The festive period brings cheer to not only people but also brands and, in turn, to the advertising sector.
However, the picture this year has not been rosy because of less demand, which is affecting sales. The situation has led to companies cutting down their ad spends even during the festive period.
According to Sudhir Kumar, Director, Offline Media, DCMN, “This year is not good because of slowdown. If you compare last year versus this year, spends are not growing. We were expecting that there will be 10-15 percent hike in terms of ad spends, but it seems it will reduce by five percent.”
Echoing a similar sentiment is Anand Bhadkamkar, CEO, Dentsu Aegis Network (DAN) India, who said that in the current year, advertising spends are under pressure across multiple sectors due to economic slowdown and weak consumer sentiment.
Talking to Moneycontrol, Bhadkamkar said that the major sectors impacted due to slowdown and fewer ad spends are real estate, automobiles; and that there is cautious optimism amid brands.
“If you compare it with last year, auto firms are coming up with discount schemes but their advertisements are down. Which means, they are moving the spends from ads to promotional and discount schemes. NBFCs are also slow due to the current strict regulations,” he added.
Earlier this year, DAN, in its report, had said that advertising spends in India are expected to rise 11.4 percent to touch Rs 69,690 crore in 2019.
"We had said that ad ex is slower. In our forecast, we had said that the growth will be 11 percent, and for others who were bullish, it will be 15 percent. That has been corrected," added Bhadkamkar.
While real estate and auto are cutting down on ad spends, Bhadkamkar said that consumer durables and e-commerce is big now (especially because of the festive period). “FMCG used to be big but now they are moving to digital more. Brands are spending but it is moving towards promotional or non-core advertising,” he added.
However, Kumar pointed out that e-commerce has reduced their spend. “They do only tactical advertising. They are not too heavy on TV. They are there for Durga Puja and other such days. Four to five years back, they were almost present for 10 months. Right now, they will do campaigns for maximum 10 days,” he added.
Kumar added that there is not much expectation because in the first six months, events like IPL (Indian Premier League), Lok Sabha elections and the World Cup took a lot of money from advertisers. “Small advertisers are skeptical. They are watching this period with caution. Spends will remain low as compared to last year. Plus, broadcasters are bleeding due to the new cable TV pricing regime,” he said.
When it comes to ad spends on the digital medium, Shrenik Gandhi, Co-Founder and CEO, White Rivers Media, is optimistic. “There are a lot of sectors that have diverted a lot more spends on digital because it is comparatively more effective in most cases,” he said.
“Brands are pumping money on programmatic media rather than shots in the air, as it is a lot more targeted and has given better results in recent years. Brands, that we work closely with, divide the year across 15 spend periods (five quarters). I believe, the festive quarter spends are as good as two quarters spends,” he said.
“A lot of sunrise categories are investing more in festive sales. Good traction is seen across Bollywood and OTT (over the top) platforms as well, as that’s a cheaper and more entertaining option compared to other Diwali spend avenues,” he added.
Bhadkamkar also said that as digital is more efficient, brands are moving to the medium. He said that digital’s overall share is reaching 16-17 percent and gradually it will move to 30 percent in the next three to four years. Last year, its share was between 12 to 15 percent and now it is moving to north of 15 percent.
However, Kumar contends that ad spends on digital are more because all other mediums are saturated. And that spends on digital look big because the base is low.
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