MUMBAI: Long gone are the times when advertising and marketing industry in India was a small-scale business with just a few creative heads scratching their brains and churning out a minuscule number of campaigns. With the growing disposable income and aspiration to own premium goods and experience quality services, customers in India are willing to explore more, thus prompting sellers to market their products better.
2018 was, in many ways, a cornerstone year for brands and agencies alike as they tried to peg more and more consumers to their base. The impact of demonetisation and GST gradually faded, thus allowing the brands to spend more than the previous year on marketing their products. As revealed by Zenith’s Advertising Expenditure Forecasts, the ad spends for India in the year 2018 are expected to close at Rs 62,699 crore. This number is around 10-12 per cent higher than what 2017 saw. And 2019 looks even better. The same Zenith forecast reveals that total adex for India will see an increase of 15 per cent and climb up to Rs 72,169 crore in 2019.
As per Ethinos Digital Marketing MD Sidharth Hegde, most brands tend to spend between 7-15 per cent of their total revenue on marketing and advertising. “This percentage of spends is likely to continue, however, large brands are looking to insource a lot of the marketing and advertising that will help them save large amounts of funds that would now be going to external agencies,” he says.
Hegde also gives a breakdown of the expenses, “In 2018, the average firm was expected to allocate 42 per cent of their marketing budget to online, and this rate is expected to grow to 45 per cent by 2020. Social media advertising investments will continue to grow, with a 17 per cent compound annual growth rate from 2016 to 2021, and is expected to represent 25 per cent of total online spending in 2018. Investment in paid search, display advertising, social media advertising, online video advertising, and email marketing is predicted to account for 46 per cent of all advertising by 2021.”
It is clear from his predictions and is obvious otherwise as well, that digital is, in fact, seeing massive growth in India. Dentsu Aegis Network chairman and CEO – south Asia Ashish Bhasin seconds this thought and describes 2018 as the year that will be remembered as “when digital became an integral part of the marketing mix”.
Bhasin notes, “I think this (2018) was the year in which digital came to the forefront. From being a nice-to-have part of strategy it became an integral part of the marketing mix. This was partly helped by the JIO effect as it brought down the prices of data and increased the bandwidth available. Also, the falling prices of smartphones made it happen.”
He further adds, “And I take that by 2020, one-fourth of the advertising market will be digital. In 2022, the number of Indians reached by internet will nearly be the same as those reached by television.”
Mirc Electronics Limited (Onida) head of marketing Pratyush Chinmoy says, “One clearly visible trend (in 2018) was companies increasing their digital pie in the overall marketing spends, in recognition of shifting consumer touchpoints. Many industry leaders also saw impressive growth in video marketing, OTT media, with the consumer from all walks of life, consuming data at a much faster pace than ever before helped by telecom price decreases.”
But does that mean digital will overpower the other ‘traditional modes’ of advertising? Ashish Bhasin doesn’t think so. He quips, “When the tides are rising, all the boats rise along. In India, we are currently in a position where all the media are growing; be it print, TV, or digital, and it will remain so for the next 5-10 years. So, it is not digital vs print or print vs TV, or TV vs digital, it is digital and TV, and print, and OOH for India.”
An IBEF report also supports this claim of Bhasin. According to its September 2018 report on Media and Entertainment, in FY 2018, TV advertising was the largest contributor to the country’s advertising revenue, generating Rs 223.5 billion closely followed by print that generated revenue of Rs 210.6 billion. Digital advertising generated revenues worth Rs 116.3 billion.
Chinmoy also shares a similar brief based on some internal data, “In a period of Jan ’18 to Oct ’18, leading brands have spent around Rs 270 crore. Television has continued to gather a major pie, with print coming in second. In 2019, the spends are expected to slightly increase by a factor of 10-15 per cent.”
He also adds, “While OTT caters to a subset of the television audience with a different offering altogether in terms of content, it has still a long way to go to catch up with television spends.”
JHS Svendgaard Laboratories MD Nikhil Nanda adds an interesting insight, “As far as marketing trends are concerned, digital is growing fast but television and print still remain as traditional and dominant mediums. Content has been ruling the market and OTT. Disruptive marketing and radio are picking up faster than digital.”
N Chandramouli, CEO of TRA Research has the same input. He notes, “There is no TV or OTT for the consumer. They only know the screen. None of the advertisements in such platforms are getting consumed and only the skip button catches their attention. Smart brands are focusing on consumer basis for transactions and what urges it fulfils in them, rather than present product benefits. Brands must see it as an integrated consumer experience, not as how it is delivered.”
But Hegde differs slightly as he mentions that according to TDG Research, ad spend on OTT is projected to hit $40 billion by 2020, which is nearly half of the $85 billion in forecasted total TV ad revenue. “Also, with the influx of cheap and easily available internet, more and more users are bound to ditch the traditional TV for OTT services,” he says.
2018 was a grand year for many agencies as many national and international honours fell upon them, the grandest being creative and impactful campaigns that were churned out in the past year; the most impressive being Piyush and Prasoon Pandey getting the prestigious Lion of St. Marks honour at the Cannes. Yet the industry feels 2018 was not a very impressive year when it comes to creativity in marketing campaigns.
Chandramouli says, “2018 has not been an impressive year in brand creation. In the wake of a slow sales year, most of it has been attempts at selling. This, unfortunately, was based on a wrong premise because the consumer is dramatically changing. If you sell, they don't want to buy.”
Ashish Bhasin shows more or less the same emotion, “I think it has overall been a good year but not a great year in terms of creativity on TV because there haven’t really been any breakthrough campaigns that stood out at the national level.”
He adds, “I think this is because the creativity in digital has significantly improved and for digital creative films from India have been getting digital identification. I think the first example that is a big name is the ‘Powerless Queen’, which was done by WatConsult, which internationally won some 15-20 awards, which we really hadn’t seen earlier for a digital campaign. We have seen print campaigns win, TV campaigns win but I guess it is a sign of coming times more creative efforts will be put in digital and we will see more of that in 2019.”
Nikhil Nanda, however, differs in his observation. He notes, “Creatively, storytelling took the driving seat and advertisements showing the brand or products were more subtle. Whether it was an ad meant for digital/social channels or OTT alone, the more impressive the story, the better it was for the brands. Also, social causes and emotions took centre stage. Case in point: Colgate strong teeth campaign with Deepika Padukone and her mother. Campaigns in 2019 will be strongly inclined toward emotional and adopting better health habits storytelling.”
While 2018 was a pretty impressive year with its highs and lows, marketing agencies are now looking up to 2019 with a twinkle in their eyes. Big events like general elections and cricket world cup will be ruling the year and thus there will be a great influx of money as well.
Bhasin believes that 2019 will see around 12 per cent growth in ad revenues. He believes that India is all set to reach the $10 billion mark in advertising in the coming year. This sentiment comes after taking into consideration some facts. Bhasin notes, “Advertising is very susceptible to sentiments. If a stable government, which is considered pro-business, is in power then the sentiments of the brands and marketers improve. They tend to spend more. Otherwise, advertising is the easiest expenditure to cut. I am hopeful that we will show good economic growth and will have a good monsoon, so we have a good performance.”
While Bhasin is hopeful, Chandramouli sees 2019 as a difficult year for brands and marketers. He says, “2019 is a slippery year ahead, with brands not investing in new things. So, the way to go for brands is to understand the consumer basis for trust and their innate sense of desire. Other than a few who will stand out using consumer insights and buying propensity understanding, many brands will continue to waste their money on campaigns irrelevant to the consumer. Brands that only try to sell will not get bought. Those that help the consumer buy, will be loved.”
Another trend that might rule the advertising and marketing industry in 2019 will be of consolidations. Bhasin notes, “I think there is a process of consolidation that has started in advertising globally. We saw one of the oldest agencies JWT being merged into Wunderman this year. Even in India, there are six groups that control about 85-90 per cent of the advertising market. I see that this process of consolidation will only go bigger.”
He further adds, “The legacy agencies will come under pressure now. The groups that have been formed in the new age and are more digital-savvy, who have more proportion of the business coming from the digital will do well. Big names that have been in the market for 100 years will suddenly now start feeling the pressure and start feeling the heat. We saw the beginning of that in 2018, we will see more of that in 2019.”
All in all, 2019 looks like a great year for the brands and marketing agencies as it comes with its own shares of challenges and opportunities. The industry is very positive about the revenues but a little work on the creativity side is required to make 2019 a year better than the gone by.
Discovery was the first mover in bringing the best of non-fiction programming across genres like science,exploration,survival,natural history,sustainability of the environment,technology,anthropology,health and wellness,engineering,adventure,lifestyles and current events. Lately,the channel has expanded its portfolio to include reality television and pseudo-scientific entertainment.
With the digitisation wave in India,the channel has witnessed a shift in the audiences’ TV viewing habits. There is an increasing demand for specialised content,which in turn has created an opportunity for special interest channels. The other significant impact of digitisation has been a gradual demand for quality and localised content. “Infotainment channels like National Geographic are slowly but steadily commanding a much larger viewership pie compared to what they were commanding earlier. Competition is making sure that everyone has enough and more to keep the audience hooked on to TV,’ says National Geographic and Fox International Channels India business head Swati Mohan.
Travel XP believes in localising content for the Indian trade. “The sensibilities and requirements of the Indian consumers are different and so are the consumption patterns. Audiences have to identify with the content and we think local content is what they would relate to,’ says Travel XP CEO Prashant Chothani. The channel is aggressively investing in 4K and will be soon migrating its complete production from HD to 4K.
The newest player in town is Trilogic Digital Media and iTV Network’s Insight,which is a linear and non-linear channel. The channel is focussed on technology with an emphasis on showcasing talent to its viewers. It claims to change the ordinary television viewing experience and has a strategically planned line-up that will upgrade the level. “We are working towards taking the interaction and integration on TV to an entirely different podium globally. We are working on how the product is coming out and how will it work in the market,” says iTV Network MD Kartikeya Sharma.
“Subscription revenue is a contending contributor and a lot depends on the implementation of Conditional Access System (CAS) for this to become a larger contributor.Currently,the subscription revenue is in the range of 20-30 per cent overall and about as high as 35 per cent for infotainment at this point. Infotainment has higher reach through cable therefore,the implementation of CAS is critical for their overall growth,” informs Madison Media COO Karthik Laxminarayan.
