This is the time for media companies to link their platforms together, think out of the box and really focus on value instead of volume
From a big picture perspective, IPG Mediabrands’ India CEO, Shashi Sinha, believes that 2021 will entail advertising expenditure (AdEx) growth. However, there are several areas of concern that mark this expectation.
“For starters, AdEx growth will depend on how much, and how fast, India’s GDP grows. Broadly, AdEx tends to be double GDP growth. While we are already seeing some positive development on this, I would still say we remain cautious. From the sheer industry sentiment, there is pressure on marketing spends as large companies are recalibrating their expenses. The first quarter of 2021 will not be an easy quarter for the industry,” explains Sinha.
From a sectoral standpoint, Sinha believes that the likes of Consumer-Packaged Goods (CPG) and FMCG will come back. Similarly, food companies and health business will continue to do well. Younger sectors such as e-commerce will continue building momentum as well. “I am more hopeful for the likes of the auto sector and BFSI to come back. The signs are positive for these sectors, and I do think they are under-leveraged at the moment too. If some of these sectors begin responding, AdEx should show positive shift in 2021,” Sinha observes.
Sinha also pointed that while some sectors such as hospitality, travel and the likes will keep switching the game to keep their consumers engaged employing more enhanced forms of customer relationship management or loyalty programmes, the smart marketers will always find ways because to connect with consumers, who are now ready to spend.
While on the one hand, there is pent-up consumer demand that should play a role in fuelling the ad ecosystem, on the other hand the sheer under-indexing of the India media industry continues to pose a problem, according to Sinha.
“The India media players are constantly battling challenges of growing the value of the media industry itself. The competitiveness in the market does not make this easy. Now, with the rise of newer forms of media, and the address constraints in spending, downtrading is already a major problem for media businesses,” comments Sinha.
Sinha advises media companies to innovate in their conversations with marketers and agencies. He says, “Sometimes, I wonder if media companies are packaging their proposition well. There is such ingenuity there, but I find holistic solutions missing. The current times mandates television with digital or print with digital. I do not mean simply selling these options together --- that is the most basic approach to take. I mean this more from finding engaging conversations with consumers, that has credibility, reach, communication power, the strength of distribution and carry it forward. This is the time for media companies to link their platforms together, think out of the box and really focus on value instead of volume.”
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