Festive cheer boosts ad spends for regional channels

After two dreary festive seasons owing to the Covid19 pandemic, Indians have once again welcomed festivities with positivity and cheer this year. After the pandemic broke out in 2020, this is the first festive season free from all Covid19-related government restrictions. While the pent-up demand has made consumers more willing to open their purse strings, brands have also increased their ad spends this year.

Regional channels have also made the most of this festive season and some report that their revenues have reached the pre-Covid levels. Industry experts suggest that these channels would have raked in as much revenue as 2019 or at least 5-10% more than that.

"If we are to look at only the festive season, the ad spends are back to the pre-Covid levels or maybe even marginally higher. This could be due to some pent up demand," says Ashish Bhasin, co-founder and chairman, RD&X Network.

With festivities returning to the old normal, there is a positive sentiment among consumers. Traditionally, Indian consumers wait for festivals to make big purchases like automobiles, jewellery or consumer durables. It is also the time when brands bring out good discounts or attractive offers. Almost 40-45% of the annual ad spends in most categories are made during this time.

The festive season begins with Ganesh Chaturthi and continues until New Year's. During this time, several regions have relevant festivals like Kerala celebrates Onam, West Bengal celebrates Durga Puja and Bihar celebrates Chhath Puja. For the vernacular channels, it is their moment in the sun as not only brands from their particular region but also national brands reach out to them.

"Overall the ad spends have been good in the festive season so far. In the festive season brands want to quickly reach as many people as possible. Depending on the geographical spread of their target audience, the channels in that particular region become very important for them. The festive season tends to be fairly crowded as everyone is advertising at this time - national brands with certain geographical preferences and regional brands," he says.

Samrat Ghosh, cluster business head - Zee Bangla and Zee Bangla Cinema, says the advertiser's investments have gone up as compared to the last two years. Several categories that had reduced their spends during Durga Puja have resumed their spends.

"A lot of brands that would heavily advertise during Durga Puja have come back. For example, the paint category or the automobile industry," he says.

Amarpreet Singh Saini, chief channel officer, Zee Ganga and Zee Biskope, says brands are looking to tap the pent-up demand. For the Bhojpuri channels, Chhath Puja, which was on October 30, is a much-anticipated festival.

"Until last year people were not able to celebrate on the ghats. Now after two years people will be going out. So the entire enthusiasm and fervour is very different. Every advertiser is wanting to make the most of it and the response is overwhelming," he says.

Bikash Kundu, SVP and head, revenue (regional entertainment), says there is significant growth in comparison to the pre-covid levels. "We have witnessed massive growth in comparison to 2019 vs 2022. The inventory fills and spends have gone up by 30% & 27% respectively as compared to pre-Covid levels," he says.

A similar boost has been witnessed by vernacular print publications as well. Harrish Bhatia, president- sales and marketing, Dainik Bhaskar, says almost all the corporate and retail segments have recovered to the pre-pandemic levels.

Satyjit Sengupta, chief corporate sales and marketing officer, Dainik Bhaskar says, "We closed our festive billing on a new high. This season has been nothing short of spectacular. We are at a double digit growth over the pre-Covid festive season of 2019. Apart from some four-wheelers, where there still seems to be a shortage of supply, all other segments have shown a growth this season. All festive categories are up, Consumer Durables & Home Appliances, 2- Wheelers, Jewellery, Apparel & Lifestyle are showing impressive double digit growth. Jewellery advertising has in fact boomed and is showing almost 100% growth. This places us in a strong position to recover all the lost ground during the pandemic and return higher than the 2019 revenue."

However, Sandeep Gupta, COO, Broadcasting Business, Shemaroo Entertainment, which owns MarathiBana, a movie channel, says there is an increase in the volume of ads, but an effective growth in the value is missing.

"The inventory has grown by 59% from 2019 to 2022 in the Marathi genre. There is a growth of ads but they are not monetising the same value for the broadcasters," he says.

Gupta says the overall GRP the channels were garnering in 2019 to 2022 are much lower vis a vis right now. "The benchmarks will not be delivering the same amount of money. There has to be a time when CPRP benchmarks have to be done away with. The CPRP benchmarks are not correct and that remains a major challenge," he adds.

He also points to the concerns of an imminent recession and says brands are being cautious about their spends. Moreover, he says that as digital is growing its taking away a large share of television's pie.

For regional channels, FMCG, automobiles, entertainment and e-commerce are usually the highest spenders during this period. "Retail tends to be an important category for them. Some of the retailers maybe restricted to a region and it becomes an important medium. Then there are some categories that witness a spike due to market trends. For example, a real estate boom will see more ads coming from the category," Bhasin adds.

Gupta says to have their share of voice, all national brands allocate at least 80% spends in regional media.

Different categories spend on different regions based on the cultural nuances and consumer behaviours of their target audience.

Deleise Ross, AVP & Cluster Head, DDB Mudramax, says in the south categories spending the most are toilet/floor cleaners, toilet soaps, jewellery and beverages. Meanwhile, in the east personal care spends are the highest.

"Durga Puja saw a spike of around 8-12% in advertising spends in West Bengal over the last two years. Onam saw a 12-18% rise in advertising spends around the period. Categories which contributed to this spike were majorly ecommerce and personal care. This increase was due to the large advertisers increasing spends and more regional players becoming active. Radio still witnesses a slow pick up compared to the other mediums, while TV is the growth driver for the spends overall," he says.

Saini says the EdTech category is now making its presence felt in markets like Uttar Prasdesh and Jharkhand. "Post-pandemic new categories like health and sanitation have started making their presence within our market. However, the larger chunk is still with FMCG brands," he says.

However, the funding winter affecting the startup ecosystem has seemingly taken a toll on their ad spends. Bhasin says while the well-funded startups or the larger ones have continued to advertise, the trend of new startups has definitely slowed down.

"Everyday a new startup was splurging with VC money. That has slowed down a bit. However, the older ones, which are in a more mature stage, have continued to spend and make the most of the festive period," he says.

Gupta also says that startup brands have become more cautious about their spends. "Most of the new-age upcoming startups were spending based on their fundings. Their fund flows have significantly reduced and they need sometime to come back. But now only the e-commerce brands, who are getting good returns, have been bullish," he says.

Kundu agrees that the funding instability and the current economic conditions are hampering the ad spends of these brands. "Brands like Whitehat Junior, Rupeek, Upstox, Dhani Services, Velvette Lifestyle, etc. that were heavily active last year have reduced their spends from minimum to insignificant levels. Looking at the current trends, start-up brands are prioritising performance marketing over brand building. It is leading to non-activity from these clients which eventually affects the monetisation of impact properties," he says.