Hi there, hopefully you are safe & sound and practising social distancing. The Covid-19 outbreak has affected all forms of life and businesses. We covered the impact of Covid-19 on Indian e-commerce in our last blog. In a similar manner, we will glance over the current situation for the advertising industry. It is no secret that the advertising industry is bearing plenty of losses due to many cancellations. The outdoor advertising has taken the biggest hit due to the lockdown. The relevance of online advertising has also decreased. As of 21st March, the Corona virus scare has already delivered a scary blow of ₹5,000 crore to advertising according to livemint. The postponement of the IPL cricket tournament alone had an ad spending of ₹2,500 crore. Currently the delaying of the event has caused anxiety but if the lockdown increases, this state of anxiety will soon change into a state of panic. The moral dilemma is obviously to prioritize the safety of the general public, but that does not take away from the economic loss this pandemic is causing by the day. The summer season, which pulls almost ₹2,000 crore of ad expenditure on many industries like customer durables, tourism, eatbles and other consumer goods is still at risk.
According to livemint, “Coronavirus impact: Over 50% of India Inc sees impact on ops, 80% witness fall in cash flow ” this was based on The findings through interactive sessions and surveys conducted by FICCI amongst the industry members.
The Media industry professionals claim that the effect of these activations of BTL promotions being canned completely can have serious implications. This is due to the product launches being postponed.
In another interview, Anand Bhadkamkar, chief executive, Dentsu Aegis Network India said that
“It is going to continue for two weeks at least in the metros. Most of the clients are postpoing and pulling back on launches and promotions if the situation doesn’t become better it will have ramifications. The ad spend projections are shifting with digital consumption increasing we might be witnessing an uptick in digital ad spends. The economy itself is struggling and the clients will cut back on their spends completely therefore next two to three months are critical. This is the evaluating and holding back stage by advertisers but the impact is being felt all across”
Due to the lockdown, more people are spending time indoors and on online activities engaging in different types of video, news and social media content. There is a rise in demand for different categories like DIY or tech products. There is a high probability that other categories will see an immediate fall, but is a viable option to keep engaging in non pushy branding activities. This means to stay visible across different platforms but don’t spend too much as it will not get you any business.
The Indian economy is fighting tooth-and-nail to stay afloat, with the current scenario, digital advertising is no exception. The lockdown can be the cause of many startups having existential challenges. Small businesses in advertising have two priorities (besides the safety and health of employees and their families). The first is to survive the disruption and other to wait till the lockdown is over to recover from disruption. The bond between the advertising ecosystem members like advertisers, agencies and suppliers is extremely essential to survive during these times. The interdependence of these members is crucial, if the advertisers will pull the plug, it can have long term repercussions on the publishers and their organizations.
Mumbai Civic bodies have asked OOH owners to carry Coronavirus awareness ads and replace their respective clients’ ads. The hoarding owners have to bear the cost, however the license cost for the number of days these ads will run, will be rebated later. This mandate was meant for 10 days from 16th March onwards, however one still observes the ads have not been removed as the number of infected cases are only increasing by the day.
Even though there is a huge shift in consumer behaviour, there is a notable increase in online traffic. But advertisements in many industries like hospitality, tourism, transport, luxury and sports are paused. There is a race amongst the online gaming and streaming services to access the new displaced audience as their numbers surge, they want to tap into bigger pools to attract larger audiences.
Analysing a report from IAB and the impact of coronavirus on the ad-spend, more than 74% of the media buyers, brand and planners said that the pandemic will have a bigger impact on the advertising industry than the 2008 crisis. It may sound scary, but it is not far from the truth. The financial crisis has started knocking on doors and it may as well knock down many small scale startups on its way.
The IAB report on Indian advertising estimates that almost 70% of buyers have modified or paused their planned ad spend, on the other hand almost 16% are still pondering on what actions to take. The digital ad expenditure is down by 33% and the conventional media is down by 39%. The majority of bigger brands and advertising giants (63%) have changed their brand messages and are digressing towards contributing to spread the word and urge people to stay home and stay safe. There is a rise of 41% in cause-related marketing.
Moneycontrol said that the brands feel that if they are not producing anything then they have no need to advertise, and this has proven to be fatal for the industry. More advertising is not reciprocating to more business. The indefinite nature of the lockdown is starting to cause panic in the industry.
To summarize, things are not looking good for the advertising industry from the current standpoint. But, it doesn’t say that things will not get better. Once the lockdown is over, life returns to its normal form, there will be major surges in consumption, resulting in a bigger advertising budget. The brands will scratch and claw to get to the top and reach out to as many audiences as possible. Contributing to the above study, at Taglr’s own exclusive ad platform ShopperAds, there is a gradual decrease of 60% in traffic since the lockdown began. The only viable option here for the industry is to hang on and survive this phase together. The advertisers and the publishers have to trust their business bonds and strategize accordingly. As soon as the lockdown is over and you get back in business, don’t go all out on ad expenditure, analyse and understand the user behaviour before you engage. In the meantime, stay home and stay safe.