ï»ż

Best Media Info

Editor’s Picks
Special
Interviews
Events
Cannes Lions 2019

Guest Times

cms

Sluggish economy and subpar monsoon may affect India's adex growth in second half

With the economy slowing down and monsoon being below expectations so far, India's advertising expenditure may take a hit. The media industry now hopes that the budget would accelerate growth for the remaining year

Generally, advertisers are aggressive towards the second half of the year as it is loaded with the festival and holiday seasons. The ad market witnesses heavy spend as most brands keep a set budget for these regular activations every year. 

But this year, the market might witness some change in its brand activation as the first half of 2019 was filled with three marquee events — the Indian Premier League, the World Cup and the General Elections.

The optimism of the first half of the calendar year may not be carried to the second half given that economic growth has slowed down and the monsoon is not picking up according to expectations. This in turn may adversely affect India's advertising expenditure.

The media industry now pins its hopes on the upcoming budget to accelerate growth for the remaining year.

BestMediaInfo.com spoke to advertisers and industry experts about the expectations from the ad market and if there will be careful calibration among advertisers for the second half of 2019.

According to experts, not all brands and advertisers had participated in the marquee events and as a result, the second half would have regular activations. But the advertisers are still sceptical about the budget size, given the economy is being sluggish.

Sectors such as Auto and Real Estate have seen sales shrinking. FMCG isn't picking up either. All of this may force advertisers to have a re-look at their budgets.

According to a Dentsu Aegis Network report, advertising spend in India is likely to rise by 11.4% to Rs 697 billion in 2019. Whereas despite TRAI’s NTO, television will continue to be the dominant force in India and is estimated to contribute 39% of the total ad spend in 2019. Television is forecasted to expand in 2019 by 9.5% to touch Rs 27,140 crore.

Sujata Dwibedy

Sujata Dwibedy, EVP & Head of Buying & Trading, Amplifi India, said, “The second half of the year is always hectic and there is decent traction in advertising. 60% of advertising spends happen post-August. Though, the first half of 2019 was marked by big events, I don't think the spends will go down. It won't be in the same momentum but still it will be high from August across the festival season. The brands that spent during these seasons will keep spending. Also, the kind of advertisers the sports and election events attracted are very different. Advertisers for these events are more target-centric, like it is more male-centric. So, the FMCG brands will still come in play for the second half of the year.”

Ravi Shankar K

Ravi Shankar K, Sr.VP, India Online Business, Langoor said marketing budgets have been marked up for this year in many cases, so regular activations will continue but will be more focussed on performance. However, he warned the budgets on brand metrics will be muted in the second half of the year.

Monsoon and economic growth to determine ad spends

Most advertisers said ad-spend calibration will take place more on the basis of the monsoon and the country’s economy; and not on the three events that took place in the first half. According to the advertisers, the slowdown in the economy is the deciding factor, which is the reason why there weren’t too many brands investing in the first half of 2019 as they were in a wait-and-watch situation.

“From the advertisers’ perspective, events such as the General Elections or IPL weren’t very positive for advertisers. The events were high from a value perspective as the ad spots were very expensive but not too many brands invested much in the market. The events weren’t much high from a participation point of view,” the advertiser said.

While there wasn’t much participation from advertisers across sectors, brands are now hoping to have a good monsoon and a financial budget to boost consumption during the festival and holiday season.

Sandeep Verma

Sandeep Verma, President, Bajaj Corp, commented, “In the second half, hopefully, the monsoon will be good and the state of the economy is going to improve, following the state government’s plan for some fiscal initiatives to improve consumption. Following this, advertisers will plan advertising campaigns or new launches. I expect a lot of activity from the automobile sector, which till now has been pretty quiet since the economy wasn’t doing well. A lot of launches had been postponed as they are waiting for the monsoon to settle down as well. So there will be pent-up demand for all consumer durables and not just automobiles. These demands due to a good monsoon and the fiscal stimulus from the government should have an overall positive impact. We expect the second half of the year to be a lot more positive and stronger for the advertising industry.” 

BK Rao

BK Rao, Marketing Head, Parle Products, said that though advertisers had burnt money in the first half of the three big events, there is a lot to come in the next six months. He said the monsoon is a deciding factor for the festive season.

“Monsoon is one key factor in terms of determining spends for the festive season. A lot of calibration for the festive season, which is August-December, happens during the monsoon period. A lot of CPT and non-CPT advertisers depend on the festive season. If the monsoon is good, the sentiments among consumers will be positive, be it rural or urban, thus boosting consumption. However, if there is a drought, then the sentiment will be low,” he said.

Rao said they will be aggressive for the rest six months as it is the right strategy. “Advertisers should be aggressive when things are low. When things are high, it is okay to be less aggressive but when things are low it is not wise to cut spends as the chances of losing consumers are very high. Most advertisers are aware of that fact and so according to my rationale, the spend is going to be high and positive,” he said.

Festive and holiday season to attract advertisers across sectors

RS Sodhi

RS Sodhi, Managing Director of Gujarat Co-operative Milk Marketing Federation (GCMMF), which runs the popular dairy brand Amul, said that since the second half is full of festivals, most brands keep a set budget for a year for these regular activations. “The regular activation will continue in the second half, our focus will be primarily on the festival and holiday season.”

Surendra Kumar Bajaj

Surendra Kumar Bajaj, VP Marketing, Lux Industries Limited, also said that they will be aggressive in the third and fourth quarters. “Though we haven’t taken the World Cup, we were present in IPL and we were heavily present on all the news channels during the General Elections. For us, the second quarter will be slightly muted and then we will be aggressive in the third and fourth quarters. For us, the second half is off-season, we hardly advertise from mid-July to August-end. We will come back from September with our winter collaborations. However, this is not the first year we are doing this, we are doing every year and this is normally the trend.”

Verma also said the festive season in the second half is a bigger event than anything. He said the festival season itself will see a lot of advertising spend coming in and then we have winters, which have Christmas and the holiday season.

Ad calibration for TV will be on back of digital

The choice of traditional media vs digital media is the point of consideration/calibration for most brands. With an increase in the penetration of smartphone and internet, digital is the fastest growing medium and contributing to the highest incremental spends on media.

Rasika Prashant

Rasika Prashant, CMO, Soulfull, said though digital is the fastest growing medium, TV and print are still the biggest media and brands that need more reach will have to stay invested. “The overall increasing consumer demand will keep the adex growing this year and total spends should touch the $10bn mark. Ad spends will continue to grow by a stable 10-15% rate even this year.”

Rasika said, “We have always taken a multi-platform approach for our brands. Digital continues to remain in focus for us as it allows us to reach our target audience in a sharper manner. Activations will continue to be a strong pillar for Soulfull brands to drive demand. For kids-focussed snacking brand Rag Bites, we are looking at school programmes, kids marathons, etc., for sampling and driving affinity. For our brands like Smoothix and Millet Muesli, which are targeted at the youth, digital, print and strategic partnerships will lead the way.”

Info@BestMediaInfo.com

Advertisment
Post a Comment