Riding a positive wave, digital firms may see V-shaped ad recovery in H2

Online companies seem to be on a roll when it comes to advertising. If the Indian Premier League (IPL) sponsorship race is an indicator, then only digital firms showed interest and commitment to invest.

According to IPL Commissioner Brijesh Patel, the rest — including big names such as Tatas and Patanjali — were keen but had not put bids.

Ashish Bhasin, chief executive officer (CEO), APAC, and chairman, India, Dentsu Aegis India, says digital firms are riding a positive wave. "The Covid-19 pandemic and lockdown have increased the rate of online adoption sharply in the country for most activities, significantly accelerating growth for these companies. These players want to capitalise on this momentum, leading them to aggressively invest behind advertising properties. This trend will persist in the future," he says.

The Pitch-Madison Mid-Year Advertising Review, released on Tuesday, said it expected a V-shaped recovery in the digital medium during the second half of the 2020 calendar year (H2), leading to a full-year growth ranging from 12 per cent to 18 per cent.

“It is significant that no other medium, barring digital, will achieve growth in 2020," says Sam Balsara, CMD, Madison World. "But the projected full-year growth for digital now is lower than our original forecast of 32.1 per cent for the medium made in February."

Even then, the aggression displayed by online players is something to take note of. For instance, digital companies are expected to make their presence felt on other high-impact properties such as Big Boss and Kaun Banega Crorepati, which are likely to be launched in September on Colors and Sony Entertainment Television, res­pe­ctively, media industry sources say. Some experts, how­ever, argue that traditional advertisers in fast-moving consumer goods, automotive, telecom, electronics, and handsets cannot be written off just yet: Many will make a bid for high-impact television properties in terms of advertising, just like their online counterparts.

"Sporting sponsorships of the likes of IPL work well for firms who are looking to mainstream themselves. Vivo did it earlier. Dream11 will do the same. While digital firms are well-funded and are seeking key advertising opportunities to improve brand recall and saliency, traditional advertisers will also seek consumer attention during the festive season," says N Chandramouli, CEO, TRA Research, a brand advisory firm based in Mumbai.

A BCG report released says consumer sentiment is slowly beginning to look up, despite Covid cases increasing steadily in the country. Most businesses in sectors such as FMCG and automobiles have indicated that consumer demand is making its way back gradually, especially in rural areas, where sales growth is higher than in urban areas.

The Pitch-Madison report, for instance, says that eight out of the top 10 advertisers in the first half of 2020 were FMCG companies. These included names such as Hindustan Unilever, Proctor & Gamble, and RB, among others. Of the balance two: One was an e-tailer (Amazon) and the other was an auto company (Maruti Suzuki).