Source: The Hindu Business Line, Mar 21, 2020
NEW DELHI: The Indian advertising industry may suffer a ₹5,000 crore blow in the next three to four months if the Covid-19 outbreak is not contained, according to estimates by media buyers.
More than ₹2,500 crore worth of ad spending is already at stake with the Indian Premier League (IPL) cricket tournament being postponed.
Summer advertising, which pulls in more than ₹2,000 crore of ad spending on tourism, consumer durables, food and beverage, and fast-moving consumer goods, continues to remain at risk.
Media buyers said the effect of activations and below-the-line promotions being cancelled completely could be severe because of product launches being deferred and many categories such as movies, food and travel likely to face a complete washout if the lockdown announced by the government intensifies in view of increasing number of positive cases of Covid-19.
“April to June is a big quarter for the ad industry as it is the onset of the new financial year, IPL is scheduled and summer-specific brands also start advertising. How this quarter pans out is crucial,” said Navin Khemka, chief executive of MediaCom South Asia, a GroupM-owned media agency.
There is more anxiety and less panic but if more businesses get locked down, then panic will be triggered, said Sandeep Goyal, chairman, Mogae Media, a Mumbai-based marketing and communication agency.
“Right now, it is more about postponement with the possibility of business restarting if normalcy returns soon. However, if the current hysteria extends beyond March, the repercussions will be severe,” Goyal said.
The growth for this year has vapourized, experts said. Travel and tourism have been severely impacted and businesses with personal contact such as cab-hailing apps and food delivery are also facing the heat because of the disease transmission fear.
Entertainment, events, sports, retail and restaurant businesses are braving the temporary shutdown in hope that the outbreak will be contained soon.
Anand Bhadkamkar, chief executive, Dentsu Aegis Network India said that
events and activation business has come to a standstill with mall activations and on ground promotions getting postponed.
“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 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 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,” he added.
As at home media consumption increases and buying and consumption habits change in the wake of Coronavirus outbreak, it would also be essential for brands to tweak the way they market their products and services. “I feel that at this point in time, marketing is necessary, the messaging needs to be authentic, topical, one that build trust and reassures. Our client Domino’s, for instance, came out with a topical campaign on pizza deliveries untouched by human hands. To me this is brave and responsible marketing. In the times of Covid, marketing needs to be controlled and not viral,” said Vikram Sakhuja group CEO at Madison Media.