I am not a believer in one of these V-shaped recoveries: Ashish Bhasin
Ad spends were predicted to grow at around 10.5 per cent in 2020. However, with the pandemic disrupting the economy and the industry facing overall slowdown, all previously projected calculations have gone awry.
What kind of ad spends will this year end with? How long will it take for the economy to return to any semblance of normalcy? Are Tier 2, 3 and rural markets really faring better than the Metros and urban markets? Can the festive season and IPL trigger some revival?
Adgully spoke to Ashish Bhasin, CEO, APAC and Chairman, India, Dentsu Aegis Network, on the sidelines of the 16th Edition of IAMAI’s flagship conference ‘Marketing Conclave’ that had gone virtual under the current circumstances.
At the outset Bhasin said that if one looked at the beginning of the year, most agency groups had forecasted a growth of 10-12 per cent for 2020. “As we all know, the second quarter of the calendar year was extremely challenged and even now, the GDP numbers have shown a record drop. I expect that we will end the year with 15-20 per cent negative growth, which is a massive decline, instead of a growth of 10-12 per cent.”
He saw spends increasing during the festive season as compared to the previous quarter, where spends had touched the absolute bottom. However, he didn’t think that should be the benchmark.
Adding further, he said, “I am not a believer in one of these V-shaped recoveries. Every month will be better than the previous month and it will marginally creep up maybe around Diwali and start looking more towards normal.”
At the same time he said, “I do think that we will meet the 2019 spends by only around 2022. With the pandemic, we have lost around 2-2.5 years and it will take us some time to recover from this.”
On the boost expected during the festive season and from IPL 2020, Bhasin pointed out that between Ganapati and the New Year, typically 40-45 per cent ad spends happen every year. The festive season is very heavy and it is the first time that the IPL is taking place during the festive season.
He noted, “In India, we are very sentiment driven and mood is very important. I feel the IPL is one of those properties that has the capability to lift the entire nation’s mood. It is probably the only property in the nation that perhaps everyone watches regardless of their geography and demography. The festive season along with the IPL can result in a positive shift of people's moods.”
The other positive aspect, according to him, is that the rains have been good this year and it is expected to be a very bountiful harvest. There will be money in the hands of the rural consumer, which will also help lift demand to some extent. All these aspects might start making things look better.
“However, there is no denying the fact that this isn’t going to be a great year,” he cautioned.
On the boost from beyond the metros, Bhasin said, “In general, I think rural areas and small towns will become extremely important partly because there is near saturation of coverage in metros for many categories.”
Adding further, he said, “We don’t realise it, but a lot of our economy is still very monsoon dependent because it is very agriculture dependent. Agriculture directly contributes to about 15-16 per cent of our GDP, but the indirect impact it has is massive. While it might be directly contributing just 15-16 per cent, in terms of population more than 50-60 per cent people are directly or indirectly employed in agriculture, agriculture related or rural markets in some way or the other.”
He stressed on marketers focusing more and more on these markets across categories.
Accelerated adoption of digital is powering brands’ growth in these times and Bhasin observed that clearly, digital has been and will continue to be the fastest growing medium. Even in a year like this, it has been least impacted.
He also said, “In India, I don’t think it will be a ‘One Medium OR Another Medium’ story, but it will be a ‘One Medium AND Another Medium’ story.”
He saw television continuing to play an important role citing the reach of television at 750 million people, compared to digital which has a reach of 450 million people. “Television still has the potential to grow too,” he remarked.
Talking about print, he noted that right now the print medium has been severely challenged, partly because the distribution was impacted and also with the consumers moving to digital, especially the younger TG.
Mediums like OOH, that have been affected by the pandemic, once normalcy is attained, they will bounce back. “India is a young country and people will be moving out,” he added.
Bhasin further said, “I don’t think the India story will be Digital versus other mediums, it will be Digital and the other mediums. Hopefully, we will probably see a growth in all mediums, except perhaps print. Having said this, Digital has shown a rate of growth at 2.5-3 times more than that of traditional media and that trend will continue.”