Digital ad spends returning to pre-lockdown levels; performance marketing takes lead

The ad spends of e-commerce players, both marketplaces and D2C brands, were the first ones to bounce back

e4m by Tasmayee Laha Roy
Updated: Jul 23, 2020 8:25 AM
digital

The pandemic-induced lockdown battered advertising across all sectors as marketers were cautious to spend their monies. But as India Inc enters Unlock 2.0, digital medium sees the quickest recovery, with performance marketers taking the lead in bringing back their budget. Story telling by brands might not have taken a backseat completely during the lockdown but now selling has taken a clear lead.
As per TAM AdEx’s latest report, digital advertising numbers saw resurgence in June 2020, with quantum of advertisers and brands in June 2020 surpassing the average count of January 2020-March 2020.
“Numbers started coming back in May. May saw 40-50% better numbers than April when it comes to ad spends, and June is better than May lead by performance spends coming back faster to digital,” said Gautam Mehra, Chief Data Officer (South Asia) and CEO of Programmatic, Dentsu Aegis Network.
As it turns out, major digital platforms like Google and Facebook are said to have got back 70-80% of their ad revenues in June-July when compared to the same period last year. BFSI, OTT players, gaming entertainment players and edutech companies are leading the chart when it comes to performance marketing on digital medium.
According to Mehra, overall optimism in the market backed by the stock market performing pretty well is driving their clients to bring back their ad budget. “Plans that were parked out are being dished out and activated. While brand spends are always discretional, performance spends have come back almost entirely,” he said.
The digital advertising landscape changed in phases through the lockdown and unlock periods, say experts.
“Most campaigns across most sectors went on pause, so the ad spend data is limited. However, in lockdown1.0, we saw a significant drop in CPMs (cost per thousand) for those that didn't pause - almost 30% drop in some cases. These have gradually normalized to pre-lockdown levels. So Google now being back at 80% of revenues seems to actually be the case,” said Siddharth Devnani, Co-Founder & Director at full service agency SoCheers.
The ad spends of e-commerce players - both marketplaces and D2C brands - closely tracked the restrictions applicable to their respective sectors for courier and delivery and these were the first to bounce back. As of today, according to Devnani, barring a few related to events etc, most spenders are back - especially products like consumer durables and FMCG.
So, why is the advertising space being led by performance marketing?
“Today brands have become more prudent while defining a campaign, its objectives, the size and the budgets. While initially, brands continued to spend for visibility, with the pressure increasingly shifting towards revenue generation, the entire focus moved on to performance marketing which is purely ROI driven,” said Manish Solanki, Co-Founder & COO, TheSmallBigIdea.
Currently the biggest spenders belong to FMCG, e-commerce, OTT and insurance sectors. Given the nature of the situation, insurance players continued spending even in Q1 with a clear focus on ROI.
“Our partner clients from the entertainment and e-commerce sectors too are gradually increasing their ad spends with the sole objective of reach and top of mind recall along with a focus on ROAS,” Solanki said.

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