Ad agencies better prepared for the third Covid wave, impact on business unlikely

The year 2022 has started on quite an uncertain note for the advertising industry. Brands, as well as advertising and media agencies, were hopeful about business getting back to pre-Covid levels in 2022. However, the sudden rise in the number of Covid cases, of which a large number are Omicron variant cases, has put the industry in a wait-and-watch situation. 

According to experts, while there won’t be a knee-jerk reaction towards ad spending from brands, lockdowns and severity of the situation can result in a slower recovery for the sector. 

Mansi Datta

Mansi Datta, Chief Client Officer and Head - North and East, Wavemaker India, said, “The rise in Omicron cases in the country is definitely making companies cautious, and there is a wait and watch approach for the situation to unravel before re-assessing their business numbers. With most of India being vaccinated, coupled with the mildness of this variant, the situation might not be as daunting as was before and the air of despondency has not yet been felt. Additionally, with the learnings from the past two years marketers are more confident of navigating these uncertain times.” 

Kapil Arora

Kapil Arora, Co-Chairman and CEO, 82.5, said the last two quarters have been good for the industry and he sees the momentum being carried forward in 2022. However, the next three to four weeks will determine how the Omicron situation is impacting consumer sentiments. 

“We’re quite positive for 2022 and have plans in place to go for healthy double-digit growth. We will, of course, be watchful of the situation and keep a close tab on things month-on-month, but our clients and us, are now reasonably adept at working in this environment. The last two years have taught us to always have contingency plans in place. At this stage, we remain on yellow alert (closely monitor, but work as usual). I am approaching this period with cautious optimism and would like to believe that the industry is well prepared to tackle any curveballs,” Arora said. 

Dheeraj Sinha

According to Dheeraj Sinha, CEO and Chief Strategy Officer, South Asia at Leo Burnett, although the health crisis is a cause of concern, the consumer sentiments won’t be hit as badly as they did in FY 2020. 

He added that businesses and agencies have been dealing with the situation for two years and are better prepared with contingency plans today.

Govind Pandey

Govind Pandey, Chief Executive Officer at TBWA, India said while the cases are rising rapidly, the symptoms are also milder. According to him, the situation will be manageable as people have learned to live with the virus and the precautionary measures are being taken by them. However, if a lockdown takes place there will be a significant impact on businesses again. 

“People are being careful but there is no impact on business,” stated Pandey. 

Rohan Mehta

On the other hand, digital agencies are eyeing further growth in 2022. Rohan Mehta, CEO, Kinnect, stated the financial concerns for this quarter are much lower this year as market is not reacting strongly to the rise in cases.

“I still see 2022 as a positive year, there will be an impact if we see hospitalization and deaths. This time those numbers are being very low, even though the number of infections has grown quite a bit. We need to watch deeper metrics and if these deeper metrics start getting impacted then we can expect a significant impact on the financial side of businesses. We have significant momentum going on this year. People have realized that they have to increase the investment into digital transformation and into digital marketing, so that anyways puts us into a good spot,” stated Mehta.  

Bhushan Kadam, Creative Director - Design, White Rivers Media, stated most businesses have kept the third wave contingent in business planning for the year, hence the targets won’t be affected. 

Kadam added that contingency plans have always been there as the fourth quarter is an important one for all businesses. The good thing is that the third wave is not as severe as the earlier ones, despite this, they are shifting all advertisements to more empathy-led communication.

“The third wave is going to push certain on-ground plans, on-ground events. We also do a lot of work in the media and entertainment space so a lot of movie launches might get pushed at least by about 30 days. Generally, the third wave or the Omicron wave has lasted 4 to 8 weeks in most countries, so we are expecting a similar disruption in the country. A lot of on-ground plans might be pushed by 4 to 8 weeks, but at the same time digital-first brands are going to get a lot more prominence, and hence it is going to balance out,” Kadam said. 

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