By Mr. Amitt Sharma, CEO & Founder of VDO.AI- : The pandemic is seeming to be behind us. Though it hasn’t really disappeared, a slight ray of hope and safety has emerged from the talks of a vaccine soon becoming available as a cure for it. The effect of the prolonged lockdown has impacted economies across the globe with India being no exception to it. In fact, for an economy which was already reeling under fiscal pressures, the pandemic and resultant lockdown only exacerbated things further. That however seems to be changing slowly and economic growth is limping back to some extent.
To put things in perspective, look at the dismal performance of the economy in Q1. GDP contracted by a whopping 23% in the June quarter of FY 21 after having expanded by a not so impressive 3.3% in the last quarter of FY 20. With the first two quarters being wiped out, the third quarter numbers are only marginally good compared to the first two. The GDP reportedly shrunk by 7.5% between July and September, compared to the same quarter a year before. This was much lower than many predictions.
In fact, last year, GDP in Q3 had expanded by slightly more than 5% in FY 19 and 4.6% in FY 20. The prolonged lockdown which completely shut down economic activity was expected to have a paralyzing effect on the Q3 GDP growth too. Even if it hasn’t been that way, growth still seems to be elusive and only limping back.
A depressed economic growth has an all-pervasive impact on sectors, whether primary or tertiary. The advertising sector too has taken its fair share of hit. Most of the festive season in India this year has been under the shadows of the pandemic. Bigger festivities have been a complete washout with Diwali being only slightly better. But the oncoming Christmas and New Year provide a glimmer of hope especially in the light of the improving economic sentiment.
With the world slowly opening, demand during Christmas and New Year is likely to see advertisers spending increase, trying to cover up for what was lost during the lockdown. A paradigm shift in the overall marketing scenarios following the pandemic will obviously need a change in advertising strategies, creatives and mediums. This too is likely to bode well for the advertising world.
What will drive advertising going forward
A slight uptick in activity, a lower spread rate of Covid – 19 will help in maintaining the momentum going forward. The focus now shifts on Christmas and New Year festivities which were kicked off with Thanksgiving towards the end of November.
One factor that will drive demand from consumers is the very fact that across the board they have been weary of spending big and focusing on saving in a scenario where job losses and pay cuts have been bothering them. Targeted advertising towards the consuming class will hence drive the fortunes of the industry over the next couple of months until New Year and beyond.
The large middle and upper middle-class consumers are key in the Indian context. This is exactly the layer of society which has been able to weather the economic storm of the pandemic to some extent. With salary structures crawling back to normal, spending habits too can be expected to return to pre-Covid levels.
In a changed mindset that we are presently living in, fine tuning advertising to the temperaments of consumers will become essential. While products suited to the changed environment, where safety takes precedence over all else will be in demand, pricing will be the next crucial element to target consumers.
While a bumper season is not what it looks like, a rejuvenated spirit among advertisers will surely buoy up spirits keeping them high enough to be prepared for a better festive season next year. After all hope is the only reality!
