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Marketers hopeful about consumer spending in 2021, advertising to regain normalcy by 2023

Major sporting events, elections will result in increased ad spends this year.

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MUMBAI: As the entire world went into sleep mode in 2020 due to the Covid2019 pandemic, the marketing sector faced a drastic setback. According to a recent FICCI-EY report, 2020 was a watershed year for advertising spends, as the industry slowed down by 29 per cent, the highest one-year drop ever witnessed in the history of Indian advertising expenditure. 

Traditional media faces setback, digital media stays intact

The Covid pandemic resulted in a drastic shift in the consumption pattern of customers, and being home-stuck with more time on their hands, many people started showing increased dependency on the internet before making any buying decisions. As a result, advertising in traditional media de-grew by 37 per cent in 2020. However, digital media remained flat, and was not badly affected by the new market trend. 

Print media and radio, which were already on a downwards trajectory, continued to de-grow in 2020 as they lost some consumers due to reverse migration, cost-cutting, and changing habits. According to the FICCI-EY report, most of these lost consumers may eventually return as the market continues to grow, but some portion of the earlier consumer base will turn out to be a permanent loss. 

Due to the decreased mobility of customers, OOH (out of home) and radio were also impacted. As people started maintaining strict social distancing measures, the experiential industry comprising events and cinemas too declined last year. 

Marketers optimistic about 2021

Even though the industry faced an unprecedented setback in 2021, marketers believe that advertising will grow by 27 per cent in 2021, and it will regain its earlier level by 2023. 88 percent of marketers believe that consumer spends will increase in 2021, while 12 per cent claim that it will stay the same. 

As consumer spends are expected to increase in 2021, marketers believe that ad spends will also witness a rise this year. According to the report, 66 per cent of marketers expect that their ad spends would increase in 2021. However, 10 per cent of the marketers suggest that ad spends will reduce by over 10 per cent in 2021. 

There are several factors that play their crucial role in determining the increased ad spends, and it includes key sporting events that include the Indian Premier League, Asia Cup, ICC T20 World Cup, and Olympics. Apart from these big-ticket events, several upcoming launches in the automobile sector, elections, growth of OTT, and mobile gaming could also contribute to rising ad spends in 2021. 

In the meantime, the Covid crisis has accelerated direct-to-customers (d2c) initiatives in 2020. Most marketers enabled e-commerce channels during the lockdown, and even began to spend money to promote the same. Marketers during the lockdown period also experimented with online events, apps, communities, and martech. 74 per cent of the marketers expect to spend over 20 per cent of their spends on digital media, a sharp rise from 45 per cent of marketers last year. 

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