Smartphone brands dial up festive adex surge

New Delhi: The festive season has been a hotbed for phone launches, and no launch goes without a hefty ad spend. With the festive season in town, experts are already anticipating a bull run in the phone brand category. 

This period is traditionally associated with heightened consumer spending, and brands across sectors, including smartphones, typically ramp up their advertising efforts.

According to Sahil Chopra, founder and CEO of iCubesWire, “Usually, the time frame from September to December is seen as critical as brands like Samsung and Apple introduce their latest models owing to festivities around Christmas. The July-August time frame is more of a pre-buzz phase where companies significantly ramp up their marketing budgets. Reports show brands collectively spend somewhere around 20% to 30% more during these periods. This ad spending increase gives a noticeable push to overall Adex, especially in the digital and television sectors.” 

Adding more substance to the matter, Abbhishek Chadha, EVP, North & East, Interactive Avenue, said, “Most original equipment manufacturers (OEMs) are expected to allocate about 30-40% of their budgets during the upcoming festive period. Heavy discounting, combined with attractive trade-in values and financing options, is likely to spur demand, particularly in the entry-level segment, where many consumers are looking to upgrade. We anticipate a considerable increase in festive spending.” 

The entry premium segment, with devices priced between Rs 16,000 and Rs 80,000, has shown the most significant growth in the overall smartphone market. In contrast, the entry-level segment (Rs 8000) has seen muted growth despite the launch of affordable 5G-enabled devices. Factors such as heatwaves, elections, and a general economic slowdown may have contributed to this trend.” 

Sharing his thoughts on the phone brands’ adex trend down South, Anup Mathew, SVP, Media Solutions, Mathrubhumi, said, “During the festive season, the sales of smartphones surge in multiples rather than in percentages. We are seeing continued investment from both brands and retailers in our market during the festive period and expect double-digit growth this season.” 

When asked if Adex is expected to surge further considering the festive season is around the corner, Chopra said, “During the festive season, ad spending witnesses a substantial surge as brands compete for consumer attention. We could see as much as a 50% surge above the average monthly spend. This period is often highlighted by aggressive sales-driven campaigns across all media channels, including digital, TV, and outdoor, as brands push to maximise their market share during this peak buying season.”

Echoing a similar sentiment, Haresh Nayak, Founder & CEO, of Connect Network Inc., said, “With the festive season approaching, Adex for smartphone launches is likely to surge at least by 15%. Advertisers often ramp up spending during this period to capitalise on increased consumer spending and heightened brand visibility.”

Coming onto the media mix employed by smartphone brands to ensure maximum visibility, Chadha foresees e-commerce, social media, and performance marketing to continue dominating the adex for this category, accounting for over 60% of the share of expenditure. 

Diving deeper, Saurabh Sharma, Head of Marketing, HT Media, offered a holistic perspective on the media mix. “We've observed a clear trend towards a diversified media mix where print and digital platforms take centre stage. Brands are increasingly leveraging digital platforms and are leaning on e-commerce and performance-led marketing for their precise targeting capabilities and measurable ROI.

While digital is gaining prominence, print media, despite its traditional roots, remains vital, especially in tier-2 and tier-3 cities where consumers trust established publications. Radio and outdoor advertising also play important roles in localised campaigns and in creating a sustained brand presence. The media choices reflect a balance between traditional and new-age platforms, tailored to the brand's objectives and target audience,” said Sharma.

Focussing on digital ad spending in the space, Chopra said, “Brands allocate a huge chunk of their marketing budgets to keyword bidding and SEO, something around 30% to 40% because these aspects directly affect purchase decisions on e-commerce platforms. Platforms like YouTube demand a substantial share, often around 20% to 30% of the digital budget. This is primarily due to high engagement rates and how effective short video content is when it comes to driving consumer interest.”

To add, Chopra expects performance marketing to lead the pack, followed by influencer marketing. “Performance marketing is preferred for its measurable ROI and its ability to target niche audience segments. Influencer marketing, while growing insanely, takes up a small chunk compared to performance but remains a key aspect for brand awareness and engagement, especially in targeting younger demographics,” he added. 

Deviating from digital, out-of-home, or OOH marketing remains a key focal point for brands trying to attract eyeballs in densely packed urban spaces. Mentioning the role of OOH in densely populated areas, Darshan M., CEO of Pressman Advertising, said, “With technical advancements of digital screens and anamorphic displays, OOH and DOOH have become the go-to platforms to create innovative marketing spectacles to engage with the audience and create viral marketing trends and moments. 

We expect brands to use DOOH and OOH as major mediums during the festive period to create differentiation for the offerings; the media asset owner's creative and tech team will play a pivotal role in helping the innovative approach come alive.”

Resounding the same bugle, Nayak predicts that the OOH category spending this year will be higher than last year; on average, the spending ranges from Rs 7 crore to 10 crore per brand depending on the market reach of the brand.

Diving into the nuances of OOH advertising, Darshan said, “In OOH advertising today, programmatic marketing holds the major share as it is real-time and helps create innovation. It is generated according to people’s interests and demographics. 

Secondly, performance marketing is often used to help target the audience as per the demographics, while at last influencer marketing is built for social media marketing where influencers create content and share the product details.” 

Speaking of noticeable patterns or trends in the media buying and planning behaviour of brands, Sharma expects branded content to go big in 2024. From the horse’s lips itself, Sharma said, “Branded content solutions will be instrumental during this period, allowing smartphone brands to create immersive and engaging narratives that resonate with their target audience. By integrating brand messaging seamlessly into high-quality content, brands can enhance their storytelling and deepen consumer connections, ultimately driving better campaign results.” 

According to Counterpoint Research, India's smartphone shipments fell 2% year-over-year (YoY) in the April–June 2024 quarter, despite recording the highest-ever Q2 value. This decline was influenced by a number of factors, including a heatwave, seasonal slump, and slower demand in the first quarter. 

Responding to queries about how the slump in smartphone sales will impact advertising spending by brands, Nayak said, “Any decline in sales leads to budget cuts, and the advertising industry will see it. The clients will look at cost-effective ad strategies and channels. This could lead to a greater emphasis on performance-based advertising where ROI is more easily measurable, such as through programmatic and SEM. Working with brands in the category, we have also seen brands exploring new markets and reaching up to tier 5 towns using ooh and rural marketing.” 

Providing a perspective on the registered decline in smartphone sales, Darshan said, “In response to declining sales of smartphones, the advertising spends are likely to decrease overall ad expenditure because companies work on retention rates and value-cost-effective measures. The changes depend on strategies, like if brands choose to shift to better engagement platforms. The impact always occurred based on the outcome.”

Offering a different viewpoint on the matter, Nayak said, “The smartphone market is indeed undergoing a rough patch in sales, especially the mid-range segment. However, this hasn’t resulted in a noticeable reduction in ad spending. Moreover, brands are taking on more strategic routes, driving high-impact campaigns that make use of AI technologies to offer personalised marketing. The dip in sales has pushed brands to invest more in performance marketing to capture the attention of a smaller, but niche, audience. This keeps the ad spending robust even when we witness a decline in sales.” 

To wrap it up, smartphone brands significantly increase ad spending, especially in digital and OOH platforms during the festive season. What is important to note is that despite a decline in smartphone sales, ad spending remains robust, focusing on performance marketing, branded content, and innovative media strategies to capture consumer attention.