While a number of advertisers had already increased their spends in H1 of 2023, the second half of the year that brings in festivities along with cricket frenzy, is going to provide momentum to adex.
With Onam and Raksha Bandhan around the corner, India is ready to embrace the joy of celebration once again. It is time for consumers to loosen their purse strings. With consumer sentiment riding high, brands are poised to make heavy investments. This year’s festive season is projected to witness an advertising splurge, with experts forecasting an impressive surge in ad expenditure of about 15%.
Ashish Bhasin, founder, The Bhasin Consulting Group, stresses on the importance of the festive season in the advertising calendar. "If the festive season goes well usually the year goes well for advertising. Around 40-45% ad spends happen during that time of the year," he says.
Bhasin is expecting that the ad spends this festive season will be slightly above the average- around 10-12% more than last year. "A lot depends on the monsoon and so far the country has received sufficient rains. A good monsoon boosts rural demand because in many categories urban areas are near saturation levels and rural becomes an important driver for demand," he explains.
Amit Wadhwa, CEO, dentsu Creative India says that there will be a 10-15% increase in adspends from the first-half to the second-half of 2023. He says that last year’s festive season did not have any major cricket/sports tournaments. However he says that, “There will be a decent amount of jump in the second half this year. Ideally this year’s festive season is bound to be better than last year’s festive season because of the cricket world cup.”
Rahul Shah, managing partner, Motivator, says that there has been a good momentum from January, and corporate earnings have shown steady growth that will continue during the second half of the year. “The IMF and RBI have revised the GDP growth, which is upwards of 6% going up to 6.5%. This is a clear indicator of a strong second half.”
Continuous growth in digitisation, coupled with lower inflation, good rainfall in July and positive consumer sentiment, are all expected to drive growth during the festive period. Brands across categories are expected to launch new products.
“An extended festive period for almost 90 days, from Independence Day to Diwali (mid-November), coinciding with marquee sporting events and positive consumer sentiment, will lead to a surge during the festive period. Festival buying is prevalent in our country with numerous auspicious days,” Shah adds.
Brands across categories like food, apparels, home decor and travel, are gearing up to unleash their creative campaigns during this festive season. Shah shares that premium categories are resilient to inflation. With almost 30-35% of sales happening during this period, the key categories that will increase their spends include auto, consumer durables and electronics, mobile phones, real estate, jewellery, apparels, FMCG, chocolates and biscuits, beverages, e-commerce (Big Billion Days and Great Indian Festivals), and paints.
“Digital and TV will garner the maximum share of the budgets. With mobility returning to pre-pandemic levels, OOH will see significant growth during this period,” mentions Shah.
Bhasin says digital will be the fastest growing medium, followed by television, "particularly because of cricket. But when surge happens during festive seasons all mediums benefit."
Linu John, VP, Zenith India, says that brands are expected to spend beyond the traditional mediums of newspapers or TV, and experiment with social media. In the months of July and August, just before the festive season starts, advertising spends tend to slow down. John calls it a ‘planned break’.
“Brands are saving their energy and money for the upcoming festive celebrations. They are gathering their strength and resources so that they can make a strong impact when the right time comes.”
Mehernosh Pithawalla, SVP & head of brand & strategic insights, Godrej & Boyce, states that during this festive season, the company’s various business segments are strategically aligning their marketing expenditures to optimise consumer engagement and sales growth. For example, Godrej Security Solutions has marked a 20% surge in its spending, as compared to the previous year.
Speaking about its other brands, Pithawalla states, “For Godrej Appliances, the festive period that starts with Onam, transitions through Durga Puja, culminating in Diwali. Our focus during Onam centres on enhancing the shopper journey, covering both digital avenues and physical stores. Our investments in these touchpoints have been augmented by nearly 70%.”
“Godrej Interio experiences its highest festive expenditures annually and this year witnesses a 20% rise over the previous year’s outlay. These expenditures are distributed across diverse media, with digital media claiming over 65% of the allocation.”
Pawan Sarda, chief growth officer, The House of Abhinandan Lodha, shares that the real estate sector growth has been phenomenal and is only going to grow during the festive season. The overall retail growth shows that the purchasing power of customers is increasing, he adds.
“All the signs are looking positive, hence, advertising should do well. This festive season is going to be one of the biggest ones. From a category perspective, our focus will be on print, followed by digital and billboards. Of course, the festive season is an exciting one for us, because people believe that this is an auspicious time to invest in housing. So, we are all gung-ho about the festive season.”
Sports adex to be driven by cricket
The festive calendar will also see marquee sporting events like Asia Cup, India-Australia series, ICC ODI World Cup and Asian Games. Shah says that brands will surely seize this opportunity to reach out to, and engage with, this audience, leading to increase in ad spends. However, he believes that cricket will form the majority share.
“India is a cricketing nation, and with marquee events like Asia Cup, ICC ODI World Cup and more than three India-Pakistan matches during the peak festive season, it’s surely going to attract a lot of eyeballs. Disney+ Hotstar has made viewing free this year and will see unprecedented reach.”
This year, John mentions, brands have a unique opportunity to relate their stories to the World Cup, making their messages even more powerful. “Usually, cricket is the most popular advertising subject, but there are also other things that interest people. Memories of the past, family bonds, local festivals and inspiring stories all make people feel connected. Including these aspects in ads, help brands to connect with people’s feelings and also build stronger relationships with them.”
Apart from sports, it being a pre-election year, Bhasin expects around Rs 40,000- 45,000 crores of the annual adex to be spent during this period.
Speaking about Godrej & Boyce’ plans for the sports-heavy period, Pithawalla states, “Godrej Interio is contemplating to get involved in the World Cup. Godrej Appliances, while not engaging in the Asia Cup, is still in the process of finalising its participation in the World Cup. Godrej Security Solutions and Godrej Locking Solutions and Systems are diligently evaluating opportunities presented by both the World Cup and the Asia Cup.”
Traditional advertisers to drive adex
Most FMCG brands have already increased their ad spends in H1 of 2023. For example, Marico’s spends touched Rs 271 crore in June 2023 versus Rs 269 crore in June 2022. Similarly, Dabur’s spends went up from Rs 157 crore in June 2022 to Rs 204 crore in June 2023. This momentum can only be expected to grow in the second half of the year, given various favourable factors.
FMCG witnessed a growth of 12.2% in the June quarter, with rural showing a robust 4% growth. Shah is optimistic that FMCG’s growth momentum will continue in the festive season.
“Consumer sentiments are positive, and FMCG will witness growth of anywhere between 15% and 20%. The monsoon season has been good so far, which will be a key driver for rural demand. This year also has an extended festive season (from Independence Day to Diwali in November). With inflation in control, FMCG ads spends will continue the momentum, as many companies will want to capitalise on the positive sentiment and tap into consumer demand with new launches.”
Bhasin expects the growth of FMCG ad spends to continue during the festive season. "It is an evergreen category. And this 10-12% growth will be possible only when FMCG spends witness the same rate of growth."
However, the funding winter in the start-up sector and the GST in the gaming sector, are expected to have an impact, as these new-age brands contribute around 40% of the sporting spends.
“Start-up investments have been weak for more than a year, along with a correction in valuations. Further, the new GST rules will have a direct impact on revenues of the gaming sector. VC investments saw a rebound in July, indicating a slow and steady recovery in the start-up ecosystem, amid the prevailing funding winter,” Shah predicts.
“We can expect this to grow steadily in the second half of the year. However, the valuations will be under pressure and the focus will be on profitability. The start-up ecosystem will be cautious on spending and these would be significantly lower than the last 12-18 months.”