With sentiments high, digital players expect bumper growth during Diwali

With Dussehra/ Durga Puja just over, brands and marketers are now looking at a bumper time during Diwali, just a couple of weeks away. At Adgully, we have been tracking the industry sentiments around festive season this year. After scanning the broadcast, print and radio sectors, we now turn the spotlight on digital and the spends and sentiments around the festive season. 

Despite challenges around standards, measurement and supply chain integrity, digital advertising continues to grow rapidly as marketers follow consumers to the media destinations where they spend their time, and increasingly transact for goods and services. As per GroupM’s ‘This Year, Next Year’ report, digital investment has already surpassed TV in 10 markets (Australia, Canada, China, Denmark, Finland, the Netherlands, New Zealand, Norway, Sweden, UK) and another five will cross this bar in 2017 (France, Germany, Ireland, Hong Kong and Taiwan). 

“Google and Facebook attracted the vast majority of incremental digital ad investment growth in 2016,” said Adam Smith, Futures Director. “In 2017, the industry will be watching closely to see how Snapchat or Amazon may creep into Facebook’s and Google’s value chain.” 

According to a joint report by the Internet and Mobile Association of India (IAMAI) and Indian Market Research Bureau (IMRB) Kantar, India’s digital advertising expenses is expected to reach Rs 9,700 crore by the end of 2017. With businesses, especially in the e-commerce sector, relying heavily on ads to acquire customers, the segment is expected to grow at a compound annual growth rate (CAGR) of 33 per cent. 

Positive Sentiments 

The big boys of e-commerce – Amazon, Flipkart, Shopclues, Snapdeal; even newcomer Paytm Mall; fashion portals Myntra, Ajio, et al, have gone for the festive season with all guns blazing. 

Commenting on the response received so far for the various festive season initiatives, Ravi Arun Desai, Director, Mass and Brand Marketing, Amazon India, said, “We are humbled by the massive customer interest in Amazon’s Great Indian Sale, and are excited over the new benchmarks set for daily units, cashless payments using Amazon Pay, and Prime with each sale event. In an industry that is reportedly flat or negative, Amazon India has continued to show remarkable growth of 124 per cent YoY in 2016, leading the industry on how e-commerce can be a part of customers’ daily lives across categories, from mobiles and large appliances to consumables and everyday essentials.” 

Amazon is now all set for the Big Indian Sale starting October 4, 2017. Bullish about the festive road ahead, Desai said, “We expect more customers joining the digital ecosystem and shopping with us during this festive season. With expanded selections and a robust logistical support system, we are ready to handle the massive customer traffic that we are bound to receive this season.” 

“India is a land of festivals where there is celebration and enthusiasm across the country throughout the year,” noted Kishore Mardikar, Chief – Brand Marketing and Institutional Sales, Tata Cliq. He added, “This year, Tata Cliq is celebrating its second festive season. Our focus this season is to cultivate a strong relationship with our customers and be an integral part of their festive celebrations. Throughout the season we would like to offer the best and curate brands across categories to delight our discerning consumers.”  

Given a brand’s perspective, Ritu Gupta, Director, Marketing, Consumer & Small Business, Dell, India, remarked that the overall market sentiment has been positive, with steady demand from consumers in the category, as they recognise and accept the various ways in which technology is woven into their lives. “In order to leverage this positive sentiment with dedicated investment for festive season offerings, this year will see an array of grand consumer offers for Dell on the entire range of Inspiron notebooks, desktops, all-in-one’s and gaming PCs,” she added. 

Burgeoning Ad Spends 

For this festive season, Dell is reaching out to consumers with its diverse consumer offerings via print, outdoor, digital advertising and activations. “We are very excited to be unveiling a brand new range of devices for consumers at the onset of the season, giving our consumers a wider range of products to choose from,” said Gupta. 

As a prelude to the festive season, Tata Cliq launched the Autumn-Winter 2017 collection of some of the best brands. Titled ‘Cook the Look’, the collection showcases cross-brand curate looks that are ‘ready to buy’. “We have planned more such initiatives that will lead to the grand festive celebration,” informed Mardikar. 

Meanwhile, as informed by Harneet Singh, Head - Marketing, ShopClues, the e-commerce player is looking at a 50-70 per cent jump in the transaction rates during the Diwali-Dussehra period. “We expecting good growth over last year and also expect Diwali to be bigger,” he added. 

 

 

Dissecting the spends factor, Santosh Mishra, Branch Head – North, iProspect India, said that if one looked at the entire Indian economy, the major contribution of ad spends has been on television. He further said, “When we compare this year with last year, there are no major transformations in ad spends. Till 2015, 41 per cent of the entire media share was being spent at TV, whereas Digital was second with some 12 per cent, OOH contributed 6 per cent, and radio and cinema had 4 per cent and 1 per cent, respectively. As per current media trends, digital, which is at 12 per cent, will double to around 24 per cent. On the other hand, Print will see a little lower ad spend of around 21-22 per cent.” 

The Revenue Factor 

This festive season, Tata Cliq is working towards sustainable profitable growth and its spends are in line with consumers’ demands. 

Amazon, too, is aiming to increase its reach and serve more customers across the country, while making online shopping a daily habit for Indians. Desai said, “We are not metro-focused. We go where our customers are and hence, have ventured even to the hinterlands of the country – widely covering Tier 2, 3 and below geographies through advertising.” 

Dell India’s Gupta observed that the scope for festive buying has evolved with technology becoming an indispensable part of consumers’ lives. Now more than ever, consumers look at the auspicious buying season as the right occasion to bring home the gift of technology, as people use personal technology to bridge distances and make celebrations special. “Additionally, as the environment becomes increasingly digitalised, consumers see PCs as the ideal gift in the form of a tool that aids and individual’s growth and productivity, and acts as a digital companion,” she added. 

Kabir Kochhar, Managing Partner and Business Head at The Glitch, Delhi, added here, “For many advertisers, the first half of the year has been dismal and now is their opportunity to turn their year around. Love it or hate it, Jio has been the single biggest contributor to ad spend growth on digital. It sparked a massive price war in the telecom sector, which has now resulted in the average data consumption per customer shooting up from 1-2 GB to 6 GB. This means exponentially more ad consumption on digital. This, combined with the pressure to make up for lost sales due to GST, have advertisers raring to go.” 

He further added, “Google (+YouTube) and Facebook (+Instagram) will command a lion’s share of spends as brands fight it out for maximum share of voice in a cluttered environment. YouTube usage for the quarter ended June 2017 grew by 150 per cent from the same time last year. Times Internet, with their impressive array of lifestyle properties, will sell high impact properties. Mass platforms such as UC Browser and regional content players such as Dailyhunt will benefit from the massive number of new users on the internet thanks to Jio.”