In the modern era, as consumer consumption patterns have shifted from focusing heavily on the festive season to more balanced spending throughout the year, often influenced by the financial year's end or bi-annual sales, ad agencies have also faced a similar waning relevance for the earlier India’s much awaited festive season consisting of sales triggers such as Dussehra, Diwali or even Dhanteras.
Recalling the days when he entered the world of advertising, Sandeep Goyal, MD and Chairman, Rediffusion, shared that during those times almost 40% of the value of advertising used to be during the festive period consisting, as opposed to today when 20-25% of annual sales come during the Diwali season owing to the even-ing out of the seasonality factor that has flattened the quarterly revenue streams for ad agencies.
This year what feels most interesting to ad agency execs is the coexistence of sporting properties such as the World Cup with the festive period, which as per many ad professionals will lead to creative agency’s raking in 20-50% of their annual revenues in the latter half of the fiscal year.
“Now, because the World Cup is here, the advertising money will go to the World Cup and not just Diwali. So, it's just good news that it is happening during the Diwali season. The World Cup was coming in January, so people had to spend money in January, IPL comes in April-May. Today, clients don't have a season to advertise, they advertise seeing the triggers for communication and for sale which have quite dramatically changed from the times when Diwali and Ganpati used to be a very major season for local sales,” he added.
He also went on to add that since almost 90% of the agency’s business is retainer now and projects are more based on what the client is planning to do now rather than to do with Diwali, there’s a very little spike in demand for project work with regards to the festive period.
According to Famous Innovations’ CEO, Mithila Saraf, since the agency already generates 60-70% of its revenue from long-term retainer clients, the revenue does not fluctuate much from one quarter to the next, but what goes up actually is the need to think of clutter-breaking ideas and innovations as the festive period is the most crowded time in the media.
“With one-half of our brands like Adidas, Imperial Blue, Jacob’s Creek, etc. focused on sports and the other half going big on festivals and weddings (Van Heusen, Platinum Guild, Mia by Tanishq, Haier, etc.), our thinking caps have been screwed on since June and we’re hoping for a few bangers in Q3,” she stated.
Saraf also went on to emphasise that while Famous Innovations doesn’t usually go after one-off projects due to the belief that the true ROI of any relationship comes with a lot of time and synergy, project-based relationships albeit high margins tend to be quite ‘transactional’.
That being said, she also pointed out that while the agency continues to lead large mainline brands, 40-50% of the revenue comes from digital mandates.
Similarly, Siddhartha Singh, Managing Partner and COO, Infectious Advertising, also stated that since most of the agency’s clients are on retainers and therefore they don’t have too many projects going on, revenues aren’t really impacted by bursts of communication- just that the work multiplies for sure.
“Cricketers and movie stars are fighting for screen space and have become the new differentiator for most clients who want ‘short-term’ gains and quick eye-balls! Having said that, once they do bite into this world of stardom– they have to spend and spend more on conventional media. This is something that has happened to us too – so yes, the spends shall surely go up,” he said.
On slightly different lines, Sahil ‘Baba’ Siddiqui, Group Executive Creative Director, Dentsu Creative India, stated that while the post-festive sports marquees will be under the shadow of the newly announced taxes on online gaming and therefore be a bit damper, the creative agency would still rake in 30-50% of its annual revenues from the festive season action.
“From a spending pattern POV it’s the usual suspects who are leading the charge again- FMCG, eCommerce, Consumer Durables, Auto, BFSI, etc. Market conditions haven’t changed enough for this board to shuffle so in that sense it's similar to previous years,” he said.
Baba also mentioned that his unit remains ‘very strong’ on retainer business with long-term partners and new wins, so much so that the split between their retainer and the project currently stands at 90-10. That being said, he does foresee it changing as the agency gets closer to the festive dates with changing requirements.
As per Arvind Krishnan, Founder and CEO, Manja, as well the festive season this year is likely to be more intense as it is also a World Cup year.
Contrary to Goyal’s standpoint, going into Q3, the agency ecosystem, in his view, is likely to see the emergence of more project-based opportunities along with many first-time new ventures likely to participate in seasonal activities.
“For agencies, this is typically a very busy period and from a revenue standpoint, for creative agencies the additional project opportunities do tend to make this season a sort of a spike in their revenue charts. But since this is also a season where there tends to be a lot of pressure in resourcing, we have to be choosy about the opportunities we go after,” he stated.
To VMLY&R’s Group Creative Director, Rohan Kumar, as well, the build-up to the festive season 2023 seems to be the most exciting one yet, since what’s colliding with the festive period is the Cricket World Cup, this year.
“There's an added energy and intensity to up the ante because the fact is, every client in every agency has sent out the same brief, which is why creative boundaries have to be pushed across formats, be it storytelling, data or even AI,” he added.
In Denstu Creative’s Baba’s views, while digital films are the language of modern advertising, the content of these films is going through an evolution of sorts in response to the big cultural and tech advances.
“Most new briefs are clearly showing a tendency to lean towards the use of influencers and application of AI with novelty. While conversations around virtual worlds have reduced with caution, AR is still making sense for creatives that can make business sense,” he added.
Famous Innovations’ Saraf also pointed out that with digital of course growing fast, television still remains the largest medium by far. To her, what seems to be an interesting trend this year has been an increased focus on localisation- ensuring that the idea is universal but content is tailored for very specific regions and local markets.
“As OTT has shown us, relevance trumps aspiration in the new India and one needs to leverage the customisation that digital allows to ensure that the message speaks directly to every audience cohort. A big part of this is also last-mile and on-ground mobilisation, which we believe is making a big comeback in the echelons of otherwise niche boardroom marketing,” she added.
As per VMLY&R’s Kumar, there's a notable shift towards authenticity and sustainability on the creative front, the key to which is subtlety, because the brand message should weave seamlessly into the narrative and not feel forced.
“Brand values are implied through the actions, tone, and themes of the story, rather than spelt out explicitly. This creates a more organic connection with the audience and increases the impact of the message,” he stated.
While touching upon how hyper localisation continues to be the ad agency’s strategy for the festive period, he also mentioned that most brands would be out capitalising and in full force this time around due to the rare coming together of cricket fever and festive spirit. Still, the usual suspects- FMCG, Telecom and E-commerce will continue to splurge in addition to EdTech, FinTech, and Online Gaming.
For Infectious Advertising’s Singh as well, the spenders shall be the same this year too.
“Don’t see too much changing on that front, but somewhere the whole multiplier effect of communication is now changing to more purposeful targeted messaging,” he highlighted.