II cities, which now have slightly higher disposable income than in the pre-pandemic era, will embark on many revenge purchases.
The season will attract around 45-50% of overall ad spend throughout the year. Online giveaways will be at the center of (sales) platforms, like Amazon and Flipkart. Many local brands have inflated their online platforms and will now aim for a great season thanks to online sales.
Digital will account for almost 40-45% of overall ad spend during the season. While the overall index is expected to rise by 26 percent, nearly 50 percent will be attributed to the coming months of September, October and November.
Digital advertising will play an important role, followed by an increase in all mediums, including TV, radio and newspapers, in that order. Until 2020, digital spend represented 31% of the overall index. It is expected to increase to 40 percent, representing the lion’s share of spending. That being said, TV will still hold a significant share of adex, while having restrictive growth due to the growth of digital.
Yesudas S, co-founder, Y&A Transformation Collective (ex-MD, Vizeum India)
The determining factor of the impact on different consumer products and services is supply and demand. The supply (of goods and services) is fully armed. Demand, much of which (almost half) also includes services, will increase sharply once the vaccination threshold is reached.
The good news is that it is gaining momentum. With the vaccination efforts in full swing and the significant reduction in death rates, India, in one form or another, will open up and remain open. There is a general improvement in consumer confidence. This is very evident in markets open to business. I see FMCG dominating the ad space, with e-commerce, automotive, home appliances, jewelry, computers, smartphones, etc. Once the doubly vaccinated population reaches critical mass, a big boost to various services, including travel and tourism, could be considered.
Before the start of this year, overall ad spend will show marginal improvement from pre-COVID levels. I see the re-emergence of print and television losing focus. Events will come back in force once the vaccination threshold is reached.
Shripad Kulkarni, marcom advisor for challenger brands and trainer in advertising sales
I don’t see a big increase in ad spend this fiscal year. This year will be a copy and paste of last year. Digital will develop at the same rate. The traditional media will decline at the same rate. Digital verticals and horizontals, edutech, BFSI and health and wellness will do well.
A slight increase in the auto, due to some launches, is about the only change. However, lest we take it lightly, this is a big turning point in A&M history in India.
Next year will be a whole new world. We will see tremendous growth. But it will be in the new digital medium. Many brands will have many opportunities to seize, some will face new challenges in the next financial year. And, some will even reach a precipice.