Mumbai: Ad spends during the festive season and the ICC World Cup have shown a significant uptick compared to the previous year. Brands are allocating more resources to both branding and performance marketing, indicating a more balanced approach to advertising. The revival of categories that were dormant during the past 18 months is particularly noteworthy. This festive season has witnessed the comeback of commerce, startups, FinTech, and even smaller brands.
TV advertising remains effective in reaching a wide audience, and the increased number of brands participating in these events bodes well for sustained growth. Overall, the combination of festivals and major sporting events is injecting vitality into the advertising landscape, with a positive outlook for future ad spends.
In this context, Indiantelevision.com spoke to GroupM India president – investments, trading & partnerships Ashwin Padmanabhan on the trends and the ADEX…
Edited Excerpts:
On this year being very interesting the festive season and the ICC World Cup after 11 years, how are marketers and brands seeing this
This year, there's a noticeable improvement in sentiment and spending on the ground compared to last year. This is evident in multiple ways. Firstly, the sheer amount of money being spent is significantly higher, even before the peak of the festival season. Secondly, the number of brands engaging in advertising has also increased compared to last year. It's worth noting that some categories that were dormant last year, like commerce, have made a strong comeback this festive season, driven by a festival-oriented approach. Many startups that were previously inactive have also re-emerged.
One notable insight is that many of these brands were conserving cash and focusing on performance marketing for the past 18 months. However, the challenge with performance marketing is that when you repeatedly target the same audience, the results and conversions tend to decline over time. The cost of acquiring customers keeps rising, and to address this, brands are now turning to branded campaigns to increase awareness and expand their funnel.
This shift towards branded campaigns has become more prominent during this festival season. Many brands that were previously not active in mainstream advertising have re-entered the scene across various categories. This includes FinTech companies, Liv space, payment apps, commerce platforms, and BFSI (Banking, Financial Services, and Insurance) firms, all of whom are now focusing on acquiring new audiences and converting them into customers.
Television advertising has also seen an improvement compared to last year, as it still effectively reaches a large and diverse audience in India. In summary, this festive season is showing positive signs, and the ICC World Cup this year is a significant improvement over last year's edition, which was largely impacted by reduced spending. Unlike last year, FMCG (Fast-Moving Consumer Goods) brands are continuing to invest in their advertising during the festive season. It remains to be seen how this will reflect in overall growth compared to last year, but the signs are encouraging. This shift towards more branding and advertising is not solely due to the festival; it's also a recognition that engaging with a broader consumer base is essential, beyond just performance marketing.
On doing performance-related spends to brands realising that TV also plays a very important role in India
Brands have long been aware of the importance of television (TV) advertising, but the TV landscape has evolved considerably. When we talk about TV today, it's not just about traditional cable and satellite broadcasting. It also encompasses the diverse ways content is delivered to television screens, such as streaming through the internet or broadband connections. This expanded perspective on TV recognizes that many viewers have moved away from cable and satellite subscriptions.
TV remains a significant platform for reaching audiences, and its relevance is expected to grow further. What's changing is how content reaches viewers and the nature of the audience itself. In the United States, for instance, people no longer differentiate between TV delivered through cable, satellite, or the Internet. This trend is expected to accelerate with the increasing penetration of broadband, especially with the launch of 5G Home by companies like Airtel and Jio.
The evolving landscape also offers viewers more choices. You can have a single box that provides both internet streaming and traditional satellite channels, making measurement more uniform across linear cable channels, video-on-demand (VOD), and digital linear channels. This transformation in TV consumption is intriguing and signifies that TV is here to stay, but the way we consume it is changing.
While over-the-top (OTT) platforms are popular, it's essential to note that linear TV is also shifting towards internet consumption. For example, many news channels now live stream on platforms like YouTube and devices like Samsung TVs, allowing viewers to access the same live content via the internet, bypassing the need for traditional satellite or cable distribution. In essence, the TV audience will continue to grow, but the means by which content reaches them are evolving.
On the outlook for the third quarter and the final quarter in relation to ADEX and will the spends continue as the IPL will start at the end of March
The Indian Premier League (IPL) is set to kick off towards the end of the last quarter, and it will undoubtedly attract significant advertising spends. What's encouraging is the ongoing trend of brands and clients returning to branding-oriented advertising rather than solely focusing on performance marketing. I believe this shift is likely to continue, indicating that many brands that have started spending during this festive season will maintain a presence. While they may not invest in advertising all year round or even for half the year, they will likely allocate budgets for three to four weeks each quarter. Their approach will be strategic, but they won't completely withdraw.
Will we revert to the situation we had in 2021? Definitely not. Instead, we can expect a more sustainable and predictable pattern of spending, with more brands participating. Even smaller brands are showing the ambition to invest in prominent properties like cricket and live sports. This is evident from the IPL and the World Cup, where numerous regional, SME, and SMB brands have stepped up their investments in cricket. It's a positive sign, as it means these brands are willing to allocate incremental advertising budgets, exceeding what they were accustomed to spending. This trend from the festive season is likely to carry over into the fourth quarter. While Q4 typically lacks major festivals, there are still occasions like Pongal and Baisakhi, and before we know it, the IPL will be back. So, except for a potential brief slowdown in mid-February, I anticipate that January, February, and March of 2024 will be even better than 2023 in terms of advertising activity
On planning for a client, is the spend allocation geared toward TV + Digital or pure digital and does it depend on the brand TG
Our approach to media planning doesn't begin with a predetermined allocation of funds to TV, digital, or any other channel because each agency within our group, including Mindshare, Wavemaker, and Essence Media, has its own unique strategy. Instead, we start with the brand's objectives, considering both branding goals and business metrics, as well as the type of consumer engagement we aim to achieve.
In today's complex media landscape, media planning has become intricate and lacks a one-size-fits-all solution. There is no single source of truth that can guarantee specific results for a given budget. Therefore, we focus on a holistic approach. Digital, for example, encompasses various components, such as social media, retail media (commerce), and search advertising, each contributing to different outcomes, often tied to performance goals.
When it comes to television, we have the added complexity of over-the-top (OTT) platforms, which resemble traditional TV but offer diverse targeting options across different devices, with mobile being a significant channel. Our approach also considers streaming audio, each with its unique measurement systems.
To begin, we ask fundamental questions: Who is the target audience? Where can we find them? What are the campaign's objectives? Is the aim to drive immediate consumer action, which can be quantified, or is it about building awareness and excitement around the product or service?
Strategic media planning now involves addressing these intricacies. It's not about immediately deciding to allocate funds to TV, digital, commerce, or search. Instead, it commences with a thoughtful consideration of these critical questions.
On the measurement of digital
While we may not have a third-party audience system, we do utilize third-party trackers and tracking systems that serve crucial measurement functions. These systems help us assess several key aspects. First, we can determine whether the audience we're reaching is genuine or if it consists of fake impressions generated by bots or other simulated means. Additionally, we use systems to ensure brand safety by monitoring whether our content appears in a secure environment, preventing it from being displayed alongside objectionable content.
These tracking systems also enable us to measure impressions and can support compensation models based on targeted impressions. Many of our larger clients insist on compensating only for impressions delivered to their desired audience, which requires the use of these third-party systems to exercise control over our ad investments.
Moreover, due to the digital nature of advertising, we can establish a feedback loop that connects our efforts to tangible business results. This means that, beyond audience metrics, we can measure the impact on business revenue and the generation of sales leads, which are vital indicators of our investment's effectiveness. Performance advertising, in particular, centers around these business-focused metrics.
In sum, managing digital advertising is not a straightforward process. It involves employing multiple tools and collaborating with numerous partners to fulfill our clients' objectives. While it presents its challenges, it is certainly achievable and offers a wealth of opportunities for delivering on client expectations.
