While 40% of ad spends come during festivals, particularly Diwali, brands this time haven’t been keen on spending, making it a dull season for advertising agencies
Diwali is the peak of the festive period in India and advertisers clock in the maximum sales during the year. A reason why the spend the most on advertising and promotion during this period.
Diwali, one of the most-awaited festivals for brands and advertising agencies, is not the bright enough for the latter this year. Why? Because not many brands have chosen to create special Diwali ads for the period otherwise known for high spends for everyone alike.
Most of the media planners said that even the inventory is full during this period as it has been witnessed every Diwali season.
Full inventory would mean that it would have to be sold at a lower price to advertisers.
However, during Diwali season when there is no inventory otherwise, media companies could have charged a premium to whatever inventory was remaining.
This year the overall ad spends during the festive season is expected to be around Rs 24,000 – Rs 25,000, told Ashish Bhasin, chairman and CEO South Asia, Dentsu Aegis Network to a media advertising website. This is a 20-25% growth from last year as the overall ad spends last year is estimated at Rs 20,000 crore.
However, there are others that expect a muted growth in advertising spends this year, especially with the Diwali period being muted.
“Broadly Diwali period has been muted. This is mainly due to a few reasons. First, it is the GST story still playing out post-demonetisation that has impacted advertisers. Second, overall it is an early Diwali this time and the spends end up being lower as the period is shorter. When Diwali is later (late October/early November) it gives more window for ad spends. Third, the overall lack in demand that is being seen. So the annual growth in ad spends that was predicted this year won’t be met,” said Debraj Tripathy, managing director of MediaCom.
The number of ads this Diwali season are lower this year in comparison to last year, he said, adding, “It is not that any sector in specific has not been spending on advertising this Diwali; even the ad spends by each of them is lower than what it used to be earlier.”
However, according to Shekhar Banerjee, COO of Madison Media, certain sectors are not firing well. “As to which industries have spent lower this Diwali, we will only know after we have analysed the data.”
He believes the extended monsoon season has caused issues in rural areas, and that goods and services tax (GST) has impacted the over ad spends during this period.
Indu Kannan, associate vice president, Kestone Integrated Marketing Services, said, “The advertising spends have definitely gone low this year. Individual brands have shown a visible disinterest in leveraging Diwali to lure customers with unique advertising campaigns at different platforms. Only e-commerce players like Flipkart, Amazon etc. are being seen active in creating a buzz around this season. This downfall in ad spends could be attributed to both GST and to some extent demonetisation which has created cash liquidity issues impacting spendings.”
“The advertisements this year are mostly on digital platform. Instead of creating integrated ad campaigns, marketers and advertisers have gone for standalone campaigns. Besides, marketers, as usual, are focusing on luring customers through lucrative price offers,” she said, adding that the consumer segment seems to be quiet this year with its festive campaigns. “To some extent, the automobile sector has also been not very active this year,” she said.
While there may be other reasons why it has been so for advertisers, what is clear is that the impact of GST on the entire economy has resulted in lower ad spends by brands this year.
This was seen clearly as ad revenues dipped by 25% in July itself, the first month after GST implementation, according to a report.
LULL SEASON
- This year the overall ad spends during the festive season is expected to be around Rs 24,000
- Media planners point out to GST as a reason for the poor Diwali season this year
- Other reasons include extended monsoon season, early Diwali and demonetization
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