Ad spends to go up by 8-10% to Rs 25,000- 30,000 cr this festive season: Experts

With the surge of crowds making heavy purchases on both e-commerce platforms and retail outlets, it is turning out to be a bumper festive season this year. As pointed out by Indrajeet Mookerjee, Managing Partner, dentsuMB, “After two years of restricted mobility, consumers are spoilt for choices. The year 2022 is much more open for offline business. It is natural that offline sales are seeing a significant uptick during the festival season, especially when compared to 2020 and 2021 offline festival sales.”

“In India, the festive season starting from Ganesh Chaturthi and continuing till Diwali accounts for 30-45% of annual sales for most consumer-facing companies,” Mookherjee said, adding, “This is also the period when companies in India increase marketing spend for a larger share of the consumer’s wallet. It will be a mixed bag in terms of ad spends, as start-ups are seeing funding winter while consumer goods and auto will still see higher spends due to launches.”

West Bengal and the East markets saw great traction from consumers during the Durga Puja festival. Mookerjee noted, “The start of the festive season is looking quite optimistic. Without Covid-19 restrictions this year, retailers feel post-pandemic normalcy could aid demand. Brands have been focusing on a strong omnichannel presence, beefing up their media budgets to make their presence felt at every step of the consumer. Companies are also prepping back-ends by stepping up temporary hiring, expanding capacities at fulfilment centres, onboarding new brands and strengthening their assortments.”

This year also saw extended Durga Puja festivities in West Bengal, as shared by Vandana Ramkrishna, COO, Madison Media Ace, “Both consumers as well as the markets have been geared up for nothing less than an extravagant celebration. Given the announcement by the state government in West Bengal of schools being shut for all 10 days, many big pandals opened from September 25, 2022, that is, Mahalaya instead of the usual opening on Shashti or the 6^th day. This resulted in the market buzzing since end of August, which is way ahead of the festivities.”

The massive countrywide Covid vaccination drive that has covered 90% of Indian adults, have given the confidence to get back to their normal shopping ways, thus, giving a boost to traditional touch, feel and experience retailing. The distribution of products and in-store retailing have also got the much-needed thrust that will enable the revival of the retail segment.

Mookerjee noted, “One of the fundamental outcomes of the pandemic is that people are starved for experiences after being cooped up/ restricted for a large part of two years. So, any brand (being offered online or offline) that promises an enhanced experience will do well. When it comes to offline retail, this could mean innovative sampling, promotions, displays and contests. For online, technology (metaverse, AR, immersive experience) could play a part.”

Brands are capturing the enthusiastic consumer sentiments in the wake of the festival timing. Call it revenge shopping or a positive market sentiment, but consumers are showing a higher propensity to spend this festive season, compared to the last two years, with gifting being one of the primary motivations for spending. According to a ShareChat report, around 76% of consumers are influenced by ads for making purchase decisions. The ShareChat report also states that offers and discounts are influencing about 49% of the buying decisions and adds that social media plays an instrumental role in influencing purchase decisions and brands understand that.

Festive ad spends

Mookherjee noted, “According to industry experts, advertising spend is expected to go up by 8-10% to Rs 25,000 crore to Rs 30,000 crore this festive season. While media spends will be primarily driven by TV and digital, print and out-of-home (OOH) spends will also grow. The key categories will be e-commerce, automobile, fintech companies, banking, financial services and insurance (BFSI), online gaming such as fantasy sports, food-tech services and retail. Television is expected to account for about 41-43% share of ad spends, followed closely by digital at about 33-36%.”

Speaking about the ad spends, Namrata A Chotrani, CEO, Khadim India Ltd, said “Our marketing spends are mainly focussed on ROI driven campaigns on digital media, which goes hand in hand with the brand’s overall strategy. We would spend 1.5 % to 2% on brand promotion in FY23.”

Bounty for E-commerce

The categories on the top that the shoppers are spending more this festive season are accessories, mobile, apparels. According to reports, during the initial four days of the festive season, E-commerce platforms sold goods valued at Rs 24,500 crore, with mobile phones numbering at 1100 and worth Rs 11,000 crore sold each minute. E-commerce platforms have accordingly rolled out their festive campaigns such as Flipkart’s ‘Big Billion Day’ sale, Meesho’s ‘Mega Blockbuster Sale’,  Amazon’s ‘Great Indian Festival’ and others.

Ashish Aggarwal, Co-founder, NutriGlow, observed, “People are often inclined towards online shopping during the festive season. The reason is that e-commerce platforms offer huge discounts, and consumers also get saved from the hassles and chaos of going to places for their needs. Online shopping saves a lot of time and is available on the go, especially in today’s time where you can almost find everything easily.

As far as festive season ad spends are concerned, Aggarwal said “Leading e-commerce giants like Amazon and Flipkart have spent almost twice on their ads for gaining sales and visibility this year. To make people aware of our existence and to make them understand the importance of choosing NutriGlow, we have also adapted the same strategy.”

Bonanza from brands

Brands from fashion to jewellery to e-commerce to real-estate as well as FMCG have left no stone unturned to draw consumers to their offerings for the season.

“The returning of normalcy has boosted the spirit of the consumers to shop freely in stores. They have geared up to explore the best offers by the brands. Understanding the same, we are all set to indulge our consumers with galore of options in premium range of footwear along with revitalized in-store experience across our COO (Company Owned Outlets) as well as in franchisee partner stores. We are witnessing significant footfalls in our retail outlets. The pandemic has brought in some shifts in buying behaviour of consumers. People like to explore the best of both worlds – offline and online. Hence, the confluence of online and offline is going to co-exist,” noted Namrata A Chotrani of Khadim India. She further said, “To move in tandem with the festive demand, we are also enhancing omni-channel facility, allowing consumers to buy products as per their convenience and provide them a seamless shopping experience.”

Chotrani is expecting this festive season to be a strong comeback in terms of business, compared to the last two years.

NutriGlow’s Aggarwal added here, “As a cosmetic brand, we expect to see a ramp in our sales on a positive note and want to introduce natural, safe and affordable skincare or hair care solutions to everyone.”

“With inclusion of Durga Puja in the UNESCO List of Intangible Cultural Heritage of Humanity, there was a stronger focus on Durga Puja this year,” remarked Anuvrat Pabrai, Founder, Pabrai's Fresh Naturelle Ice Creams. He noted that while all brands try to outdo each other, clothes, food and soft drinks brands have been seeing higher activity this year. “As usual for Puja, the categories which are seeing more action include clothes, cold drinks, food and domestic holiday packages. Foreign travel will also increase as younger generation is keener on it,” he added.

Mookerjee, too, felt that this year, the festive season has encouraged tourists to engage in a sort of ‘revenge travel’. “This is due to the fact that over 70 per cent of hotel rooms in the tourist destinations of northern West Bengal are booked for the Durga Puja vacation. Top companies in the automobiles, consumer electronics, FMCG and retail sectors are expecting to earn back 20-25% of their yearly targets in these two-three months of the festive season,” he added.

Discussing about the new products launched, Khadim India’s Namrata A Chotrani said, “With the overall market sentiment looking positive, people are looking ahead to celebrate the festive season with renewed fervour which is accelerating the market demand. We are witnessing an uplift in demands for our premium and trendy products across categories. During this period consumer prefers to spend on buying footwear that will match their festive ensemble. We have launched a premium range of products at an affordable price point under sub-brands British Walkers, Lazard, Turk, Sharon, Cleo, Softouch, PRO, Bonito and Adriana. We are hoping the new range will have a good response.”

Discussing further about the various strategies undertaken by Khadims, she said, “We have also introduced in store offers for consumers on purchase of Rs 1,000 and above, which customers are gladly availing. It will help to drive up our average billing value and average selling price. We have deployed CRM program that ensures continuous consumer engagement, helps us to analyse their shopping pattern and design our communication accordingly. Additionally, to drive visibility, in strategic locations of Bengal we have installed Giant Size cut-outs displaying different designs of our festive range of footwear. We have also initiated store led BTL activity to drive primary consumers to the store in Tier 2 and 3 markets. For our distribution business vertical, we have initiated store front branding for the multi brand retailers to strengthen our overall brand visibility in interior markets.”

Speaking about PepsiCo India’s festive strategy, a spokesperson said that the festive season is an important time PepsiCo India, as it provides the company with a platform to deepen its connection with consumers. “With consumers both at home and out-of-home seeking convenience and value, we are ensuring that we meet their specific needs be it through our on-the-go packs on Tropicana or large packs on brands like Pepsi, 7Up, Lay’s and Doritos, among others. As a consumer-centric organisation, we are also dedicated to make experiences memorable with our unique offerings, which heightens during the festive period and have diversified our product range with recent launches like Lay’s Gourmet, Kurkure Chatpata Cheese, Pepsi Black, Quaker Oats Multigrain, etc.”

To make the moments even more delightful, both the portfolios are also planning to bring unique digital-forward and value-for-money offerings through celebratory packaging such as PepsiCo’s recent partnership with Bharti Airtel to bring an innovative offer for the consumers. As part of this collaboration, on the purchase of Pepsi, Mountain Dew, 7UP, Mirinda, Slice, and Tropicana PET bottles consumers get Airtel Recharge coupons worth Rs 10 to Rs 20.

“Furthermore, we continue to strengthen our distribution both through traditional and e-commerce channels to be able to cater to consumers across urban and rural geographies to make these festive occasions more memorable. Another key offering this festive season will be our on-the-go packs on Tropicana or large packs on brands like Pepsi, 7Up, Lay’s and Doritos,” the PepsiCo India spokesperson added.

The communication angle

The festive period is a great opportunity for brands to discover new consumers, form stronger bonds with existing consumers and increase brand awareness and brand loyalty, by being present across all customer touhpoints, personalised brand messaging and helping in brand recall.

According to Meta’s Diwali Seasonal Moment 2021 report by YouGov, around 80% of the Diwali shoppers are currently discovering newer brands and products through the online medium and around 68% of DiwalI Sales Days shoppers found out offers and discounts through Meta.

“Advertising a brand these days is not just limited to TV ads. Marketplaces have become fluid, and social media have played a huge role. Besides traditional TV ads and hoardings, brands are now leveraging the power of Instagram, Facebook, Social Media Influencers, and Brand banners on the E-Commerce platform to rope in Digital Customers,” noted Ashish Aggarwal of NutriGlow.

Talking about the means and channels brands undertake to reach consumers during festive period, he said, “The consumer is given a variety of options, thanks to the availability of goods on e-commerce and in physical stores, but convenience and value are the two factors that will ultimately determine their decision. Customers have the option of purchasing products online after experiencing them offline or vice versa. These days, e-commerce is more than just a market; it serves as a platform for brands to reach new customers and present their goods and services to a wider audience set.”

Sharing her views on this, Madison Media Ace’s Vandana Ramkrishna said, “Apart from the regular mix of communication, I have observed that, both organised as well as unorganised sectors, are leveraging the use of influencers in a big way. Influencer campaigns in partnership with brands not just romanticize the brand but also help bring the much-required traction, especially to stores (retail), a sector that was worst hit during the lockdown.”

Talking about the celebrity partnerships, Ashish Aggarwal adds, “Bringing in a celebrity also always helps. On that note, we are pleased to announce the appointment of stunning Bollywood icon, actress, model, and inspiration Genelia Deshmukh as our brand ambassador. Genelia will endorse our brand’s scientifically-formulated, premium face and body care products and drive home our motto of affordable luxury.”

Further speaking on the campaigns during the festive season, Chotrani said, “Our Durga Puja brand campaign is created targeting the young audience who are consuming content on digital platforms and are looking for fashionable products at an affordable price. Keeping aligned with this we have created our campaign featuring the two most popular YouTubers of Bengal – Kiran Dutta (The Bong Guy) and Indrani Biswas (Wonder Munna) – considering their reach and connect with the young audience. Also, we created our brand campaign in Bengali as people can relate and connect more with the language they speak. Set in the backdrop of festive shopping, the campaign highlights our trinity offerings of refreshed in-store experience, affordable pricing and fashionable range of products that creates ‘Its Wow, its Khadim’ experience for the consumers.”

"The rising wave of consumer demand post-covid phase has accelerated the need for ad-spends mainly on paid search, social media, mobile, and e-commerce. With the festive season around the corner, there will be a significant rebound in TVCs and DVCs in the coming months. Not only the dominating digital advertising platforms Instagram, and YouTube would enjoy a massive increase in consumer footfall, but the festive season will also bring back the crux of mainline television spends for businesses." says Lavinn Rajpal, MD & Co-founder, Chimp&z Inc

Mayank Shah, Senior Category Head at Parle Products shared "The past two years have accelerated the growth of e-commerce as offline retail stores were affected and became non-functional during the pandemic. Since then there has been a healthy growth trajectory in online shopping, accelerated further by the festive season.  With the ease and convenience it offers we expect the festive season purchases to be a mix of both.Hence, while offline shopping will be the go - to thing for consumers, the online medium will also see a greater traction for festive shopping than previous years. The brands that have established offline and have upgraded to online presence will see greater traction and will dominate the market." 

 He further added  "The practice of gifting is central to the festive season. We have witnessed an increase in festive gifting through the online medium. As the festive period is usually very hectic, people are not able to reach out to their loved ones in far off places. Gifting through e-commerce channels enables them to celebrate festivities with these people in spite of the geographical distance."