Digital Ad Spends Quickest To Recover Post Lockdown

The lockdown in the nation has provoked advertisers to make cautious expenses towards advertising their products, but as Unlock 2.0 unfolds in India a spike in Advertisement can be very well witnessed in the market. Digital medium saw a huge recovery and marketers have started prioritizing selling over their budget. A report shared by TAM AdEx says that digital advertising got a spike in June 2020, which is higher than what the market had witnessed from January 2020 to March 2020.

“Numbers started coming back in May. May saw 40-50% better numbers than April when it comes to ad spends, and June is better than May lead by performance spends coming back faster to digital,” said Gautam Mehra, Chief Data Officer (South Asia) and CEO of Programmatic, Dentsu Aegis Network.

Platforms such as Google and Facebook have made good business with the comeback of 70-80% of their revenue mainly from ads in the month of June-July in comparison to data from the same period the previous year. Among the sectors who tops the list when it comes to performance marketing are BFSI, OTT players, gaming entertainment players and edutech companies who are doing their best in the digital medium

Mehra remarked that the overall market optimism along with good performance in the stock market is playing an important role in bringing back their clients as well as their ad budget. “Plans that were parked out are being dished out and activated. While brand spends are always discretional, performance spends have come back almost entirely,” he said. The digital advertising scenario saw a change in phases through the lockdown and now in the period of unlocking, say experts.

“Most campaigns across most sectors went on pause, so the ad spend data is limited. However, in lockdown1.0, we saw a significant drop in CPMs (cost per thousand) for those that didn’t pause – almost 30% drop in some cases. These have gradually normalized to pre-lockdown levels. So Google now being back at 80% of revenues seems to actually be the case,” said Siddharth Devnani, Co-Founder & Director at full-service agency SoCheers.

The first notable comeback from e-commerce companies – both marketplaces and D2C brands  was noticed when they started to closely keep a check on the restrictions that were imposed for their courier and delivery services. 

The market behavior is now such that almost every sector is planning a comeback journey especially FMCG and consumer durables, except a few who are related to event organization.
So, now the question arises,  why is the advertising space giving prime importance to performance marketing?
“Today brands have become more prudent while defining a campaign, its objectives, the size, and the budgets. While initially, brands continued to spend for visibility, with the pressure increasingly shifting towards revenue generation, the entire focus moved on to performance marketing which is purely ROI driven,” said Manish Solanki, Co-Founder & COO, TheSmallBigIdea.

The industry now records, the biggest ad spenders are from FMCG, e-commerce, OTT, and insurance sectors. The  insurance sector with the motive to grab a good business has continued its spending even in Q1 with a clear aim to earn a good return on its investment.
“Our partner clients from the entertainment and e-commerce sectors to are gradually increasing their ad spends with the sole objective of reach and top of mind recall along with a focus on ROAS,” Solanki said