‘Closer the game, higher the viewership: Atit Mehta, Byju’s

Atit Mehta, Marketing Head, Byju’s shares how the learning app has leveraged cricket to derive greater ROI

e4m by Christina Moniz
Published: Sep 4, 2018 12:40 PM  | 3 min read

When cricket is mentioned it’s no surprise that most brands rush to it to create an impact and recall value associated with the sport. Several brands have actually launched themselves on the back of cricket tournaments, and some have even seen a huge growth and recall with cricket-centric campaigns.

With Asia Cup around the corner (scheduled on September 15) there is a prospect of arch rivals India and Pakistan taking on one another on the pitch. We talk to Atit Mehta, Marketing Head, Byju’s, to get his perspective on marketing and advertising during cricket tournaments.

Read on to know his advice on how brands can get maximum ROI and guaranteed eyeballs from a cricketing association, and Byju’s latest cricket-based campaigns:

How impactful is cricket as a vehicle for brand building?

For the past couple of decades, cricket has played a critical role in brand building. There have been so many brands and so many examples where brands were actually launched on the back of cricket and today these have a strong equity among consumers.

Take us through some of your recent cricket-based campaigns. How have they worked out for Byju’s?

For Byju’s, we have participated in almost all the cricket series that have taken place in the last three years, whether they are bilateral series or multi-national series. Our first TV campaign was launched during a bilateral series, our current campaign was also rolled out during an ICC cricket tournament and hopefully we will be able to roll out some of our future campaigns on the back of cricket tournaments as well.

What can brands do to derive greater ROI from cricket campaigns?

If a brand believes that the potential ROI on spends during a cricket tournament will be good, then they should definitely associate with such intense, popular tournaments. Once the investment is done, they should just sit back and enjoy the game. However, I should add that the brand owner must pray and hope that India does well and that the games are a last-ball finish. The closer the game, higher the viewership will be!

How can brands leverage India-Pakistan rivalry to its maximum?

Historically, the India-Pakistan cricket matches have always had the entire national audience glued to their television screens. For a brand that is interested in reaching out to a mass audience, India-Pakistan games are the best opportunity.

Your favourite India – Pakistan moment?

There are two moments that come to mind.
1. During the 2003 ICC World Cup in South Africa, the sixes that Sachin Tendulkar and Virender Sehwag hit off Shoiab Akhtar were fantastic
2. The first T20 World Cup where India and Pakistan were faced with a bowl out was the other memorable encounter. India won that game 3-0

Do you think the standard of cricket has improved among Asian countries?

The standard of cricket among all the Asian teams has definitely improved significantly. While India, Pakistan and Sri Lanka remain the Asian power houses, Bangladesh are no longer the minnows of Asian cricket. They have grown over the last 6-7 years and cannot be taken for granted any more. Even Afghanistan is growing as a cricketing nation and the fact that they have qualified for the ICC World Cup 2019 is testament to that fact.

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In next 5 years, digital transition in the payment space will be revolutionary: Panel

At the launch of Dentsu-e4m Digital Advertising Report 2023, industry experts discussed customer expectations in the new digital economy

By exchange4media Staff | Feb 7, 2023 3:27 PM   |   3 min read

dentsu

At the launch of Dentsu-e4m Digital Advertising Report 2023, industry experts discussed customer expectations in the new digital economy, those of the Web3 consumer, and the ways brands can meet them to create value in the new digital economy. The panel was moderated by Anita Kotwani, CEO, Carat India; Sachin Shukla, Marketing Head, ICICI Bank; Shoorveer Shekhawat, Head of Marketing, Video Banking & TFx Initiatives, AU Small Finance Bank; and Amit Deshmukh, Business Head, NMIMS Global.

Speaking on the evolution of technology from the perspective of business, Shekhawat said, “During the 90s or 2000s, at that time I believe Yahoo could have easily bought down Google because it was two doors away in one of the garages next to their office. That would have been great if they would have thought of Google as tough competition.”

Speaking from an India-centric perspective, he said, “The mobile penetration has grown very rapidly and today I think they'll be hardly any household without a smartphone. I think we are the cheapest in the world in terms of data plans with 5G. Monetization is an important story around using this technology. Talking about 3.0, I am sure that today brands or organizations are on the corporate side, and we are more open to accepting it.”  

He spoke about the consumers becoming more digitally savvy and said that trust is one of the key challenges in the sector as there are many frauds. He went on to say how Blockchain as technology is helping brands to create a safer environment for digital transactions. He also spoke about AI being a helping hand to professionals for communicating well with different parties.

When asked about a decentralized world in web 3.0 and how it will work out for consumer experience, Deshmukh said that when it comes to these technologies there are a few customer expectations from brands. He said that Data Security and Personalisation are some of the primary aspects that come to his mind.

Speaking on the BSFI sector, Shukla spoke about how the BFSI sector was evolving with the new payment technologies and how it was becoming convenient for consumers to get what they need without standing in queues, in the comfort of their homes. He said, “You could book an IRCTC ticket and not stand in the reservation centre.” He went on to say how the metaverse is creating a space for consumers to experience products and services at their convenience.

On a similar note, Shekhawat spoke about how UPI will revolutionize the payments space and physical cards are going to be a thing of the past. He said, “The digital transition will happen over a period of time, it is going to change in the next five years, because of the penetration of the technologies, mobile phones, and the 5G supporting it. The change is happening in parallel between all the ecosystem players on the payment side and the geo-economic situations, with the younger population becoming the earning population, in the next five years. I personally believe it's going to be revolutionary.”

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Vikas Khanna is wowed by Del Monte's Michelin Star-level mayo in new campaign

Khanna will promote the brand's mayo & ketchup range

By exchange4media Staff | Feb 7, 2023 2:01 PM   |   2 min read

vikas khanna

Del Monte, a prominent brand in the Ketchup & sauces space, has tied up with Michelin Star awarded chef and MasterChef India judge Vikas Khanna to promote their Mayo & Ketchup range. Vikas stars in Del Monte’s latest communication campaign – Made by Chefs, Loved by all- for its Mayonnaise range, showcasing the great taste, variety and quality of Del Monte’s mayo range and the reason behind same - the fact that they are made by top in-house chefs using top quality ingredients.

Speaking about this partnership, Del Monte India CEO Mahesh Kanchan said "We are delighted to have Chef Vikas Khanna partner with us on our culinary portfolio of Mayonnaise, Ketchup & Sauces. I say this not only because Vikas is one of the most respected and reputed chefs globally , but also because he is extremely careful about the brands he chooses to work with. For us it is a match made in heaven with him endorsing one of India’s top quality food brands.

We believe his association will help increase our awareness amongst consumers and encourage them to choose from the best mayonnaise range available in the market and help us eventually be the first choice in terms of a mayonnaise brand.”

Vikas Khanna, who is delighted to be a part of this campaign said "Del Monte is an international brand, well known for the quality of its products and I am glad to be associated with it. As a chef, while we make our own mayonnaise in our restaurant, I have to say that Del Monte makes a fantastic eggless mayo and amongst all their delicious mayo variants that I have tried, Achari Mayo is my personal favourite.”

‘I am impressed with the quality of Del Monte’s products and they are at par with international standards’, Vikas added.

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MyTeam11 onboards Shikhar Dhawan as brand ambassador

With Dhawan, the brand hopes to attract more sports enthusiasts to the platform

By exchange4media Staff | Feb 7, 2023 1:31 PM   |   2 min read

dhawan

MyTeam11 has appointed cricketer Shikhar Dhawan as their new brand ambassador.

With Dhawan, the brand hopes to attract more sports enthusiasts to the platform. The newly appointed skipper of the IPL franchise Punjab Kings will soon appear in a series of promotional campaigns for MyTeam11, this year.

Expressing his excitement about the partnership, Dhawan said, "MyTeam11 empowers the fans to be a part of the on-field action and put their knowledge of sports to test. It allows the fans to step in the shoes of a captain and make decisions which help their team to win. I am thrilled to associate with MyTeam11, a brand which takes fan engagement to a whole new level and makes the fans more connected to the game."

While commenting on the decision to rope Dhawan as the brand ambassador, Vinit Godara, Co-founder and CEO of MyTeam11 said, "We are extremely delighted to have Shikhar on board as our brand ambassador. Over the years, Shikhar has been a consistent performer in international cricket for India and is admired throughout the nation. His ability to fearlessly face the toughest situations and lead as the anchor resonates with our brand's core values. He also enjoys a high level of popularity & credibility in the cricket community which is consistent with the brand's goal of becoming the most reputable and trustworthy homegrown fantasy sports app in India. With his addition to our team, we hope to further spark the growth of our brand in India.”

Speaking on the versatility of MyTeam11 being the pioneers of fantasy gaming for multiple sports on their platforms, Shikhar said, “Just not cricket, I was an active participant in football and volleyball during my younger years. So, I can connect with the vision of MyTeam11 as it’s a multi-sport fantasy destination for users.”

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Aditya Birla Health Insurance pushes for 10,000 steps a day in new campaign

Dentsu Creative India has conceptualised the campaign

By exchange4media Staff | Feb 7, 2023 1:11 PM   |   3 min read

Aditya Birla

Aditya Birla Health Insurance (ABHI), in association with DENTSU CREATIVE India, has launched its latest campaign. The campaign highlights the perks of taking 10,000 steps every day and encourages individuals to adopt a healthy and active lifestyle. 

It is pertinent to note here that ABHI is the fastest-growing health insurance company in India. As a health partner, they don’t just ‘insure health expenses’, but actively engage with people to ‘ensure good health’. It rewards you for your good health with up to 100% Premium back as HealthReturns™ and provides you with support at every stage – with guidance on nutrition, fitness, and lifestyle. This insurance offers a host of additional benefits such as a 94% claim settlement ratio and a 10,500+ hospital network with seamless hospitalisation benefits. 

The film showcases real-life individuals who have embraced the habit of walking 10,000 steps daily, highlighting the transformative impact it has had on their lives, both physically and mentally. Through inspiring and relatable stories, the campaign encourages and motivates individuals to lead an active and healthy lifestyle. The film is on air on television and is supported by a series of shorter static and video content on digital platforms, featuring even more inspiring stories of transformation and positive change. 

Speaking on the campaign, Darshana Shah, Head-Marketing & CX, Aditya Birla Capital said, “As brand Aditya Birla Capital, we have always believed in simplifying money needs and focused on real people and real stories. So, when we were planning our ABHI brand campaign, we wanted our positioning of focusing on ‘Health First’ in Health Insurance to come to life through our own customers’ stories of how they have achieved the best version of themselves by walking 10000 steps daily. We also want to showcase how ABHI is empowering their customers to do so through their entire health and wellness ecosystem at their fingertips through the Active Health Mobile App. Today we have 1600+ customers who earn up to 100% of HealthReturns™ and this film is to create awareness and nudge more to join and start their Health Journey.” 

Talking about the inspiration behind the campaign, Aalap Desai, CCO, Creative Experience, West, DENTSU CREATIVE India added, “We were awed by the product itself and then to hear real stories of ABHI consumers who have had a transformation by walking 10,000 steps daily was truly amazing. We instantly knew that the campaign needs to showcase real people and their stories. We hit upon a very simple idea of when you keep moving forward, you leave something behind and what worked best in this film is the simplicity of storytelling. Sudip da, the director of the film sprinkled his magic dust adding delightful dimensions and textures to the story, the characters, and their performances. This has been a great start of the year for DENTSU CREATIVE India and will motivate us to do even better in the coming time.”

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Affle India Q3FY23 results: Lower international revenue plays spoilsport: Elara Capital

As per Elara Capital, there is no significant margin improvement unless overall revenue growth comes in the range of 25-30%

By exchange4media Staff | Feb 7, 2023 12:58 PM   |   7 min read

Affle

Elara Capital has released a report on Affle India's financial results. 

Here's what the report states:

 

Sharp decline in developed nations has played spoilsport

Affle India (AFFLE IN) reported revenue of INR 3,761mn in Q3FY23, a growth of 6.1% QoQ/10.8% YoY. 9MFY23 revenue was INR 10,781mn, up 40.6% YoY, whereas 9MFY23 organic growth was 24.2% YoY. In Q3, revenue from India wasINR 1,297mn (34.5% of revenue, up 14.0% QoQ and 22.1% YoY), with international revenue at INR 2,463mn (65.5% of revenue, up 2.3% QoQ/5.6% YoY). Enterprise platform revenue stood at INR 16mn (0.4% of revenue, down 36.8% QoQ/48.6% YoY) and consumer platform revenue INR 3,745mn (99.6% of revenue, up 6.4% QoQ/11.3% YoY).

Consistent margin improvement, key to driving upgrades

AFFLE has reported a muted growth quarter as developed nations played spoilsport (21% YoY dip, as per our assessment). But traction in emerging nations/India business (strong double-digit growth) was helped by increased penetration opportunity, despite ad budget cut by new age/commerce companies, as estimated. We continue to believe that players such as AFFLE that rely more on CPCU model have the potential to outperform on growth, as marketers focus more on ROI led campaigns. New customer acquisitions are larger revenue contributors in AFFLE’s CPCU segments, as repeat user/conversion will pick pace, medium term. We believe emerging nations will recover faster on digital advertising growth versus developed nations that may take ~12-14 months to recover lost ground. This in turn augurs well for AFFL as it derives 80% of its revenue from emerging nations. The management continues to focus on higher profitability, led by: 1) quality conversions and 2) stable pricing, despite an uncertain macro environment.

EBITDA margin up 142bp YoY to 21.4%

Q3 EBITDA stood at INR 803mn, up 13.5% QoQ and 18.7% YoY, led by revenue growth, though partially offset by increase in data and inventory cost (up 3.7% QoQ and 5.9% YoY), increase in employee cost (up 3.9% QoQ and 30.3% YoY) and increase in other expenses (up 11.4% QoQ and 0.3% YoY). Although data and inventory cost, as percentage of revenue, decreased 138bp QoQ/280bp YoY (60.7% of Q3FY23 revenue), EBITDA margin was 21.4%, up 140bp QoQ/142bp YoY. Q3 PAT was at INR 691mn, up 17.2% QoQ/11.0% YoY, led by operating leverage and increase in other income (up 28.6% QoQ/14.2% YoY), partially offset by increase in D&A cost (up 3.8% QoQ/37.2% YoY), rise in finance cost (up 10.6% QoQ/68.8% YoY) and increase in income tax (up 26.1% QoQ/35.7% YoY). Q3 CPCU revenue was at INR 3,454mn, up 4.9% QoQ/14.0% YoY. Converted users reached an all-time high of 67.8mn (up 4.8% QoQ, 15.9% YoY) in Q3. CPCU rate was the same QoQ at INR 51. Non CPCU consumer platform revenue was INR 291mn, up 28.0% QoQ but down 12.7% YoY. Despite global headwinds, top industry verticals for the company continued to be resilient, helping it register robust growth anchored on CPCU business model and disciplined focus – Higher profitability with significant margin expansion both QoQ/YoY.

Affle India – Q3FY23 conference call

▪ Affle saw robust growth in nine months and the highest CPCU revenue and conversions. CPCU business is resilient and has long-term business momentum. Strong focus on emerging markets enabled good performance.

▪ Macro headwinds can be a setback, especially in the US and Europe.

▪ Affle is actively evaluating inorganic growth opportunities as well and is looking at high-growth, sustainable volume expansion. Affle seeks inorganic growth without compromising on margin/profitability.

▪ Except for developed markets, global emerging markets were resilient.

▪ Affle has an extremely prudent customer profile and is well diversified on markets/customers. It is confident of long-term business prospects.

▪ Developed market contribution is smaller for Affle. There are headwinds in the markets but there are fewer customers too. Some have held budgets due to macroeconomic headwinds. FY24 outlook is positive. From an internal perspective, certain areas could be calibrated to increase revenues in developed markets. In the next couple of quarters, Affle may turn around developed market revenues.

▪ Affle is focusing on margin expansion, profitability, and quality conversions and not volumes. It was able to hold ground/pricing, which has reflected in margin as well.

▪ CPCU business is bulk of the total business and is resilient. It is ROI-led and verticalized for the advertisers. Affle has been maximizing its strengths. And the non CPCU business is good for maximizing margin going forward. There are many opportunities, and they continue to be long-term.

▪ In terms of growth mix, India market is expected to grow 23% (other global emerging markets in the same range as well) – 80% of the business is from emerging markets, including India. The focus has been on bottom line/margins this quarter. Resilient long-term growth is at 25%+. In the developed markets, there is a contraction given the small customer base that is holding budgets and activities. The addressable market in developed markets is still large, with better execution strategy that may help win customers. Expect good results in the next couple of quarters.

▪ Overall margins have improved because of highermargin CPCU business (also on revenue quality). The conscious strategy was to grow the margin in Q3.

▪ Affle is a fast-growing company, and its capital allocation strategy is as follows. The company mentioned earlier that it will not provide dividends for the first five years and will focus on growth. ▪ Affle is not pushing for topline maximization but is focusing on revenue. It is seeking CPCU projects with higher margins.

▪ Affle expects Q4FY23 revenue to be similar to Q3FY23 revenue

▪ In terms of India and emerging markets, competitive moat is strong. Affle will deliver similar or better growth in FY23 compared with FY22.

▪ CPCU pricing is better in other emerging markets than in India. Affle is ensuring pricing with delivering meaningful growth across emerging markets.

▪ Regarding Google Play policy for India, Affle thinks it is important for the industry to have a fair playing field especially when there are players who can have disproportionate control. The company feels that it is important to have balancing factors coming in it is happy to see Indian ecosystem moving towards that. Affle was able to negotiate growth well before the policy and it hopes that it will continue post the policy as well. Affle India 4 Elara Securities (India) Private Limited

▪ Affle is also focusing on important operators and OEM partnerships in the ecosystem.

▪ Emphasis is on new user/repeat customer acquisition. Demand from advertisers is always to acquire the next 100-200mn users. Affle is seeking more market share expansion. Many large traditional conglomerates are going to focus on digital. Even larger established digital companies with developed technologies need digital advertising while expanding in emerging markets. Expect large budgets from traditional companies. The margins for new and repeat user conversion are almost the same. In developed markets, there is an opportunity to drive repeat user conversion.

▪ As per Affle’s business model, its products work in all the scenarios. Technology stack is allowing deeper and wider access. Advertisers are focused more on profitability and ROI, hence are more cautious about spending advertising budgets.

▪ India is contributing ~35% to revenues, with other emerging markets at 45% and developed markets contributing the rest 20%. Hence, India and emerging market form 80% of revenue and Affle is delivering consistent growth in that segment.

▪ With margin expansion and pricing being defended, the outcome is positive.

▪ Data and inventory as % of decreased as Affle was able to command more meaningful pricing w.r.t CPCU rates and also due to better efficiency. The goal is to consistently seek overall margin expansion.

▪ M&A: Affle will find value-led appropriate transaction to compliment itself. Transactions would be in similar proportion and scale to Affle.

 ▪ Expect data and the inventory cost (traffic acquisition cost + data processing) in the range of 60-65% of revenues. International revenue (developed markets) declined ~21% YoY due to macroeconomic headwinds.

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Social media has become a reach-based platform selling stories: Shubhranshu Singh

Singh, Vice President - Marketing -Domestic & IB at Tata Motors, speaks about the company’s latest campaign and their marketing strategy

By Tanzila Shaikh | Feb 7, 2023 9:25 AM   |   4 min read

shubranshu singh

Tata Motors recently released their latest campaign for Tata Motors trucks, ‘Desh Ke Trucks’. Using humour as the main element, the films talk about the various technologies that the vehicle company is bringing out. Four of the five films launched under the campaign has characters from popular web series Panchayat.

Talking about the insights behind using the characters of the series, Shubhranshu Singh, Vice President - Marketing -Domestic & IB at Tata Motors, said, “The Panchayat jodi was loved by the audience when they launched a similar campaign in September 2022, and so we are banking on the same characters to woo the audience this time too.” 

When asked about the importance of the digital medium for creating a buzz for the brand, Singh mentioned, “You’ll be surprised to know how many people have time for internet-mediated content vs TV advertising. Overwhelming proportion of people are mobile-first, seeing all the content through different channels. Across the country, you’ll see a host of apps for regional and local consumption as well as Facebook, YouTube, Instagram. The reality is changing very fast.” 

Talking specifically about influencer marketing, Singh shared, “When it comes to influencer marketing, we do it in parts. Part of it is done through corporate communication. We are choosing micro and nano influencers. We found that the micro and nano influencers have much more engagement with their followers. We have tied up with an agency. The budget is in low thousands average bases. It is quite affordable compared to any other form of advertising.”

While influencer and advertising-led content is something that every company does, some brands these days are also investing on content surrounding the brand. Speaking on the same, Singh said, “Yes, we are open to that idea. But is there anything that we are going to inaugurate tomorrow, no.”

“From a media point of view, there is no doubt that this cable-cutting thing is an endemic and everything is shifting to digital. But in online, not everything is fetching the same returns. Creating content requires heavy investments, but returns are less.”

When it comes to reaching out to consumers, WhatsApp also has become an effective way to reach consumers. Talking about it, Singh shared, “It is quite fascinating to see what many brands are doing using WhatsApp. There is no doubt that communication is happening through platforms like WhatsApp. Social media has become a reach-based platform selling stories and there is a lot of engagement happening on platforms like WhatsApp. We are there on WhatsApp, as our consumers use it.”

“But I think it is less about content and more about transaction. They aren’t creating any content on WhatsApp. We are in touch with Meta to create a business application. There is also a possibility of business chatbot. The problem with channel building is that putting the pipe is easy but being consistent to put content is tough.”

Speaking about their plans to make the most of the digital channels, Singh said, “We are going to go ahead with the second set of campaign from February on digital. Also our lead generation has shifted to digital. In the last one year, we have started doing programmatic advertising, both search-originated as well as on social platforms to campaign pages. We are also working with affiliation aggregators. I am happy to report that we are at double digits in terms of contribution of digital sales to overall sales.”

The ‘Desh ke Trucks’ campaign has been conceptualised and executed by the in-house team of the company along with creative agency Black or White Brand Communication Pvt. Ltd. the teams also spoke about why Panchayat characters were taken in the campaigns, they said, “What we learnt from the first set of campaign, is that humour is really working and we wanted to take this technology communication through them.”

              

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Will funding winter freeze start-up ad spending in 2023?

Most of these brands have already started to cut their marketing budgets. According to TAM Media data, the indexed avg volume growth for new-age advertisers on TV fell by 11% in 2022 through October

By Sonam Saini | Feb 7, 2023 8:57 AM   |   5 min read

funding winter

The outbreak of the Covid-19 pandemic in 2019 brought consumers online and categories such as edutech, fintech, crypto, e-gaming and e-commerce benefited greatly. As a result, some of these brands emerged as prominent advertisers in the last two years. But with start-up funding in India falling to a two-year low in the third quarter of CY22, media planners believe that brands in these categories are unlikely to spend significantly in FY 23. In fact, many advertisers have already begun to reduce budgets, say experts.

Ad spends in last three fiscal

2022 was a difficult year for start-ups and new-age businesses, with many of them reporting huge losses. However, despite the setbacks, many of them spent large sums of money on advertising in FY 21-22. In fact, ad spends for majority of these brands more than doubled in the last three fiscal years. According to Pitch Madison Advertising Report 2022, in 2021, 15 new-age companies/start-ups, including Dream 11, Byju’s, Phonepe, Upstox, My 11 Circle, CRED, Unacademy and Swiggy, entered the list of top 50 advertisers.

For example, upGrad's marketing and advertising expenditures increased three times in the last three fiscals to Rs 393.68 crore in FY21-22 from Rs 95 crore in FY19-20. Similarly, Unacademy’s ad spends rose by 359.86% to Rs 519.64 crore in FY 21-22 from Rs 113 crore in FY19-20. For Phonepe, marketing and advertising expenditures declined 14.85% to Rs 866 crore in FY21-22 from Rs 1017 crore in FY 19-20. However, it increased by 61.87% to Rs 866 crore in FY21-22 from Rs 535 crore in FY20-21. 

According to Ankit Khirwal, Head of Marketing, upGrad, in 2022, the brand launched new sub-brands and new products, made acquisitions and tapped into new markets etc, and this  added to the company's overall marketing spends. “This growth momentum and marketing drive will continue in 2023 and we are likely to increase the spends by 40%,” said Khirwal. 

He shared that in 2022, upGrad’s digital media expenditure rose by 20%. “Our core TG is working professionals, typically in the age group of 21-35 years, who spend a lot of time on YouTube, social media, and other digital platforms. So, majority of our marketing budget was spent on this category, followed by performance marketing expenditures on Google search, which helped us reach the audience with the highest intent. Between March and December 2022, our marketing spends on television was marginal,” added Khirwal.

So, is it necessary for brands to spend such huge amounts on marketing even though they are incurring losses? 

Explains Ramsai Panchapakesan, SVP & National Head-Media Buying at Zenith, “The word ‘huge’ is highly subjective. Marketing expenditure is always proportional to sales revenue.”

“When a start-up begins its journey, it will invest and look for returns, which means that the marketing budget will be divided into two components. A certain percentage, which they refer to as investment, will continue to decrease. The skill marketing, where the return has been focused, which is similar to performance, will continue to increase depending on market responses and expanding audience size. So that requires additional money to keep doing it,” he said further.

A senior media planner, on the condition of anonymity, shared the possible reason for this continued spending on marketing by the start-ups. “One of the reasons for the increase in spending was that many of the companies, which were experiencing organic growth during Covid, began to see this growth flatten. As a result, significant spending was required to maintain the same level of growth,” he opined.


Impact on FY23 

Most of the advertisers have already started to cut their marketing budgets. According to TAM Media data, the indexed average volume growth for new-age advertisers/start-ups on TV fell by 11% in 2022 through October compared to 2021. While the majority of these new- age businesses prefer television as a medium for advertising, others experiment with marketing outreaches.

According to the media planner, ad spending from these new-age categories has declined in the second half of the year 2022. “There might be year-by-year growth, but in 2023, we don't see many of them increasing their ad spends. We are seeing most of them pulling out from big properties like IPL,” he suggested. 

The planner further added, “2023 is expected to be a slow year. It will be best if they can maintain ad spends level of 2022. Otherwise it will be a decline.” 

Panchapakesanhe predicted that spending will be almost similar to last year. "The investments were at peak last year and this is specific to the existing start-up companies. They all have now started focusing on performance. So, for every dollar that they spend on marketing, they are seeking a return. As a result, the marketing budget will be on a tightrope, with the emphasis entirely on performance.”



What can brands do?


Dinesh Singh Rathore, CEO of Madison Omega, suggested that these companies will have to determine their strengths, areas of acceptance, and what works for them. “They need to find out which part of the investment provides the best return on investment?”

"Investments in performance vs. branding cannot be done simultaneously. There must be a fine balance, and one cannot chase only performance," he explained.

Experts say it's difficult to predict how long the funding slowdown will last, but businesses are being cautious and have cut back on spending.

"The strategy being followed by most of these companies is to reduce anything that increases the burn, which means a reduction in top-of-funnel awareness campaigns and a focus on performance campaigns," said an industry observer.



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