What’s in an Advertisement? A lot!

What’s in an Advertisement? A lot!

What’s In An Advertisement? A Lot!&nbsp | &nbspPhoto Credit:&nbspThinkstock

Key Highlights

  • Covid Has Caused A Disruption Like No Other To Media & Advertising Industry
  • The Supply-Demand Mismatch Is Likely To Result In A Huge Reduction In Ad Spends
  • Advertisements Reveal Much More About The Times That They Are Being Credited For

One of the popular assessments after the lockdown due to Covid-19 is that the media industry could thrive as people will consume sitting in the comfort of their homes. But the assessment has turned out to be only half right. The consumption rose in some forms of media like TV, while it fell in others like Print. Even this mismatch in consumption does not tell the whole tale.

The full picture of the covid jolt to media industry and the behavioral patterns cannot be understood with out delving into the small matter of ‘advertisement’!

Top Advertisement Spends (Across TV, Print & Radio)
April-May 2019

April-May 2020

Segment Spend Segment Spend.            
Auto-cars Rs. 761 Cr Social Media Ads- Govt Rs. 338 Cr
Smart Phones Rs. 671 Cr E-com-media/ent/Social media  Rs. 285 Cr
Perfumes/deodorant Rs. 416 Cr Toilet Soaps Rs. 172 Cr
Political Ads Rs. 413 Cr Publications/books Rs. 171 Cr
Education courses Rs. 367 Cr Social Ads-NGOs Rs. 147 Cr
e-Comm -wallets Rs. 366 Cr Tooth Pastes Rs. 113 Cr
Auto-two wheelers Rs. 360 Cr Washing Powders Rs. 93 Cr
Soft Drink Aerated Rs. 321 Cr Education-ecom Rs. 78 Cr
Pan Masala/ Gutka Rs. 315 Cr Toilet Cleaners Rs. 77 Cr
Air Conditioners Rs. 308 Cr Milk Beverages

Rs. 77 Cr

Source: MediaCom

Behaviour-Cost Mismatch

Covid-19 has changed ‘Advertisements’ and their ‘Costs’. Enter the third variable ‘Behaviour’. Together these three factors were derailed by the Covid disruption like never before. According to BARC & Nielsen, five weeks into the lockdown, TV viewership grew 40% when compared to pre-Covid levels. According to market research firm emarketer, Indians, on an average, are likely to spend 3 hours and 10 minutes of their time every day on TV alone this year, 5 hours and 24 minutes across all forms of media (22.5% of a day). But the rise in consumption during the lockdown does not translate into good news for media, certainly not all forms of media.

Reports say that print ad expenditure, as well as radio ad expenditure, are likely to be 25-30% lesser than pre-covid estimates for 2020. The next question in this sequence is – What happens to TV/Digital media?

‘This will take a huge time to bounce back and our estimates are saying that by the end of this year, assuming Q3 and Q4 are as much as 2019, what we are saying is that we could see an almost 20% drop on the overall media spends as compared to 2019’, said Navin Khemka, the South Asia CEO of Marketing and Advertising company MediaCom, to ET NOW earlier this week.

Demand Thy Name

The market is soft, there is no supply issue from a media inventory point of view, the consumption is normalising, as such, it is even higher than usual, but there is a missing link. ‘Demand’. For months, every sector has been shut down curtailing the production. While rural demand is showing signs of rapid recovery, media consumption in India is still led by top 20-25 cities in the country. ‘Pretty much, they (top 20-25 cities) have to come back to normal for us to be able to see a spike in advertising spends again’, said Navin Khemka.

Behaviour-Advertisement Match:

In a nutshell, the crisis reflected in the consumption and hence the advertisement. Thanks to the Covid lockdown and the consequent postponement of IPL, the typical summer category & IPL brands went missing and this resulted in an entirely different set of advertisement categories coming to the fore. Essential commodities topped consumption baskets, they were bought in a hurry and they were/are being advertised. It’s the hegemony of essential categories/products this summer.

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