Events, hospitality, travel-tourism segments likely to revive significantly, predict experts.
Indians have a tendency to save money throughout the year and then spend most of it, if not all, during the festive season. The season is, therefore, known as Indian economy’s saviour. Despite concerns around the third COVID wave, experts have observed a positive consumer sentiment and, as a result, an increase in overall ad spends across media channels.
With the economy now showing signs of recovery, digital, print and television ad revenues have also witnessed revival, after declining by almost 20 per cent in 2020. A recent Dentsu International report reveals that ad spend is expected to grow by 10.8 per cent in 2021, to reach $9 billion.
The festive season kickstarts with Onam and Raksha Bandhan, and advertisers have already launched multiple promotional campaigns. Brands across categories, like Kalyan Jewellers, Amazon India, Cadbury Celebrations, Vivo, Tanishq, among others, have launched festive campaigns to tap into positive consumer sentiment.
Brands are also planning to make the most of this period, since the COVID situation is currently under control and consumers are now ready to indulge in spending. Experts predict that the season is likely to boost demand, leading to a collective jump of about 50-60 per cent in festive ad spends this year.
As a result of the change in consumer habits caused due to the pandemic, a major part of the ad spends has moved to digital. E-commerce is among the major ad spend drivers on digital. A number of direct-to-consumer brands have cropped up, and several traditional brands have also taken the D2C route.
Some categories that will see increased demand include automobile, home appliances, jewellery and consumer durables. Industries, like hospitality, events, and travel & tourism, are also likely to witness significant revival.
afaqs! reached out to four experts to know what products will be in demand this festive season, the ad spends and the media segments that will see an uptick.
Himanka Das, strategic consultant – business analytics & digital transformation (ex-CEO, Vizeum Dentsu International)
As the second quarter (Q2) comes to a close, the good news is business houses have started declaring results that are already at par with pre-COVID levels, or even ahead. The health and wellbeing of every family will continue to be a priority, which means digital formats of commercial transaction (e-commerce) will continue to grow at an exponential pace.
"The health and wellbeing of every family will continue to be a priority, which means digital formats of commercial transaction (e-commerce) will continue to grow at an exponential pace."Himanka Das
With the vaccination drive and controlled infection rates, the most affected industries, such as retail, hospitality, and travel & tourism, are likely to witness significant revival.
We are living in a fast-paced digital era. Data-driven organisations are 25 times more likely to acquire customers than their peers. Hence, marketers are developing a culture of building data-driven decisions.
It’s a no brainer that internet connectivity and bandwidth is driving disproportionate digital consumption patterns, along with the linear media formats. However, at the same time, digital formats are fragmented. This, along with the absence of unified measurement mechanism, are the key challenges that are keeping us busy in building ROI frameworks to drive efficiency and effectiveness across multiple digital assets/communication channels.
Manas Gulati, co-founder and CEO, ARM Worldwide
The categories that will definitely see a boom during the festive season will be consumer durables, apparel, jewellery, home accessories and auto. Due to this, finance, as a category, will also get a boost. With the markets on an upswing, people in metros, Tier-I and II cities, who now have slightly more disposable income as opposed to the pre-pandemic era, will go in for a whole lot of revenge shopping.
"With the markets on an upswing, people in metros, Tier-I and II cities, who now have slightly more disposable income as opposed to the pre-pandemic era, will go in for a whole lot of revenge shopping."Manas Gulati
The season will attract around 45-50 per cent of the overall ad spends throughout the year. Online gifting will be the (sales) focus for platforms, like Amazon and Flipkart. Many home-grown brands have pumped up their online platforms and will now be gunning for a great season through online sales.
Digital will be close to 40-45 per cent of the overall ad spends during the season. While the overall adex is predicted to grow by 26 per cent, almost 50 per cent will be attributed to the upcoming months of September, October and November.
Digital advertising will play a big role, followed by a surge in all mediums, including TV, radio and newspaper, in that order. Up until 2020, digital spends garnered 31 per cent of the overall adex. It is expected to increase to 40 per cent, i.e. the lion's share of the spends. That being said, TV will still hold a big share of the adex, while having a restrictive growth due to the growth of digital.
Yesudas S, co-founder, Y&A Transformation Collective (ex-MD, Vizeum India)
The determining factor for the impact on different consumer products and services is supply and demand. The supply (of both goods and services) side is fully geared up. The demand side, a good part of which (close to half) also includes services, will see a surge, once the vaccination threshold is achieved.
The good news is, this is picking up steam. With the vaccination efforts in full swing and significant reduction in the fatality rates, India will, in some form or the other, open up and stay opened. There’s all around improvement in consumer confidence. It is very well evident in the markets that are open for business. I see FMCG dominating the ad space, along with e-commerce, auto, home appliances, jewellery, computers, smartphones, etc. Once the double vaccinated population hits a critical mass, a good boost to various services, including travel & tourism, could be on the cards.
"Once the double vaccinated population hits a critical mass, a good boost to various services, including travel & tourism, could be on the cards."Yesudas S
Before the turn of this year, overall ad spends will show a marginal improvement, compared to pre-COVID levels. I see the re-emergence of print, and TV losing eyeballs. Events will come back with full force once the vaccination threshold is achieved.
Shripad Kulkarni, marcom advisor for challenger brands and an ad sales trainer
I don’t see a big uptick in ad spends this fiscal. This year will be copy-paste of last year. Digital will grow at the same pace. Legacy media will decline at the same pace. Digital verticals and horizontals, edutech, BFSI, and health & wellness will do well.
A slight uptick in auto, due to some launches, is about the only change. However, lest we take it lightly, this is a big turning point in the A&M history of India.
"Digital verticals and horizontals, edutech, BFSI, and health & wellness will do well."Shripad Kulkarni
Next year will be a whole new world. We will see huge growth. But it will be in the new digital milieu. Many brands will have a lot of opportunities to look forward to, some will face more new challenges in the next fiscal. And, some will even hit a precipice.