Can ad industry weather another lockdown?

Industry watchers note that the lockdown, if extended for a long time, could impact sectors like retail, cinema, F&B that were finally showing signs of recovery

e4m by Misbaah Mansuri
Updated: Apr 8, 2021 8:42 AM
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Just when the ad industry was hoping for better times, the recent news of another lockdown cropped up. A year to Covid and the question ahead of the industry still remains: Will that lead to continued budget cuts this year and dampen the sentiments of advertisers who were looking forward to embarking on the 2021 journey with their best foot forward? Will it further bite through brands that were already deflated by tighter purse-strings since last year?

Anand Bhadkamkar, CEO India, dentsu, notes that while it is too early to comment, another lockdown and increase in cases will impact advertising if continued for a longer period. “What's better is that this lockdown is more localised when compared to the previous ones. The sentiments are still positive as this time business activities have not been brought to a halt, unlike earlier, with less likelihood of disruption of the supply chain. More than 7.5 crore people have been vaccinated and the government is taking all the actions to ensure that business activities are least disrupted. So, sentiments till now are positive,” he opines.

The Maharashtra government earlier this week announced that weekend lockdown and night curfew will be in place from April 5 to April 30.

Naveen Gaur, Deputy CEO, Lowe Lintas, says that while ad agencies have well adapted to the new normal, a soft or a controlled lockdown like the one in Maharashtra will have a regional impact which may affect media spends on OOH, radio, events & activations. “We don’t foresee a situation of a complete lockdown in the shape it existed last year because, in India, our single biggest learning is that preserving lives and livelihoods should be the cornerstone of decision-making for governments and businesses. For creative agencies, business & operations will continue to happen in the ‘new normal’ as reflected in the nimbleness with which we have carried on over the last year. Especially after the experiences of last year, brands should remain connected with the consumers. Agencies will continue to play a vital role in keeping these connections intact. The only impact on agencies would be a long wait to get back to offices - something, which we at the end of the day look forward to being in a people's business,” asserts Gaur.

In the past couple of days, eight states including Maharashtra, Chhattisgarh, Karnataka, Delhi, Tamil Nadu, Uttar Pradesh, Madhya Pradesh and Gujarat account for 80.96 per cent of the 93,249 new daily COVID-19 cases, according to the Union Health Ministry.

Rohit Ohri, Group Chairman & CEO, FCB India, notes that categories like cinema, retail, F&B which were finally picking up after the Covid-led hiatus are likely to get affected by the lockdown. “What’s better this time is that it is not a complete lockdown but a partial one. However it could lead to negative market sentiments, something that causes contraction in demand. The weekend is the time when people go out to the movies or restaurants. With curfews and lockdowns imposed during these times, categories like retail and entertainment might get impacted,” he opines.

As per the latest Maharashtra government guidelines, except for those who provide essential services, all shops, markets, and malls in Maharashtra will remain closed throughout the day.

Anil K Nair- CEO, VMLY&R INDIA, feels another lockdown could affect footfall, retail confidence, pre-festival energies and all the advertising efforts associated with it.

“The pandemic has spent more than a year with us; the virus has overstayed its visit. It has wreaked havoc with the way in which we live, learn, work and play. This generation is facing a crisis of this nature for the first time and was kept afloat with a misplaced sense of optimism that the pandemic would magically disappear and life would return to normal. A year later people are weary and we are on the verge of another lockdown and maybe even a series of them. And that too just before the great Indian monsoons, the big festival season, a cricket world cup and maybe even an Olympics, in this year’s calendar. All of which are tipping points for a better performing economy, increasing consumer consumption and  a thriving advertising ecosystem,” he remarks. 

On the other hand, Nair notes that it could influence brands to consolidate and build on 2020 efforts and investments in e-commerce, omni-channel and D2C with overall investments into digital and digitisation likely to keep growing. “Agencies are a sounding board for their client partners and it’s important for them to accurately give feedback on market and consumer sentiment and to partner their brands to make the right decisions to tide through what threatens to be a stuttering start-stop kind of a year,” he states.

Another industry observer who didn’t wish to be named said, “Demand was returning fairly dramatically. Clients were taking the opportunity to make up for the lost previous quarters. Everything seemed to be getting better until the lockdown was announced. If the cases increase and the lockdown is further extended, then it will definitely hit the industry hard.“

The source advises that with IPL upon us, agencies need to be fluid with the way they deploy their people to support clients through this period.

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