We reach out to a couple of agency heads to know their take on which areas of the ad industry will be the most/least affected by the Coronavirus.
With the death toll and the list of those infected with COVID-19 increasing with each passing day, India, among many other nations, is in a state of panic and confusion. Businesses are suffering unexpected losses. Markets, malls, schools and even most offices are empty.
A Google search will throw up a list of the most affected businesses. Companies have cut down their ad spends as they realise that their audience is now confined within the four walls of the house.
Speaking of the advertising world, its easy to surmise which areas of the agency business are most and least affected. Most branding activities, including conferences and events, have been postponed indefinitely. A majority of production work has been suspended, agencies are on lockdown and out-of-home (OOH) advertising has been halted.
We had a word with Anand Bhadkamkar, CEO, Dentsu Aegis Network India. He says all business irrespective of the category they fall in are getting affected by the spread of the virus. “When we speak of advertising, definitely overall spends are getting affected. What's being affected the most are the places where there is more personal contact, say events, seminars, activation activities and sports. Like, the IPL has now been postponed to April 15; we can only wait and see if it will be further pushed down the calendar. The first casualty definitely is over there because whatever was planned has either been postponed or is being reworked.”
He says that the postponement of events, like IPL, have an impact on the TVC or ad budgets around them. “That's something which is evolving for now, but the direct impact is surely on the on-ground activities,” he shares.
Bhadkamkar says given that people have started working from home and the schools are off, there will be a boost in the OTT content consumption. The user base is definitely increasing on the digital platform. Online sports companies and entertainment sources will benefit, too.
He summarizes that there are basically two spectrums – physical and digital. “Those who are in the physical one are seeing immediate impacts, while digital is in comparably better position at present and in fact is benefitting in some manner as well,” he signs off.
Sushant Vithaldas, head of solutions and VP - Schbang Bengaluru, opines that in the near term, one can expect an immediate direct impact on experiential, on-ground and radio spends. The spends will be reduced to account for social distancing measures, such as work from home and restriction on events of any sort.
“With people spending more time online, on their devices at home, it will account for higher digital media consumption for now. But, over the medium term, we will see media spends rationalised as brands strive to maintain a balance between consumer engagement and the need to invest in driving demand under economic uncertainty,” he says.
“Amidst this very uncertain period, we are seeing brands find new opportunities by taking a leap in innovative ways to reach to and engage with consumers. We’ve seen some of our more agile brands accelerate their investments in live-streaming to consumers at a never before scale. This is already setting new benchmarks for reach and scale... We expect to see a growing number of consumers spend more time online to research, discover and shop for retail and on-demand services. Brands will step up efforts in e-commerce marketing and search campaigns to influence these decisions,” Vithaldas adds.
He also says that the brands which will benefit the most are those which adapt, innovate and move to where the eyeballs are, faster than the others.
Kalyani Srivastava, executive vice president and head, Rediffusion Mumbai, thinks the one thing that is evident is there is no easy predictable impact of COVID-19.
"Everything is interconnected, and the impact on businesses and the economy will be understood gradually. We are being cautious, as are all our clients. The year, for us actually, has not been bad at all. We have had new client acquisitions, as well as organic growth. We have been successful in leveraging our group strengths, and building expertise in platform building and management services. And we see scope for growth in the area," she says.