Digital advertising sees an upsurge as brands turn to revenge spending during festivals
An estimated Rs 8,200-9,500 crore of ad monies are expected to be spent on the medium in the festive season, say industry experts
Advertisers are on a spending spree with an eye on the upcoming festive season and the revival in economic growth due to increased consumer spends. The ease in lockdown restrictions amid the drop in the number of Covid-19 infections and the ongoing vaccination drive in the country has helped the economy gain momentum.
The normalcy in the economy can be gauged from the fact that ad spending is back with a vengeance after a lull in April-May-June quarter. According to media professionals, advertisers are resorting to revenge spending since they have enough budgets at their disposal. Following the second wave, a lot of advertisers had decided to hold on to their ad budgets in anticipation of normalcy.
Digital industry is benefiting immensely due to revenge spending by advertisers. Video-led platforms, whether it is over the top (OTT) or short-video platforms, are seeing strong demand from advertisers for their ad inventory. The presence of high-impact properties on digital across sports and entertainment domains has only fuelled the rise in digital ad spends.
According to Rohan Chincholi, Head – Digital Services, India, Havas Media, the upcoming festive season will be huge for the digital media industry with an estimated Rs 8,200 – 9,500 crore worth of ad monies expected to be spent on the medium.
“This festive season might see an increase in ad spends, mainly because of the spending tapered down during the second wave of Covid-19. With an estimated 12% increase from last year, H2 could be in the range of Rs 8,200 – 9,500 crore on digital,” Rohan told exchange4media.
Automobile manufacturer Maruti Suzuki plans to increase its digital ad spends due to the shift in consumer behaviour. The company had spent a quarter of its ad budget on digital, which is expected to increase to 30% this year. Apart from digital, the company had spent 30-35% of its budget on TV with print, radio, and OOH accounting for the rest.
“I would expect print spends to come down a little in this period because tactical advertising is likely to be less. At the same time, TV and the digital percentage is expected to increase. We have expanded our digital spending this year, and the percentage will remain high and go even higher by the year-end,” Shashank Srivastava, Executive Director, Marketing & Sales, Maruti Suzuki.
Megha Ahuja, VP- Digital Media Planning, Carat India, noted that most of the brands have kept aside 25-30% of their marketing budgets for the festive season and are planning to spend significantly more than their festive spends last year. “According to industry estimates, brands are expected to spend Rs 4000-5000 crore on sporting properties on TV & Digital in the current scenario where ad demand is higher than the supply,” she added.
“While the pandemic did see a slow-down on various advertising mediums, digital is one such medium that has been growing exponentially through the last 18 months. With eCommerce driving higher consumption, especially among millennials and Gen Y, brands have been pivoting greater ad spends on to digital platforms and this is expected to get stronger with the festive season around the corner,” said Monaz Todywalla, CEO, PHD India.
“Economic indicators are seeing a positive consumer sentiment. It is an exciting period for brands as they gear up with their festive spending strategies. We’re seeing an increase in the digital mix, and growth in ad spends is expected to rise across categories this festive. As markets look to sail past the recovery curve and well into growth, even categories that took a hit during the pandemic are looking positively aligned with improved market sentiments.”
MX Player SVP and Head of Revenue Viraj Jit Singh said that the OTT platform has seen a surge in advertising since July. He expects the festive season to drive massive growth in ad revenue for OTT platforms. “The market is upbeat, and we are ready to offer what our clients require. We are working very hard on our content calendar and ad-tech. We will obviously see an upside because e-comm, auto, fashion, handset, consumer durables are going to come in and spend money on advertising,” he noted.
Apart from corporate advertisers, MX Player is also betting big on retail advertisers. The platform will service long-tail advertisers through a self-serve advertising platform, which will make it easier for small brands to advertise. “We are looking at long tail advertisers in non-metro markets who were earlier using traditional media and are now using OTT because we have both the width and depth. The self-serve ad platform will propel our revenue in the next 4 or 5 months,” Viraj Jit said.
A senior ad sales executive with a leading OTT platform said that there is huge demand for IPL as well as T20 World Cup and beyond that on the GEC business. “Video will be a big gainer from the upsurge in advertising, whether it is short-form or long-form. In the last 3-4 years, video is the fastest growing pie within digital. OTT platforms are seeing huge demand from advertisers. The demand on non-cricket inventory is also very high,” he stated.
According to a top official with an OTT platform, advertising is looking buoyant as both corporate and retail are bullish about spending on advertising. He also said that OTT platforms have lined up a massive slate of original content, which allows advertisers to reach out to an engaged audience. “Apart from inventory, OTT platforms also offer sponsorship and integration opportunities like live voting for audiences during reality shows besides gamification. Digital offers a lot more engagement opportunities,” the official said, on condition of anonymity.
Chincholi said that an estimated 12-15% growth can be witnessed on platforms like Google, Facebook, OTT, audio streaming and short-video platforms. E-Commerce platforms will additionally see an estimated 20% increase across direct & DSP buys, he added.
He also said that video will grab a large share of the digital ad spends due to consumption growth even as search continues to be an advertiser’s favourite due to its impact on branded query searches (BQS) which results in better performance results. The legacy display inventory with the famous static ad formats will help in remarketing at a palatable cost per reach for brands, he stated.
“As the intent is limited - search will not have maximum share, but will continue to be the advertiser's favourite. The search strategy is not only limited to Google but also includes Amazon, Bing & others,” he said. “Video will command the highest share of 55%+ with ads across YouTube, OTT, Social & connected TV. This is because the audience consumption/reach/build-up is faster.”
The share of audio platforms in the digital ad pie is increasing due to growth in listenership. “With an average listener consuming at least 2+hrs on audio-only formats, it is slowly making its way and gaining share in the digital ad spends pie. As consumers start coming out of their homes and the markets start re-opening, this format will pick up. Programmatic audio looks promising,” he added.
Monaz said that categories like OTT, search and video are expected to do well during the festive season. "Now more than ever, digital has become an integral part of our daily lives. Stay-at-home has changed viewability trends with an accelerated market for AVoD and SVoD. In 2020 alone, the Indian digital segment grew by 35 per cent due to an upsurge in paid subscriber base across all OTT platforms. That said, categories like OTT, search, video are expected to do well. For brands and marketers, this presents a stronger opportunity to explore a full-funnel brand strategy to set themselves up for success – one that looks beyond social media and explore consumer touchpoints like online TV, video and more."
Rashmi Sehgal, SVP, Zenith, feels that the video and social platforms will gain significant marketing dollars followed by Audio and Display. “While we are a video first nation, consumers also have latched on to the popularity of short format social-video apps like Sharechat, Moj, etc. Thus, Video and social platforms will gain significant marketing dollars with new advertisers adding on. This will be followed by Audio and Display,” she noted.
Ahuja stated that the audience has started spending more time on streaming video platforms like YouTube, Hotstar and Amazon Prime and are consuming local language content. Video streaming, she said, has penetrated into the small metros and towns in India.
“The highest proportion of spends on digital is contributed by social media (29%, Rs. 4,596 crore). This is followed very closely by online video (28%, Rs. 4,366 crore), and paid search (24%, Rs. 3,725 crore). Spends on display banners stand at 16% (Rs. 2,528 crore),” she added.
Key advertising categories on digital
According to Chincholi, BFSI, E-commerce & Auto categories continue to spend more and have a higher SOE (Share of Expenditure). However, the growth is expected from D2C (Direct to consumer) brands, as many are opting for a digital-first approach to drive awareness and customer acquisitions.
The ease in lockdown restrictions has opened up categories like travel and hospitality which weren’t spending during the pandemic period, he noted.
Sehgal said that the obvious players like FMCG, Auto, Retail and such will continue to drive spending upwards. “Plus, categories which have got a boost post pandemic, like ecommerce, are going to see a battle between the large players during the Diwali sale events. Travel & Hospitality will see a resurgence, with travel regulations and ban lifts,” she noted.
E-commerce makes the highest contribution to the digital media ads spends industry, followed by consumer durables, FMCG and Telecom, said Ahuja.
Viraj Jit said that certain categories like EdTech, fintech, gaming, cryptocurrency, and M&E have started using OTT platforms frequently for advertising. He also said that traditional advertisers like FMCG, consumer durables, etc are also looking at OTT platforms seriously.
Digital is primary advertising vehicle
There is a consensus that digital is and has been a primary medium for many advertisers, considering the reach and performance that it delivers. In fact, it will be the key medium for digital-first brands and consumer tech companies.
“For start-ups and digital-first brands – digital will continue to be the lead medium in the initial years. These are mainly brands that have not invested in mainline mediums yet, & are largely focused on increasing sign-ups, installs, subscribers, sales, etc., given there are over 500 mn Indians using smartphones today & 60% of them are transacting audience,” Chincholi noted.
He also said that digital’s effective reach is better than mainline as it aims to highly focus on affinity, interest & in-market segments. Mainline media compliments digital with connections at scale & its relative impact on online performance, he added.
Sehgal stated that digital is no longer a secondary vehicle as time spent has increased on mobile, Connected TV’s, and Online Shopping. This has made it imperative for brands to rethink and plan end to end digital first journey for brands. The second reason, she said, is that the pandemic has re-enforced the agility and data driven marketing decisioning that can be enabled on Digital platforms, making budget work harder.
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