Uncertainty looms over summer marketing as several states go under lockdown
Categories and brands that have significant reliance on summers for their volumes will most likely be impacted by this second wave of Covid
When the year began, in a seemingly relaxed business environment after the tumultuous 2020, the Indian marketing and advertising industry was quite positive about its growth. Bets were high on the April-June quarter, with IPL and also summer brands amping up their marketing spends after most of them remained silent last year. However, as several states once again go into lockdowns and curfews, the industry is hazed in a cloud of doubt as to what this quarter will be shaped up like.
Wunderman Thompson, India SVP & National Planning Director Pinaki Bhattacharya says, “Categories and brands that have significant reliance on summers for their volumes, will most likely be impacted by this second wave of Covid. Though it is too early to predict the extent of the impact. To begin with, we still have no idea about the length or the depth of this second wave. Then, apart from dampening of sentiments, there is also the issue of disruptions in supply chains and how long it would take to restore them.”
Wavemaker India Chief Client Officer & Head – North & East Mansi Datta shares similar views as she says while the marketing sentiment was buoyant till March, there is a need to relook into the marketing spends with rising cases this month.
“Campaigns that have already started are extending themselves in April and everybody is following a 'wait and watch' approach to figure out the course of action. It all depends on the extent of lockdown imposed, the resultant consumer sentiment, employment status and the disposable income status and the availability linked with physical distribution or delivery,” she notes.
2020 saw a 65% degrowth in adex during the April-June quarter, as compared to the corresponding quarter in 2019. However, this year might not be as turbulent if Dentsu Impact Managing Partner Ajit Devraj is to be believed.
“If the lockdown persists and goes on for a similar duration as last year, which will be the absolute worst-case scenario, then we are expecting degrowth but still not as severely as last year because brands, consumers and agencies have embraced new strategies, processes and systems to deal with such scenarios and would be a lot more resilient this time around,” he highlights.
FoxyMoron National Head - Client Relationships Prachi Bali, in the same vein, notes that the brands are more optimistic than uncertain this year and have not started snipping their spends yet. But if the lockdown continues, the situation might shape up differently.
However, categories like personal, hygiene, health, entertainment, home improvement, financial wellbeing, etc., will continue witnessing good growth even if others are forced to cut their spending.
Datta points out, “The marketing budgets of brands do get altered with the lockdown. Demand for their categories drives investment decisions. A lot of Advertising: Sales related decisions come up with a firm eye on efficiency. Last-mile attributions, effectiveness considerations are made while figuring out budgetary adjustments. There are some categories that are enhancement oriented see growth and continue advertising at previous levels. While others do curtail their spends.”
Bhattacharya adds, “Consumer durables, one of the summer categories, have had a robust start this year and a lot of players had a good first quarter. Some categories such as air conditioners and refrigerators had already started their advertising for the season and had started seeing some uptick in volumes. While they will be impacted by micro-lockdowns and supply issues, they may still be able to tap into opportunities that are growing because of changing work styles and lifestyles.”
When it comes to the media, television and digital will be least impacted, with the latter expected to lead from the front, if the lockdown extends.
Devraj elaborates, “On-ground marketing initiatives such as outdoor, cinema, B2B events, channel partner meets, etc., will witness a slowdown, while TV and digital advertisements will register a high growth trajectory in most categories. TV advertising with a focus on new entertainment and infotainment avenues along with digital platforms is going to be a safe bet for brands in the near future.”
As per Bali, film elements will take the biggest hit in case the lockdown extends. “Shoots are happening but not on a big scale. I am sure if the lockdown extends with stricter protocols, several brands will manage shoots remotely, using influencers and Zoom, much like the last year. But digital activities will continue to thrive. Brands will have to connect directly with the customers. And as long as deliveries continue to happen, the spends will continue on the medium.”
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