What does the ad industry expect from the Finance Minister's speech?
Prime Minister Modi mentioned that details of the economic package will be given by Finance Minister Nirmala Sitharaman and has also assured that the benefit will cover all sections
After Prime Minister Narendra Modi announced an economic package of Rs 20 lakh crore on Tuesday to help the country weather the economic challenges posed by the Coronavirus crisis, the Finance Minister's speech on Wednesday is expected to bring in a breather for the industry.
In his speech, Prime Minister Modi mentioned that details of the economic package will be given by Finance Minister Nirmala Sitharaman and also assured that the benefit will cover all sections. If certain businesses are given relaxation in lockdown 4.0, it can not only bump up their sales but also lead to advertising finally gaining some momentum. What are the industries that could lead to growth in advertising if their sales open up?
As per the Pitch Madison Advertising Report 2020, FMCG, Telecom, Auto, eCommerce, HH Durables, Real Estate & Home Improvement, Clothing Fashion Jewellery, BFSI, Corporate and Travel & Tourism were the top advertisers for TV.
Any relief given to these sectors could thus lead to growth in advertising spends from them. eCommerce, for instance, is now only accessible by people in orange zones and mostly for essentials. If these rules are given slightest relaxation it can open up their communication channel and their spends on TV could see a favourable growth.
Similarly, FMCG, Auto, Education, Real Estate and Retail that were the main cash cows and contributed almost 50% to Print Adex in 2019 are all expecting relaxations in order to slowly get back to business. While Education has still been communicating with the audience by advertising for their e-learning options, other sectors especially Real Estate and Auto have not been advertising at all given there were little to no sales during the lockdown.
Sharing his views, Agnello Dias, Co-Founder, Taproot Dentsu and Creative Chairman, Dentsu Aegis Network said, “I think that providing some relief to the FMCG sector will fuel up avenues for a lot more advertising of the category which should be great.”
Even for print, e-commerce is fast emerging as an important category and grew 14% in 2019 over 2018. Any relaxation here could bring their communications back to print.
In his speech, Prime Minister Modi also mentioned that MSME, small business and co-operative business will be given special attention in the economic package. Depending on the kind of relief announced for these sectors, it could open up channels for communication from a lot of small brands especially in the clothing and fashion jewellery category on the digital medium.
Most digital platforms have called the lockdown a double whammy as growth in traffic failed to lead to any monetization opportunities. Finally, some relief to spenders on digital in the ad front could be a relief for digital platforms that include not just OTT options like a Hotstar or a Sony Liv but also social media players like the Facebook who saw a major dip in ad revenues in the wake of the pandemic. The digital medium as per the latest Pitch Madison Advertising Report Digital has been growing unabated for the last 10 years and it grew again in 2019 by 32% and gained 3% share points from TV and Print. The first and second half of 2020 could be slower growth due to the pandemic but brands opening up to advertise on the medium can save the medium from seeing negative growth.
Content makers have taken a huge hit in the crisis as no new content could be produced during the lockdown. The largest film and entertainment industry in the country in Mumbai has taken a tremendously impacted. As it turns out some of the larger production houses have written to authorities to grant them permission to shoot outside of red zones in order to resume productions.
Once productions are resumed, the film and entertainment industry will open up to advertising which could benefit all mediums including TV, print, digital and others. While Cinema as a category can benefit other platforms, it will also gain from advertisements. After all, cinema, which has been the favourite of very few advertisers in the last two years, has gained some momentum, having grown by 37.4% in 2018 and 30% in 2019. Though the base is small, cinema is the only other medium, besides digital, to show high percentage growth. Cinema includes a lot of local advertising which will open up once MSMEs and small businesses are given relaxations as promised by the prime minister.
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