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Brands may go slow on non-IPL ad spend as Covid-19 restrictions threaten supply chain and consumer sentiment

The country’s leading advertisers are on the wait-and-watch mode as state-wise curfews may hit the overall consumer sentiment. Some brands are worried that the restrictions may even impact their supply chain

As more and more states put in place lockdown-like restrictions to curb the spread of the Covid-19 pandemic’s second wave, brands are going back to the drawing board to revisit their media spend strategy for the ongoing quarter. 

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As consumer demand was getting back on track in February and March, several brands had prepared ambitious media plans to make the most of the increasing consumption. However, with the rise in Covid-19 cases and the implementation of lockdown-like restrictions by the governments, the overall demand is likely to be dampened. 

Keeping this in mind, brands are holding back a part of their media expenditure. However, spending on the Indian Premier League is going to be intact as it is the only live big ticket event property.   

Mayank Shah

Mayank Shah, Sr. Category Head, Parle Products, said there certainly has been a temporary setback and curtailing of some of the spending. While a revival in demand that was happening earlier, the second wave has made companies think twice before they go ahead and spend on media.”

He said, “The situation is more or less similar to the first two quarters of last year. So even if one wants to advertise, which typically is the case with new product introductions or launches, it may take a little bit of backseat. I wouldn't say that brands won't advertise at all but will push back their plans.”

While Parle Products had plans to go on air and advertise, it now is waiting and watching the situation. It is being very cautious of putting money on any big programmes as there are discussions on curbing the shooting.

“Currently we are being very cautious before signing bigger programmes. The allocation to digital medium has increased over the last one year from probably about 10 to 12% to 18 to 20%. And I think most players would retain that kind of spends going forward. Digital saw a huge amount of investment in the first two quarters last year, but in the third and fourth quarter, it tapered a little bit, although it was still much higher than what it was earlier (in 2019). With the second wave, digital will pick up again,” he added.

Gurpreet Singh

Gurpreet Singh, Head, Marketing, UBL, believes the onset of summer will help improve the demand in the category (alco-bev). However, as the pandemic is far from over, and there will be instances where the authorities, in the interest of public health, will need to take appropriate decisions, it may impact an opportunity for sale or consumption in the short term.

“We are staying vigilant on the developments across all key markets and staying nimble about our reactions towards such changes. With the overall business coming under pressure for most of the financial year 20-21, tough choices had to be made in how we went about marketing our brands. The focus on what we do on the digital medium and how much we spend on it certainly underwent a massive change. Due to the restrictions in on-ground events, our investments in this area naturally came down,” he said.

He said IPL is a much-awaited sporting extravaganza for all Indians and all major appointment-viewing activities will always have a high interest for advertisers, despite the second wave.

Joy Chatterjee

While many brands decided to reduce marketing during Covid-19, Joy Chatterjee, General Manager, Sales and Marketing, Mankind Pharma, believes there is a wealth of historical evidence to suggest that this is not the best strategy— both for protecting profits in the short term and for helping the brand to recover in the long term.

Even last year, the company did not pull off its budgets, in fact it aggressively was promoting its brands to have top-of-mind recall.

“I believe since people are sitting at home, this is a rare opportunity for brands to reach a larger audience with great value media spots. Yes we have moved most of the budgets to digital medium since it’s a much more economical and flexible channel. Earlier the budget allocation was 20% which we increased to 35%. This budget shift was obvious as digital media is consumed at a higher rate due to the online lifestyle of the post-corona consumer,” he said.

For it, influencer marketing, especially with regional ones, is a key to reach its audience as people are spending more time on digital. Also, it is spending on e-news portals while elections are going on.

Chatterjee believes spending on IPL won’t be altered thanks to OTT and the nation’s undying love for cricket. And while stadiums won’t be packed with thousands of passionate fans, OTT platforms like Hotstar are in a prime position to capture an even greater audience.

Smita Murarka

Smita Murarka, Vice-President, Marketing and E-commerce, Duroflex, said, “Even when business seemed back to normalcy during the festive period, we kept building on it. So, our focus remains aligned to the current needs. We made it a point to keep connected to our consumer and even brought out an array of new products based on their need in the pandemic.”

Vijay Kaul

Speaking on behalf of the auto sector, Vijay Kaul, Deputy General Manager, Marketing Communication, Yamaha India, said there will be a low consumer sentiment, but for the category, he has seen demand rising during restrictions. This is mainly due to the fear of public transport. He said it has been a year now and people have learnt to live with Covid. Now with the vaccination drive increasing across age groups, he is hopeful of things coming back to normal soon.

“We continue to spend as planned; yes there might be a change in media mix and approach.  For example, digital and TV spending will be higher in the markets where restrictions have been imposed. I guess IPL inventory is almost sold off this year, which means the second wave will not impact IPL, but it might boost the viewership on TV. I also believe restricted lockdown will surely impact OOH and print tactically to some extent.”

Apart from IPL, he said movies and news will get a boost as in recent times, both these genres gained more traction.

“In spite of no BARC ratings for news channels, ample brands are associated during election time and will continue in the latter half. Secondly, during lockdown, we have seen the movie genre gaining viewership. In fact, television consumption in India increased by 9% on the back of the Covid-19 pandemic in 2020,” he added.

Shirish Agarwal

Shirish Agarwal, Head, Brand and Marketing Communications, Panasonic India, said that amid all this, digital remains the key constant. From not just being limited to promotion, but also becoming a preferred point of purchase, keeping the safety and hygiene needs in mind. The industry has realised the underlying potential digital platforms have and are experimenting with different ad forms and more engagement led content.

“On TV, we are focusing on the news genre as it has high affinity with our consumers/target audience. On the other hand, we are heavily investing on digital as consumers are using digital platforms to do thorough research on their choice of brand, model, features, etc., before walking into a store to make a quick purchase. And as this research is primarily happening on digital platforms, it is an extremely important touch point for us,” he said.

Shah said the impact of Covid-19’s second wave on FMCG is very limited, especially on processed food-related products.

“It is not like the business may not get affected, but your brand and your priorities may. With the lockdown, the preference for certain brands would be higher since brands will have a limited labour available and everyone will try to optimise production. While broadly at a macro level, there won't be any major impact on FMCG, but at a micro level or at a brand level, not everyone will get an equal opportunity to sell right now. Companies would prioritise certain brands to ensure that their business doesn't get affected with the given restrictions,” he said.

Chatterjee said it is certainly impacting the business for many as the government has re-introduced stricter measures like night time curfews, sealing off premises in order to contain the spread. Also while people are sitting at home, consumption of acute medicines is taking a hit.

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