August upswing in consumer mood to power festive ad spends on TV
Auto, e-commerce and mobile sectors line up launches to leverage the buoyancy in the economy as wholesale inflation drops to lowest in five years
The festive season is upon us and companies expect consumer purse strings to loosen. These expectations are fuelled by the recent consumer price inflation (CPI) news of the ease in inflation in August to 7.80 per cent from 7.96 per cent in July and the wholesale inflation rate which dropped to its lowest in five years to 3.74 per cent in August from 5.19 per cent in July. This comes as good news not only for consumers but also for sectors such as auto, mobile phones and consumer durables that are gearing up for their season of highest sales.
Given the overall buoyancy, a slew of new launches from these sectors are expected during the festive season, with ad spends on television expected to grow in tandem. In a recent article on exchange4media, we reported about the 25- 30 per cent growth in festive ad spends on tv (TV gears up for more festive ad spends from e-comm, auto, durables).
Auto majors roll out launches
Continued strong sales for the second month in a row for the auto sector this quarter have kept up the momentum from a good Q1FY2015 quarter (Auto sector hits top gear, spends big on TV). According to data published by Society of Indian Automobile Manufacturers (SIAM) in July 2014, the domestic car sales went up by 5.04 per cent. In August, it went up by 15.16 per cent according to SIAM data. This is the fourth consecutive month that car sales have increased, signalling a recovery in the auto sector.
New launches are expected to ride this momentum,particularly from Maruti Suzuki, Hyundai, Mahindra & Mahindra, Honda, Tata Motors, Mercedes-Benz and Ford. In the two-wheeler segment, Hero MotoCorp, Bajaj and Yamaha have scheduled launches too.
Maruti Suzuki, whose total sales during August 2014 grew by 26.9 per cent, is expected to launch limited editions of its B-segment hatchback Swift and DZire that will go by the names Swift Silver Plus and DZire Regalia. Though the auto major has planned special festive packages to lure consumers, the big festive offering is the latest mid-sedan Ciaz which is expected to hit the showrooms at the start of October. With the launch of Ciaz we can expect to see a new promotional campaign on television, though print and outdoors have already created a buzz. Maruti Suzuki has traditionally been a big spender on television and is currently sponsoring big ticket shows such as India’s Raw Stars on Star Plus and Bigg Boss Season 8 on Colors.
Competitor Hyundai’s sales in August 2014 grew by 18.78 per cent and according to the SIAM data, the launch of new Hyundai Elite i20 had contributed to this growth in sales. The auto maker had the Borne Identity-styled TVC playing throughout the month on television to promote the new variant (https://www.youtube.com/watch?v=j2wfXfZaiq0). Part of its festive lineup also includes the compact sedan Xcent. The latest TVC featuring Shah Rukh Khan has been on air (https://www.youtube.com/watch?v=NbhivNATqeY).
Honda recorded a strong jump of 88 per cent in sales for August 2014, this is in spite of stopping the sales of its bestselling City. The auto manufacturer has its fair share of festive offerings and recently launched Mobilio which has seen a fair demand during the month. The auto company took a different approach to celebrity endorsement by roping in popular comic Kapil Sharma for their TVCs, where he plays a car salesman (https://www.youtube.com/watch?v=dhuDPluUi1o), (https://www.youtube.com/watch?v=EfnvbotSATM), (https://www.youtube.com/watch?v=Fzzj5MshwCk). The high-pitched promotions are expected to continue during the festive season.
Tata Motors, which had seen a decline in sales recent years, had made a vast improvement in the previous month with sales volumes increasing by 20 per cent. This is attributed to the new Zest. Tata Motors which promoted Zest in an innovative print campaign last month (Tata Motors turns the 'key' to success with Zest print ad), had also ran a promotional campaign on TV (https://www.youtube.com/watch?v=MCqFodgNL34). It is expected to push ad spends on TV in order to drive sales for Zest. However, Bolt, from Tata, which was slated to launch this year, will now hit the roads next year, with promotions for Zest to continue..
Hero MotoCorp which has been one of the biggest spenders on TV and have sponsored sports properties such as the FIFA World Cup 2014, Pro Kabaddi League and recently the Hero Indian Super League, is expected to spend big during this festive season. The two-wheeler manufacturer had recently revealed that it will launch at least a dozen products during the festive season. Though many of these are expected to be variants and upgrades of various models such as Hero Passion Pro TR and Splendor Pro Classic. This is expected to be backed up with solid TV campaigns.
Smart phones eye Diwali shoppers
Another sector that will see a slew of launches during this festive season is mobile phones. With Google partnering with Micromax, Spice and Karbonn for the new Android One mobile operating system, we can expect a range of new releases from these manufactures in the market in the festive season. The Android One phones are set to be released in October. However, Spice mobile has already released its Android One smart phone, the Spice Android One Dream UNO Mi-498, on Flipkart. The launch of these phones is expected to be accompanied by their own TV ad campaigns during the festive season in order to push sales, especially since entry of Chinese phone manufacturers such as Xiaomi and Oppo mobile are targeting this market. With an attractive price tag of Rs.5,000-7,000 sales for the phones are expected to be higher.
The India launch of Apple iPhone 6 and iPhone 6 PLUS has been pushed to mid-November, right before the biggest festival, Diwali. Going by its history, Apple will spend considerably on television to counter its rival Samsung, which is also expected to launch a new phone during Diwali.
According to the Economic Times report, FindYogi (which is a price-comparison engine) sees a 25 per cent growth in sales and over 35 per cent growth in organic traffic for mobiles during the festive season. This will definitely see an increase in ad spends on television from all mobile phone manufacturers which are vying for a bigger pie of the Indian market.
E-commerce to push festive spends
E-commerce, which has emerged as a serious player on television, is likely to spend big this season. Flush with funding and plans to tap the mass market, e-commerce players are planning to launch new TVCs.
For instance OLX, which recently signed on Kapil Sharma as its brand ambassador, has already launched its ad campaign. In an interview to exchange4media, Amarjit Batra, CEO, OLX said that he expected to see more traffic during the festive season and expects Kapil Sharma to be the hook (Kapil Sharma brings more traffic to OLX).
With a view to get a piece of the festive season spends we can definitely expect companies such as Flipkart, Amazon, Snapdeal, Quikr and other ecommerce players to introduce distinctive campaigns targeted towards the festive season and increase their spends.
Snapdeal has already signed a major sponsorship deal valued at Rs.35 crore for Bigg Boss Season 8, while Flipkart, Amazon, Snapdeal and Quikr are expected to spend big on television as well.
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