FMCG, electronics and fintech will lead adex this holiday season
The coming holiday season is likely to bring some cheers to the industry as the consumer sentiment has not dampened despite high inflation. As the country has come out of over two years of Covid curbs, this will be the first holiday of the new normal.
The leaders of the advertising industry believe that although there are still more imminent fears, they are cautiously optimistic about growth and increased advertising spending in several categories that will push demand.
Kapil Arora, co-chairman and CEO of 82.5 India, said they were optimistic. “I think the general feeling should be dampened against optimism during the holidays. Travel is back, there is a sense of freedom among consumers and one expects a certain enthusiasm for festive celebrations and purchases despite the pressure on games when we enter H2 , he said.
The holiday season accounts for around 35% of India’s total advertising spending. Therefore, it is still big for brands, media platforms and advertising agencies.
Vivek Srivastava, CEO of Innocean India, said they were approaching the holiday season with cautious optimism. He said there is pent-up demand and consumer confidence. “This is why brands need to increase prominence and engagement levels with potential customers so that full funnel efficiency can be increased,” he said.
This will lead to higher advertising costs across ATL (Above the line), digitally and experience-based. The only spoilers may be inflationary pressures and supply-side dampers in technology-related sectors that rely on semiconductors, he added.
However, Sandeep Goyal, CEO of Rediffusion, said that although inflation is very high, the holiday season is the only time consumers want to spend money. He explained that the average man has learned to live with inflation. There is already an increase in categories such as food, travel and clothing, which is a barometer to show how this holiday season will be much better than last year.
“We must also note that people have not spent the last two years and there must be accumulated savings. We must also expect a good chin from rural India because this will be the one holiday where Covid is behind us and it is a increased demand, Goyal said.
According to Amit Wadhwa, CEO of Dentsu Creative India, expectations around the holiday season are higher as the threat from Covid is far less today. “Yes, inflation may dampen it a bit, but I am still very hopeful and positive about the holiday since it is very important in India.”
Ketan Desai, Chief Operating Officer, Gray Group India, said that last year’s party season went very well due to IPL followed by the wedding season. – I do not think this year will be anything different. Yes, it is inflation, but it is the one time of year when India spends, he explained.
Which categories will spend big money?
A lot has changed in a year since 2021 when we saw that the economy stabilized a bit. The 2021 party season that collided with IPL had bought back a lot of normality. According to Redseer Consulting, India had a gross value (GMV) of $ 9.2 billion.
Today, categories such as cars and consumer durables, as well as start-ups, are gloomy due to various reasons. Start-ups face a financing crisis and lay off employees. On the other hand, the car category has to do with supply chain problems. Therefore, the expenses from these categories can be slow.
According to industry leaders, the typical users such as FMCG, electronics and fintech will be large users.
However, Srivastava from Innocean explained that advertisers of the affected categories are looking at long-term perspectives and opportunities.
“Brands and their managers, ie our customers / advertisers, are not short-sighted in their perspectives. With the tactical approach of supply constraints in the automotive industry, advanced consumer electronics or smartphones, etc., it is a visible move to look at medium to long-term prospects for not only to protect existing equity, but to continue it pending 2023 and beyond. “
«Many new launches are being prepared across categories during the holidays. This is the silver lining that will drive consumption. Of course, the usual suspects for sales and mega-shopping festivals from Ecom or simple credit via Fintech or new launches will also be there to spice up the tastes, “he added.
According to Arora from 82.5 India, e-commerce marketplaces, launches of new cars, durable consumer goods, FMCG, games, food and drink, travel and tourism etc will be major users of the season.
Furthermore, executives suggest that advertising spending will be spread across the media and digital will play a major role. “The days when brands used to spend especially on festive advertising are long gone. They all spend money on digital, the use of money has become more democratized. In the old days, we used to go and present Diwali and Dussehra campaigns. Most of the spending happens on “end of season” or festive sales, which mostly happen digitally, “said Goyal.
Referring to similar views, Desai said: “Brands will continue to advertise, but media or media plans may change.”
Arora also said that there has traditionally been a higher bias in consumption of activities in the last quarter, and he does not see that changing.
He said that many customers are preparing for the holiday, helped by a cricket-heavy H2 and the World Cup as well.
“New business engagements are interestingly more strategic, rather than festive or tactical,” he added.
How will this holiday be for agencies?
Although the year started with a Covid horror, it must also be noted that the party season collides with the T20 Cricket World Cup for men this year. Therefore, agencies expect a remarkable boost from the holiday season this year.
Speaking about how H1 has been for them, Wadhwa said: “We had a good race overall and won some new businesses in 2022.”
“The first quarter was good, but we saw a decline in the second quarter, which applied to everyone. There is a general concern about inflation and that the value of the rupee is declining. The war has created many unforeseen problems. But we are hopeful about the holiday,” says Desai from Gray Group India.
It has been a promising H1 that shows that we can return to the original steps as a whole in the advertising industry. Digital is galloping and ATL is keeping a close pace. This is a period that can easily be called “Open” everywhere. Open touch points, open hearts and mind, open intention to explore – quite close to what life used to be before 2020. Still, it will not be a festive period of ruthlessness, but with responsible consumerism given real climate considerations, Srivastava said.
