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Advertising expenditure likely to be undeterred even if there's an Omicron-led third wave, feel experts

Unlike the first and the second waves, the potential third wave, which is likely to be caused by the Omicron variant, may not impact the overall advertising sentiment much as there are unlikely to be anymore full fledged lockdowns, say industry experts

The first and the second Covid-19 waves impacted the Indian advertising industries severely, there was a 20% drop in ad spends in 2020, and during the second wave brands across categories had toned down their advertising. However, advertising started picking up as things started to get back to normal with vaccination rates going up, TV production resuming, and with events like IPL, Cricket World Cup being held in the latter half of 2021. 

Now as the new Omicron variant spreads across the country, experts say that advertising expenditure of brands is likely to be undeterred even if there's a significant spike in the number of Covid cases in the country.

According to Niti Kumar, COO, Starcom, there are concerns about offices reopening and people having to go back to the work-from-home mode. “However, from a business context so far we have not heard from any clients who have been overly worried about this causing change to their business patterns. We have not seen any concerns or seen clients change their spending. Everyone is waiting to see how the situation pans out.” 

She said if the situation does get severe, companies are better prepared today to deal with the situation and know what to do.

RS Sodhi

According to RS Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation (Amul), the FMCG category is unlikely to be impacted. He also said if at all restrictions come up for industries like hospitality and travel, the impact on them (Amul) will be 5-7%. 

“However, we don’t expect any impact of Covid waves three or four. Even in the first wave, we were not closed for a single day or a minute. We are absolutely prepared. Last year when Covid came, we actually doubled our spending on advertising as we got good deals as others had decreased their spending. So, our brand building will not be impacted,” Sodhi said. 

Ipshita Chowdhury

Ipshita Chowdhury, Chief Marketing Officer, Valvoline Cummins, stated, “There have been new cases, it is a threat certainly. But I think- what we anticipate is that media perhaps is a little bit more prepared now, the vaccination rate has gone up and if by December end double vaccination number get on track, I would anticipate this wave won’t be as hard to face as the second wave. The second wave was really hard because of the unpreparedness, the vaccination was nowhere near optimum at that time, and those two variables have changed now. So, in my opinion the impact would be lesser, but of course, these are unpredictable times. From our perspective, we are not holding back any investments.” 

Rajiv Dubey

Rajiv Dubey, Senior General Manager Head of Media, Dabur, said the impact of this wave could be milder as people are getting vaccinated at a fast pace in India. “Dabur did not hold back any advertising investments in the first wave or the second wave. If you see our investment patterns from the past two years, they have been continuous. We have invested behind our backs and launched products and gone about business as usual. We have not faced any disruption in that regard. So, there is no question about holding back investments now.”

How will agencies be impacted? 

Ritesh Singh

Ritesh Singh, Co-Founder and MD of #ARM Worldwide, said till the time the severity of the infection is not known, it will not be a concern. He added that in the Indian market, where people have been vaccinated, the impact of the disease should be lower than the impact of the second wave of Covid. 

“The impact of this virus is clear on the stock market; it is plunging from the past few days. But we will have to wait and watch if that is the final sentiment. It is not just about this new virus, we were wondering what will happen to the old variant post-Diwali and there is some surge in numbers but I don’t think it will impact marketing activities,” stated Singh. 

According to him, the ‘need’ products will continue to advertise while other categories have had enough learning from the past two years to deal with the situation.

Speaking about how it may impact the digital ad spends, Singh stated, “Smaller brands have started moulding their businesses towards digital so we will see more people jumping on the bandwagon. Whether the spending goes up, is something that will depend on how the entire markets behave. People who are looking at immediate returns and have little money to spend, obviously, will be more careful. However, there will be smarter people who would want to capitalize on the opportunity when others are not spending.” 

Nisha Singhania

According to Nisha Singhania, Co-Founder and Director, Infectious Advertising, people are slightly worried as things had just started to go back to normal and offices were reopening. She said however, the businesses would not be impacted as everyone is comfortable with the work from home model. 

“I think it is too early to see if people will stall their spending. The good thing is that this time everyone has enough learning about how things should work. Businesses and even the medical system are a little better prepared.” She added that Infectious was planning to open an office in Mumbai but they will now have to see how the situation pans out.

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