We expect spends to improve across categories over last quarter: Tushar Vyas, GroupM
The pandemic is taking a heavy toll on economic growth; according to a UN report, India’s economy is expected to contract by 5.9 per cent amid COVID. As per Ministry of Statistics and Programme Implementation’s provisional estimates, India’s Gross Domestic Product (GDP) for the April-June quarter (Q1) slipped by a sharp 23.9 per cent, the time the GDP has seen contraction in over 40 years.
India’s COVID cases have crossed 58 lakh, with over 9.7 lakh active cases. India stands second in terms the total number of cases, after the US.
While the lockdown period saw a fall in spends by brands and consumer sentiments, things are now beginning to look up with the double bonanza of the festive season and the return of the Indian Premier League (IPL).
Adgully spoke to Tushar Vyas, President - South Asia, GroupM, for his insights on growth projections for AdEx this year, revival of ad spends, the IPL & festive season factors, growth in Rural India and small towns and much more.
Ad spends were predicted to grow around 10.5 per cent in 2020. With the pandemic having disrupted the economy and brands slowing down on spends, what kind of ad spends will we end up with this year? How much time will it take us to come back to normal?
We will end this year with negative growth in AdEx, however, it’s not a uniform impact across all media. As per our estimations, digital is relatively less impacted, followed by TV, radio, print, OOH and cinema.
Revival of ad spends depends a lot on consumption picking up on ground, tentpole activities like IPL and the festival season. While FMCG consumption from rural India and small towns, tractor and motorbike/ scooter sales are on the rise since May 2020 to now, the trend needs to be broader and sustained for a few months for advertisers to gain confidence on consumption revival.
Festive mood has begun. Will brands be able to stimulate demand, and will we see an improvement in spend levels as compared to the previous quarter as spends happen maximum during the festive season?
The simple answer would be Yes, we expect improvement of spends across various categories over the previous quarter. The Indian festive season has always presented a gigantic open door for advertisers to engage with existing and potential customers. Nonetheless, the pandemic this year has made consumers more careful about their purchase and the current market distress has affected all spends.
Having said that, with the ease of the lockdown, consumers are moving out to the stores where they are confident about the hygiene measures. eCommerce channels are doing well across various formats be it brand owned, hybrid format or marketplace.
What are the expectations from IPL this season – what with the tournament being held outside India and amid a lot of restrictions? How do you see brands leveraging IPL this season? Will it see the same kind of excitement and spending by brands this year?
From what it looks like, this year the perceivability for IPL would be the most noteworthy as compared to any other season. There is a level of excitement amongst the audience as finally sports have come back to their screens, and cricket has always been a key force in India. The IPL brings the community together and is important for brands and the audience. With the mounting fever of IPL 2020, this will be the chance for brands to reconnect with the audience, given that IPL 2020 and festival season are coming together.
Marketing pundits and experts are saying that smaller towns will help stimulate demand and brands may divert their energy there. What are your views on the same?
A lot of the impact of COVID-19 on ad spends depends on how we handle the containment of spread of the virus. The impact differs based on pop strata and geographies – small towns and Rural were looking better. However, the COVID-19 curve flattening across these areas will be critical to sustain momentum.
At a broader level, it will also result in hyperlocal thinking and demand moments. Marketers will start looking at smaller units beyond pop strata level planning and similar broader brush strokes. Today, there are enough media options available at scale to plan local or hyper local.
Digital is moving on the fast lane and brands have leveraged digital substantially. Will this trend continue, or brands will also closely view traditional media to achieve the desired reach?
The lockdown has accelerated not only media consumption, but the digital transformation will impact across all facets of marketing value chain – from purchase, distribution, communication, sales to customer service.
There will be higher outcome focus and an agile way of working – it will result in full funnel focus line between brands and demand will start blurring across many categories.
With higher e-commerce adoption during the lockdown resulting in net new additions of consumers across various e-commerce categories, the profile of e-commerce users has changed from impulsive to regular purchases.
My view is that the impact of digital needs to be looked at a broader level. Coming back to media choices, Traditional and Digital media will continue to co-exist, given our unique diversity.