- The first half of 2020 was so unusual and unprecedented that the advertising industry fell by up to -60%.
- Businesses of all kinds and sizes have suffered and suspended their advertising activities to give their consumers the space they need to manage the unprecedented times.
- Thus, after a year and a half of calm, brands and advertisers have gone into overdrive during the end-of-year celebrations this year. Consumers were very excited to go out, shop diligently, and as most research studies have shown, Diwali exceeded expectations and broke previous records.
- So we talk to media experts and digital agencies to find out if the ad industry has managed to bounce back this year, discuss industry spending so far and their expectations from the latest festival of season, Christmas.
After a year and a half of celebrating festivals virtually, Indian consumers were delighted to find some sense of normalcy this year during the festive season. Advertisers and brands have also pulled out all the stops to capitalize on this surge in consumer sentiment, from Raksha Bandhan to Diwali. Experts also hoped the holiday season would bring joy and serve as a respite from the slumber associated with the pandemic.
According to Redseer Consulting, 2021 has seen India witness its biggest ever festive sales with brands recording a gross merchandise value (GMV) of $9.2 billion through online channels during this period. India’s online festive sales continued to grow at a blistering pace and recorded 23% YoY GMV growth. On the other hand, categories that saw moderate growth this year included home furnishings, home decor, furniture, and other electronics.
Looking back on 2020, Eeshita Ghosh, Managing Director and Head of Office, Motivator Bangalore said, “The 2021 festival is definitely better than 2020 and as high if not higher than 2019. The volume of announcements started to increase from from the third quarter of 2021 and with more growth above 20% compared to Q3 2019. The months of the festival have seen several new advertisers become active, approximately 2000+ new advertisers are active in the media. Inventory was full and market sentiment was very positive. With the festival and the IPL, the media has been very active with several new categories. »
Many hopes were pinned on the holiday season for the overall revival of the industry, however, unlike Ghosh, Neena Dasgupta, CEO and Director, Zirca Digital Solutions was a bit disappointed; not with numbers but with global creativity.
Explaining why, Dasgupta said, “Honestly, the performance didn’t meet expectations. Not only in terms of volume but also type of activities. I felt that our methods had perhaps regressed a little to remain cautious and conservative. Innovative ideas were few and yet each of them benefited. The consumer is now more aware and it is time to take his psychometrics into consideration. And in times when media dollars need to be more effective and efficient, we need to embrace technology that allows us to capture the mindset of consumers and then deploy media buys across all mediums.
Sharing how the festive season has gone so far for the advertising industry, Dasgupta added, “It has been an interesting festive season. There was exuberance in the consumer spirit and this was reflected in certain categories. And yet, the exuberance did not necessarily translate into communication on the same scale. It may have been a combination of inflation, economic imbalance at the consumer level, and some category constraints that impacted sales. What was interesting, however, was the growth of rural business on the consumer side and advertising as well. Each medium had its share. And the growth of fintech has made certain aspirations for this segment a reality. We now have a fascinating growth story for Bharat.
With a steady monsoon and a bountiful harvest so far, it has also been a joyous year for rural India. They spent their harvest celebrations with more enthusiasm and happiness to share with their loved ones. The brands also spared no effort to expand their marketing activities beyond metropolitan and Tier I cities this year. In fact, this year, Tiers II and III took the lion’s share of e-commerce spending.
Are we going back to 2019 ad spend?
After June, the performance of the advertising industry accelerated by leaps and bounds. Raksha Bandhan, Ganesh Chaturthi and Ace Diwali Festival, have improved consumer sentiment and helped the advertising industry rebound. But are we back to 2019 levels?
“ADEX numbers for October and November are still pending, but as we observed from our billing, we are confident that it has rebounded to 2019 levels,” Ghosh said.
Dasgupta told Advertising and Media Insider that regional and rural markets have surpassed 2019 performance, but some markets have yet to do so.
Deciphering media dispersion in this festive season
While there was momentum across the board, TV once again captured the most advertisers’ attention, followed by digital.
Speaking about the dispersion of media, Monaz Todywalla, CEO of PHD Media India, said, “In terms of media, TV and digital continue to impact and lead head-on, with digital playing a vital role in ensuring last-mile connectivity and drive sales across multiple touchpoints.
Raman Mittal, CMO and co-founder of TO THE NEW, was thrilled to see digital taking a bigger slice of the pie than in 2020.
He said: “COVID has revolutionized the way people shop. We have seen businesses go all out on digital channels this Diwali season to communicate with potential customers. Businesses have adjusted their focus on digital marketing to keep up with new buying channels and get the bigger piece of the pie due to continued digital transformation.”
“Interaction and influencers were the two themes that culminated this festive season,” Raman continued. “Online giveaways, contests and surveys have been used to promote interactive content. Additionally, top celebrities have been enlisted to help brands stand out among the crowd. These trends, we believe, will last until at Christmas and New Years.”
In digital, video attracted the most attention and, although traditional advertisers continued to spend heavily, they were matched and sometimes overtaken by online services/startups.
Mihir Karkare, co-founder and executive vice president of Mirum India, said, “Videos have dominated this festive season. Online video platforms were in high demand – YouTube and OTT were the preferred choices for brands. Apart from Diwali, all cricket stocks also contributed strongly. towards an increase in advertising expenditure. From a “market share growth” perspective, influencer marketing has come of age.”
Hopes rest on Christmas
Christmas is the last holiday of the year. Will it provide additional momentum and help the ad industry surpass 2019 performance?
“Christmas is a bit low, but we’ve seen many advertisers continue the momentum created in the third quarter period. I expect Q4 to look like Q2 and be higher than Q4 of 2020 and close to the Q4 of 2019,” Ghosh replied.
PHD Media’s Todywalla is optimistic the momentum will continue and brands will continue their marketing blitzkrieg.
“With consumers showing an increased propensity to spend, pent-up demand from brands resulting in a bouquet of launches – complemented by high-decibel marketing campaigns, and an overall increase in consumption and sales from all corners of the media and entertainment ecosystem, the festivities ushered in a season strewn with a healthy dose of optimism. We believe this wave of hope and optimism is set to continue in the coming year as well,” said Todywalla.
With a huge surge of key festivals such as Diwali, Ganesh Chaturthi and Raksha Bandhan, cautious optimism continues to flourish in the advertising industry.