Advertising sentiment remains subdued during festive quarter shift to ecommerce gains momentum

Sandeep Goyal, chairperson of advertising agency Rediffusion, noted the current advertising landscape's relative quietness: "Apart from Flipkart's Big Billion Days, there are no major campaigns taking place this time. The recent events in Kolkata (of the RG Kar Hospital rape and murder case) have also had a significant impact, leading to a noticeable drop in advertising expenditures during Durga Puja. Moreover, car sales, which usually see a boost during festive seasons, appear to be subdued overall."

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Ashish Sehgal, chief growth officer, digital and broadcast revenue, ZEE, echoed the subdued sentiment, highlighting the shift in advertiser priorities. "There's a noticeable shift in how advertisers are spending—more money is being directed towards sales-driven campaigns rather than brand-building initiatives due to P&L (profit and loss) pressures. Quick commerce, e-commerce, and point-of-purchase activations are receiving the bulk of the investment."

Sehgal also pointed out that while FMCG remains the biggest contributor to advertising, their spending is closely aligned with the purchasing cycle, resulting in restrained ad spends this season.

A few larger campaigns are visible, such as those from Tanishq and Cadbury Celebrations. However, many other brands, like Zepto and Blinkit, are opting for digital advertising. Hema Malik, chief investment officer at IPG Mediabrands India, said that the sentiment is lukewarm, with many firms facing P&L pressures and the absence of major events such as the ICC World Cup. She said that the current ad expenditure levels are far below those seen in the same period last year. “Companies seem to be holding onto their budgets. For sectors like automobiles, which saw a significant peak in 2021, they are now only advertising when they have new launches as many have piled-up inventory." She expects quick commerce firms to continue leveraging the season, with many launching digital ad campaigns. “They will maximise every occasion."

“Women’s cricket has also not generated much enthusiasm with advertisers. Ad inventory will get absorbed across most platforms—general entertainment and news—but the demand will remain normal. There will be no premium coming out of this festive quarter, even though this period typically features many regular and impact shows," she said.

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Sehgal added that the rural economy's slow recovery is further impacting the overall market growth. "An underlying factor affecting the market is the slow recovery of the rural economy. Growth is closely tied to the rural sector, and without a strong rural pickup, overall market growth will remain subdued."

While television ad inventory is selling out, Sehgal attributed it to price cuts. "Television advertising inventory is selling out, primarily due to a 7-10% drop in price points, making it more accessible." He also highlighted the regional variations in ad performance: "Regional markets like the South are seeing growth, with high content consumption and a strong response to ads. However, in the North and West—regions that account for 55% of the market—we're seeing a decline. The rural belt is particularly affected, and without significant recovery, overall growth remains limited."

IPG Mediabrands put out a report earlier in the year, estimating that while the industry would see growth, it would be nearly flat compared to 2023’s ₹1.1 trillion (£13.1 billion), reaching ₹1.2 trillion (£14.6 billion) in 2024. Although this figure is 50% higher than pre-pandemic levels, print, radio, and cinema are still lagging behind 2019 numbers.

Tanmay Mohanty, CEO of media services at Publicis Groupe India, anticipates that FMCG, retail, and automotive advertising spend will slightly improve, particularly targeting key events such as Navratri, Diwali, Black Friday (which marks the start of the Christmas shopping), and Christmas, though this growth may predominantly occur on digital platforms. “We will see a noticeable rise in Connected TV (CTV) ads as brands aim to engage with consumers through more visual content," he said. Mohanty highlighted that the festive season typically contributes 20-25% of annual revenue for e-commerce, with digital ad spending expected to increase by 15-20%. He added, “The demand for CTV advertising is expected to grow by 25-35%, indicating a shift in how brands connect with audiences."

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According to Mohanty, Indian brands often use cultural narratives to build emotional connections with consumers, unlike global brands that typically opt for multi-channel marketing. “Brands will leverage data analytics to personalise experiences and enhance engagement levels, with technologies like augmented reality (AR) further boosting festive advertising," he explained. This week, FMCG giant Dabur signed Sourav Ganguly for its Chyawanprash brand, launching its first regional AI-led marketing campaign for Durga Puja.

As the festival season progresses, some newer categories are expected to tap into the available opportunities. Brands such as Nykaa, Domino’s Pizza, Oppo, and Godrej & Boyce are using digital ads, while others like Royaloak Furniture are launching multi-channel campaigns. Royaloak, which operates over 200 stores, has launched its first 360-degree campaign. Founder Vijai Subramaniam told Mint that the company expects a boost in walk-in customers. The TV ads are currently running on general entertainment and regional news channels, with a significant push on digital media as well. Tata-owned Tanishq has also launched its festive campaign, Nav-Raani, produced by Lowe-Lintas, which celebrates modern-day 'Queens'.