Ad revival brings festive cheer in the time of Covid-19 pandemic

Advertisers increase budgets, return to TV and print media

Vinod Goyal, managing director of Jaipur-based Mangalam Builders, is discovering a new side of home buyers. After the lockdown, the demand for big houses, that people want to stay and work in rather than just invest in, has gone up; so have prices.
 

Much to the delight of local newspapers and radio stations, Goyal has pushed up Mangalam’s ad budget by about 15 per cent to cash in on this demand. “Any momentum is fantastic. Retail is bouncing back and they need print,” says Girish Agarwal, director, DB Corp. Its flagship Danik Bhaskar is among the leading papers in Jaipur that Mangalam advertises in.
 

“If FY 20, which was a normal year, is the benchmark, then we are at 90 per cent of that (in the print business) with same level of profitability,” says Agarwal. Even circulation or copies sold are now at almost at pre-Covid levels.
 

Similarly at Sony, the current season of Kaun Banega Crorepati, on Star the Indian Premier League (IPL) and the ongoing T20WC, have got advertisers back with a vengeance. There is a 25 per cent growth over the festival quarter (October, November, December) in FY 2020, the last normal year for everybody.
 

“There is an overall increase in demand and ad spend. There is pent up demand and advertisers have a lot of unused budgets. Plus, IPL and T20 boosted sentiment. TV has been a big driver,” says Shrikant Shenoy, general manager, Lodestar UM, a media buying agency.
 

It is estimated that the Rs 63,100 crore spent on advertising in 2020 will grow by 10-15 per cent this year. It had dropped by 20 per cent drop last year.
 

This looks like a one happy Diwali.

“There is definitely a revival, but there is also cautious optimism. There is some level of uncertainty because the third wave could happen. The second wave broke confidence — anything can happen without a warning,” says Mohit Joshi, CEO, Havas Media Group.

And that is the first point about this revival — it is coloured by the pandemic in myriad ways.

“People wanted bigger homes because they were working from home, so real estate started rising. Jewellery is rising because people want to put the money they saved somewhere,” analyses Agarwal.

“The skew of brand advertising changed; there is an entirely new set of advertisers called fintech, EdTech et al,” says Joshi.

Think of Byju’s or Cred. Much of this is simply because, thanks to the pandemic, our lives have moved online. Yet automobiles, which have been among the biggest advertisers on print and TV is yet to rise again.

A global shortage of chips has meant that “supply is a problem even though demand is strong,” says Shashank Srivastava, executive director, Maruti Suzuki. As a category, automobiles will just about reach FY2020 levels of advertising spend, he reckons.

“The revival is coming from tier 2, 3, 4 cities such as Nasik, Aurangabad, Dhanbad, Alwar, Gwalior, Sagar,” says Agarwal.

From about 65 per cent, DB now gets over 70 per cent of its advertising from local advertisers such as Mangalam in Jaipur or Anand Jewellers in Indore. That, surprisingly, is the second point. Unlike ad revivals in the past, this one is not led by Metro markets such as Mumbai or Delhi but by people in the second-rung cities getting restless and wanting to step out and spend. It also explains, in part, why print is soaring so quickly despite the fact that there has been no Indian Readership Survey or IRS since the last quarter of 2019.

 

This brings it to the last and most important point about the revival. It has reinforced the power of print and TV. The impact of being on say KBC or the front page of page of Dainik Bhaskar was clearly being missed. “Digital got a chance to prove whatever it had to prove. This has been a period of validation,” says Shenoy. He explains that the top funnel (of marketing) is about reach and awareness where traditional media works best. At the middle funnel where desire, preferences et al are being created, a mix of traditional and digital works. The bottom funnel which is about getting sales, driving e-commerce, is where digital works best.

At 468 million unique visitors a month, digital’s reach is just a little over half of TV’s 892 million. Print has been at a steady 421 million a month. The mind space that digital has occupied for some time now has been disproportionate to its hold and size. There has been a much-needed correction on that. As Shenoy says, “This year will be a one-of-a-kind.”