How advertisers are moving towards 'the digital space' during economic slow-down
Anuj Kumar, Executive Director (South Asia), Affle
When the economy is booming, most marketers are always bullish on long term growth prospects and hence those times are the best for them to experiment with any new and growing media opportunity. Such was the trend observed in India too till a few months back, when it seemed that the India growth story was so strong that nothing could go wrong with it.
However, the current slowdown has made of a lot of people re-think their strategies including the leading marketers and advertisers in India. Advertisers today are seeking a lot more accountability on every ad dollar they spend such that they could maximize the returns in the short term without compromising on the long term benefits of brand building. In such a scenario it could be expected that a large share of the traditional media spends would get diverted to digital media given the measurability associated with this medium. However, this is not a uniformly observed trend even though some leading advertisers are definitely altering the split of their spends in favour of digital media. In the current scenario it is easy to classify Indian advertisers in three broad categories:
The Believers
Characteristic: The Target Audience for these advertisers are consumers of digital media, and the advertiser has had prior positive experience of advertising on digital media.
About: This category of advertisers are significantly altering their media spends to ensure that they can maximize the ROI from their ad dollars in these times. Given that these advertisers have seen gains from digital media earlier, it is a comparatively easier decision for them to put a larger proportion of their ad spends now on digital media. Most advertisers in the Banking & Financial, Automobiles, Consumer Electronics, Retail categories would be part of this category. The huge gain for digital media in these categories is expected to come at the cost of all traditional media formats.
The Laggards
Characteristic: The Target Audience for these advertisers are consumers of digital media, but the advertiser has historically not invested in Digital Advertising.
About: This category of advertisers should ideally focus a lot more of their marketing budgets on digital media in these times, but the same is not expected to happen in the coming few months. This is because most advertisers in this category are comfortable in doing what they know best and times of slowdown mean minimal experimentation times for them. These advertisers are thus not expected to put more monies on digital but would instead buy a few lesser ads on TV and Print. Media Agencies play a very important role to convince these advertisers to go digital as it makes imminent ROI sense and inertia is only factor which works against it. The fear on unknown in these cases overpowers the potential gains from it.
The Curve Jumpers
Characteristic: The Target Audience for these advertisers are not users of the internet, and hence a large part of traditionally defined digital media (i.e internet) may not work for them.
About: Most mass based FMCG kind of advertisers amongst others would fall in to this category. Their reasons for not using internet advertising are obvious. However the increased options available on mobile marketing are likely to lure them towards this new format of digital advertising in these times. Most existing advertisers evolved from investing on traditional media followed by the internet and then the mobile. However, this category of advertisers is expected jump this evolution curve, and get on the mobile advertising bandwagon much prior to having their first significant experience on internet advertising.
Overall we see the market as being a mix of all three categories of advertisers. However given the larger proportion of Believers and Curve Jumpers, we would estimate the growth rates of the digital ad market to continue as per the last few years and not get impacted by the overall economic slowdown. The largest gainer is expected to be mobile advertising as we expect it to grow by over 50 per cent in this year.
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