Indian Advertisements – forced to reshape due to Covid-19 pandemic

Dr. Shampa Nandi, Faculty, ISME

Covid-19 crisis has spared none; society, economy, business and mankind are all trying to navigate through this difficult time, challenges, crisis and shocks. Several steps are taken by companies to overcome the challenges and reshaping their businesses and plans. Advertising industry as a whole and its creations, the advertisements are facing disruption and turmoil due to the changing consumer behavior, economic crisis and the new norms.

In this ‘unprecedented time’, Indian advertisements have reshaped their campaigns to be relevant, timely and to be fitted with the challenging time where a majority of India is under lockdown, market has shrunk to its lowest, buyers have restricted their purchases only to essentials commodities and work from home has become a new normal.

There are several complex and interrelated factors that have impacted Indian ads. Ad campaigns are coming up with more sensible messages to cope up with the disruptions and aiming to gain consumer assurance to a larger extent. With uncertainty prevailing in the business and a series of lockdowns, future becomes very unpredictable. Multiple factors that compel Indian Advertisements to reshape their campaigns are—

1.   New ad campaigns are either delayed, rescheduled or cancelled

Business are trying hard to survive in the market and cost cutting has become inevitable. Consequently, allocation on ad budget has reduced substantially. AAAI (Advertising Agencies Association of India) has already approached to Central Government for relief.   Many small and medium agencies are downsized or bankrupted to manage the fixed cost of operations. A recent interview conducted by Brand Equity with top officials like Sam Balsara, Chairman and MD, Madison World; Shashi Sinha, CEO, IPG Media brands India and Ashish Bhasin CEO of APAC and Chairman India, Dentsu Agencies have revealed that majority of the clients are in the mode of saving their workforce, struggling to run and keep their businesses intact. Most of their clients are now in the cost saving mode. Many of the giant FMCG clients are not sure about future market, and the production units are shutdown. Highest priority for them is to be back to the production and conserve cash. As a result, the advertisements have taken a back seat.  Allocation on advertising budget has shrunk substantially.

2.     Post lockdown era, possible emergence of FMCG as larger segment in adex

FMCG is a predominant player in adex, spending around 30% of total adex and is expected to grow even larger during Covid-19 era, or post Covid era, as projected by ad gurus. CPG (Consumer packaged goods) industry is showing a positive growth in current business scenarios. Infiniti Research has projected that CPG industry is moving towards digital consumerism, home delivery and multichannel selling.  Substantial portion of adex are expected to come from CPG industry.

3.     Major changes in media habits

Lockdown, work from home options or restricted outdoor movement have forced people to spend most of the time at home. Social distancing, postponing of major outdoor games like IPL and Olympics have crunched the ad spaces. Mall are shut, theatre halls are closed and consequently in-mall and in theatre ad space are limited. In fact, all outdoor advertisements will fall sort of creating visible impact. On the other hand, a paradigm shift is being observed in media habits among consumers both in urban and rural front. Exponential growths are observed in amount of time spent on digital space. TV viewership rate has increased significantly and people spent a lot of time at Social Media, OTT (over the top media services) and Gaming sites. These are the new media spaces emerging to be explored by the ad and media agencies. Though, TV will still lead in terms of media space, digital media will take the second place beating Print media. Streaming services like Hotstar, Amazon Prime, Netflix have emerged as new form of entertainment options and advertisements are favoring these slots as new media options. Though, most of the times SVOD (subscription video on demand) and streaming services offer ad free environment and pose threats for posting ads. Facebook, Google, YouTube are already in the top list for placing advertisements. One other major development is placing advertisements is the news channels, as popularity and viewership of news channels have observed a tremendous growth because of this uncertain and unprecedented time.

4.     Legacy agencies are forced to move towards digital ads

Social distancing, working from home, lockdown individually or combinedly stalled mega productions and forcing them to adopt digital tools and shifting the operations in online mode.

5.     Reflection on advertisement due to change in consumer behavior

Due to Covid-19 some visible changes in the behaviors of consumers are very much prevalent. Though most of the states in India, have reopened the market and economy, there is a long way to go to reach to normality.  Some major changes in consumer sentiment and purchase pattern are —

·       Cautious approach toward spending and prioritizing buying essential products/services

·     Health/hygiene products like mask, protective gears, sanitizers, groceries are in the top list of purchases

·       Delay in long term investment and cutting back discretionary spending

·     Apparel, entertainment, personal care services, travel, tourism have taken a backseat in buying list

·     Online education, digital payments, online delivery, contact less services, omnichannel delivery are growing and will continue to grow

·       Shift in buying local brands, herbal products and national brands

·    Automobile sector is expected to grow in two-wheeler and four-wheeler segment as public transport options are limited and vulnerable to infection.

Reshaping advertising plan and opportunities to ad agencies

Companies and ad agencies should plan to create ads considering changing consumer attitudes, behaviors and purchasing habits.  CPG companies have huge opportunities to bring more varieties of essential products like, rice, flour, pulses under branded categories. Since advertisements play a major role in creating brands, ad agencies should anticipate and respond accordingly. Disruption in the supply chains has created huge opportunities for the local and organic brands and also GOI is promoting ‘Atmanirbhar Bharat’. SMEs would need to take quick actions to respond to this recent phase and consider to build their brands by adopting new advertisements and connecting with their consumers closely. Because of budget constraints, most of the SMEs would prefer digital ad campaigns and this is an upcoming area for the ad agencies to focus.

Ad companies should explore few areas to get more clients, as they are surging up with more number of advertisements as visible in recent data.

·       Insurance- example: Policy Bazar

·       Health and Immunity booster- Dabur Honey, Patanjali’s Coronil

·       Products with germ killing ability- Colgate Vedashakti

·       Online courses- Byju’s, Islamic Fintech Hive, Vedantu

·       Online payment- Mobiqwik

·       Online games-Play Rummy

·       Automobile-Mercedes Benz GLS, MG Hector Plus

     Conclusions

In this difficult unforeseen situation, consumers are more sensitive, consumption patterns have changed, future is unpredictable, there are not ‘one size fits all’ solutions available to the brands and the advertisers. Ad agencies should make the best effort to optimize the media consumption based on media habits, respect consumer sentiment and come up with ad campaigns with more meaningful and positive contents.

Disclaimer: The views, opinions, and content on this blog are solely those of the authors. ISME does not take responsibility for the content which are plagiarized or not quoted.

References:

https://www.bloombergquint.com/economy-finance/covid-19-pandemic-radically-changing-consumer-behaviour-in-india-survey

https://www.campaignlive.co.uk/article/advertising-vs-subscription/1669033

https://www.livemint.com/industry/advertising/covid-19-impact-advertising-association-seeks-tax-relief-gst-refunds-11587010945755.html

https://www.youtube.com/watch?v=-LHBDHAsFc8

https://brandequity.economictimes.indiatimes.com/news/industry/covid-19-impact-how-the-indian-ad-industry-is-dealing-with-uncertainty/74682372



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