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Slowdown to take fizz off this festive season

With broad macroeconomic sentiment still quite subdued, there is a sense of cautious optimism pervading across sectors, says Sankalp Saini

Published: 28th October 2012 10:04 AM  |   Last Updated: 28th October 2012 10:07 AM   |  A+A-

It is that time of the year again when all and sundry gear up to loosen their purse strings while brands and advertisers ramp up their marketing and promotional activities to engage more with customers. The three-month period beginning from October and ending with the New Year is the most keenly awaited period for the trinity of consumers, advertisers and brand managers. Starting with Dusshera and going uptil the New Year, the October-December quarter is the time when brands across categories splurge on advertising, trying to get the maximum bang for the buck.

In a country like India, where consumers’ buying decisions are heavily influenced by emotions and important occasions, the festival season is a reminder to advertisers that they need to put in that extra effort so as to entice customers into buying products. Festivals provide companies a good opportunity to not only reconnect with their existing customers but also try to make new ones.

From innovative advertising campaigns revolving around festivals to special offers and discounts, advertisers in India have traditionally earmarked a major portion of their advertising budgets during the fourth quarter of the year. In fact, nearly 25-40 per cent of a brand’s total expenditure on advertising and promotions is done during the last quarter of the year. In certain cases, ad spends during festival season can go up by as much as 20 per cent.

The situation, however, on the ground this time around is quite different for both brands and consumers. With the broad macroeconomic sentiment still quite subdued in the wake of economic slowdown and inflation that shows no signs of abating, there is a sense of cautious optimism pervading across sectors with marketers too adopting a slightly conservative approach on advertising and marketing activity. 

 “Across the board there is a drop of over 10 per cent in ad spends. The decline is very much across categories,” says Shripad Kulkarni, Chief Executive Officer, Allied Media, the media planning and buying division of Percept Limited.  While corporates that already have earmarked ad budgets for different media vehicles continue to spend, albeit cautiously Kulkarni feels that the slowdown has impacted advertising in print more than television. “The bigger worry is that post-festive season, we will see a bigger drop (in ad spends),” he adds.

The recently concluded Durga Puja pandals dotting the city scape in Delhi also bore the brunt of indifference among the sponsors because of the economic downturn and the poor business sentiment. Most of the public sector undertakings or multinationals always found Puja pandals as an apt place to advertise keeping in view the huge footfalls but this time even the Gods had to go without much of sponsorship like yesteryears.

“We had significant number of corporate and PSU sponsorship in the last three years, and we had scaled up  keeping in view the response from them. But this year, it was a complete wash out as against seven big sponsors we did not even have one, not even one big corporate sponsor this year. Probably because of the economic slowdown even Ma Durga faced the heat,” said an office-bearer of one of the most prominent Chittranjan Park Puja Samiti.

The Puja Samiti had during the last few years had  platinum, gold and silver sponsors but this year since the mood was so subdued all sponsors were in the same category. Huge signboards of sponsors did not greet the devotees as was the practice earlier. Instead signboards were replaced by fine folk art from West Bengal.

Traditionally, festival season around Diwali sees high spending on promotions and marketing activities by FMCG companies, consumer durable makers, developers etc. It brings good tidings for consumption-driven companies as the rise in demand due to festivals boosts bottom lines. From free 50-gram gold coins to offering international family vacations and the latest mobile phones, consumers are spoilt for choice during special promotions around Diwali and Christmas.

Undeterred by the slowdown, big advertisers like Samsung, Videocon and Sony maintain that while they have not hiked ad spends dramatically for the upcoming festival season, they have not curtailed it significantly also. Targeting around 25 per cent sales growth during the festival season, consumer electronics and durables major Samsung India has launched print ad campaigns revolving around offering gifts on the purchase of audio visual and home appliances products. “We are looking at a more effective campaign that will give us the desired boost in sales of more than 25% this festival season,” explains Mahesh Krishnan, Vice-President, Consumer Electronics Business, Samsung India.

With an advertising and marketing budget of `150 crore earmarked during September-November period for various above-the-line and below-the-line activities, Sony India is betting big on the festival season. “Marketing is a very important aspect of Sony’s business operations and Sony continues to invest heavily on its marketing activities. Sony India plans to enhance its presence through innovative offerings and strong product line-up,” says Tadato Kimura, General Manager - Marketing, Sony India.

On the other end of the spectrum are advertisers like Nokia who have traditionally been high on ad spends during festivals, especially Diwali. While a Nokia India spokesperson accepted that the ad spends on print has gone down, they are banking on television commercials as they give more visibility for their products. 

Panasonic, which recently forayed into the water purifier segment, is keeping its ad spends for the festive season at around the same level as last year. 

“Panasonic has earmarked Rs 100 crore for brand positioning and marketing activities during the festive season this year, which includes Rs 25 crore for brand positioning through television. Last year also during festive season, Panasonic had invested similar amount on its advertising and marketing activities,” says Manish Sharma, Managing Director, Consumer Product Division, Panasonic India.

Brands like Videocon are even looking at out-of-the-box promotional activities that not only help to engage with customers but also create a buzz around the crucial time of festivals.  The company is setting up 200 experience zones in the lobbies of cinema halls across India for their Digital Direct Broadcast LED TVs.

“For the upcoming season, we have a marketing & branding budget of Rs 100 crore, which will be integrated into our advertising campaigns for creating higher visibility as well as brand positioning,” says Anirudh Dhoot, Director, Videocon Limited.



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