Digital expected to attract 40% of overall AdEx this festive season

Part of this shift towards digital is led by the marketer mindset of getting maximum bang for the buck, and digital allows just that

e4m by Ruhail Amin
Updated: Oct 9, 2020 9:09 AM

The last six months have been a boon for the digital medium. The digital advertising pie, which witnessed a 26 per cent jump in revenue in 2019, is close to witness 40 to 50 per cent jump in revenues in 2020.

At the beginning of this pandemic, when the print went out of circulation for sometime and GECs stopped producing fresh programming, the entire focus shifted to news channels and digital platforms. Across categories, when there was a sharp dip of 20-40 per cent in business, news channels and digital were the only platforms that continued to attract advertisers.

Now, it has been over six months into the pandemic, and much has changed as far as customer behaviour and brand spends are concerned. To begin with, the dependence on digital has become bigger than ever.

According to marketing experts, this festive quarter is likely to bring most of the categories back into the business. Moreover, the festive season will see most categories capitalize on the pent-up demand and advertise.

According to Pawan Sarda, Group Head, Digital Marketing & E-commerce at Future Group, “Right now, for brands, there are limited choices. So dependency on digital will be higher and I think everyone is focusing on conversion at this point in time. But from a market point of view, I feel, digital will surely move to 40 pr cent of overall marketing spends. Focus on digital is surely high this year.”

Changing landscape of ad spends

While television and print used to take the largest share of media spends at 70 per cent aggregate, digital overtook print in 2019 and is now closing in to overtake TV by 2021.

Part of this shift towards digital is also led by the marketer mindset of getting maximum bang for the buck, and digital just allows it. Also, market dynamics have changed; digital media, content and data analytics have gained importance like never before.

Explains Shradha Agarwal, Co- Founder and COO of Grapes Digital Pvt. Ltd, “As per a survey, about 51 per cent of consumers doing festive shopping this year will use e-commerce sites and apps as their primary channel. If the number is so big, digital will be at least 40 per cent of the overall ad spends which was only 30 per cent till last year. Last year, the total ad spend during festive season was approx Rs 2500 crore. This number looks very positive for digital agencies. This is further fueled by IPL moving to September and October, further adding to the festive season spends. In Grapes, we have seen a huge jump, where all brands have gone really active with their campaigns running right along festive season.”

And the reason is convincing. If we look at the Pitch Madison Advertising Mid-Year Report (PMAR) 2020, it clearly points out to the resilience of the medium.

According to the report, digital suffered a minor contraction of 7 per cent, even as all other mediums suffered a drop of 40-55 per cent during the pandemic. It has also turned to be the only medium to grow by 16 per cent in Q1 2020 when all others registered a double-digit drop. In absolute terms, digital AdEx in H1 ’20 stood at Rs 6,472 crore, commanding a 30 per cent share of the AdEx.

Advertisement spends appear to be recovering, and with a strong festive quarter expected in Q3FY21, there is likely to be a quicker recovery

Speaking about the digital outlook this festive season, Prajakta Desphpande, Sr Manager, Digital Marketing, Raymond Ltd adds, “I will say the spending will be higher than previous years. About 25 per cent more is my estimation. But more than spends from specific advertiser being higher, overall, at an industry level, digital advertising will see significant increase because advertisers who were never on digital or hardly present, will be see advertising, adding to the overall volumes. Also, small entrepreneurs are big time on the rise. They will also advertise as their local avenues of direct B2C business like seasonal exhibitions etc are down this year."

Gauri Awasthi, Co-Founder & Director, DIGITAL EDIFY- the Digital Transformation Business Unit (DTBU), and former Head of Digital Marketing Fab India, says that the growth of the advertising industry has always been in precedent to the consumer buying behaviour and their mutual brand sentiments and about 45-60 per cent of the annual ad spends in India happen between Raksha Bandhan and New Year.

“These six months of festivity primarily is a make or break situation for any brand. But this year precisely, when ad revenue had reached as low as 60 per cent in April, a lot of hopes are banking on the festive season for industry’s overall revival. So I strongly feel that the second half of this year would see some upliftment in the advertising market, but this means a clear dip of 20-25% in the digital advertising budgets if compared with last year’s festive digital spends. Digital is going to be the biggest chunk in the pie seeing spends largely on digital platforms like Instagram Shop, Google search + GDN, Facebook & Youtube along with OTT platforms. Due to the pandemic, TV, Digital, OTT, Netflix, Hotstar, Online Gaming, Music Streaming have been the successful winners in the rat race so far,” said Awasthi.

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