Major D2C brands in India are starting to cut their marketing budgets, and if the TAM data is any indication, TV advertising is the biggest victim.
Major D2C startups such as DunZo, Nykaa, Zepto and Blinkit have not advertised on TV for about six months, according to TV ad volume statistics through November 22, 2022, obtained from TAM.
Dunzo Digital, for example, did not advertise on TV at all from January to November 22, except for May, which coincides with the Indian Premier League (IPL).
Similarly, Nykaa fashion, Blinkit and SnapDeal have not advertised on TV since May. Zepto only advertised in February this year and he in March, the rest of the month he did not advertise on TV.
BookMyShow and Plum only opened TV advertising accounts in November (coincident with Diwali) after drawing a void all year.
In contrast, Amazon India, Reliance (Ajio and Jiomart), Flipkart, Meesho, and Mamaearth have been consistent advertisers in visual media this year.
Interestingly, TAM data suggests that most of these retailers continued to advertise consistently across digital and other platforms this year.
The IPL is one of the most popular live cricket tournaments, attended by millions of consumers across the country. As sponsors of games, teams or media partners, we attract a large number of advertisers including D2C, edtech and fintech brands.
How D2C brands have distanced themselves from TV aside from IPLs is particularly noteworthy as the e-commerce sector was the second largest contributor to India’s advertising spend in 2021.
According to Pitch Madison Annual Report (PMAR), it doubled in size from Rs 3,000 crore to Rs 6,000 crore between 2020 and 2021.
Additionally, according to another report from Redseer, e-commerce retailers are expected to achieve gross merchandise value (GMV) sales of $11.8 billion, up 28% year-over-year during this holiday season, which began in August. I’m here.
The e-commerce sector, currently worth more than US$100 billion, is expected to reach US$350 billion by 2030, consultancy RedSeer said in a 2021 report.
strategic reason
e4m sent out a survey to D2C brands asking for their side of the story.
Zepto CMO Amritansu Nanda defended the move. “Because of our focus on geotargeting, we are strategically not investing heavily in television,” said Nanda.
Nanda explains: Overall, however, advertising spending on TV will continue to be limited to strategic interventions planned for the future, such as IPL campaigns. ”
Dunzo’s general manager of brand marketing, Tanveer Khan, said the decision to cut TV advertising was the result of evaluating several key factors.
“In India, there are few big opportunities for brands to spend money to promote advertising.Since IPL is at the top of the list, we decided to advertise on TV in the meantime.Other opportunities to advertise on TV throughout the year. but decided to stick with IPL for TV advertising,” Khan explained, adding that the strategy has worked well for the company from a results standpoint.
Khan added: Given the festive season in the second half of this year, television was not part of our strategy given the organically high demand for shopping among consumers. ”
A Blinkit official said that because the company is a publicly traded company, it cannot share its marketing strategy. Others have not responded until I submitted this story.
Digital for digital-first brands
Television is trusted by advertisers for its high reach and recall value. However, with the exponential growth of digital advertising and new formats such as influencer his marketing, short videos, social media and OTT, TV advertising has been overshadowed to some extent.
According to GroupM’s year-end report, digital advertising’s market share in advertising spend in India will reach 48% by 2022, compared to TV advertising’s 38%.
Digital advertising is also important for digital-first brands.
Tanveer Khan, Dunzo is a digital-first brand, with performance and digital marketing always a priority. This is because the major consumer base is most easily reached through these media. But we’ve always experimented with platforms and believed that they all do their best work: TV spots, newspaper ads (such as print ads for the highly acclaimed board game), and outdoor hoardings. rice field. media mix.
Reflecting on his sentiments, Nanda said: This also helps brands maintain consistent dominance in geographies and featured media. ”
Streamline your ad spend
The absence of the Ecom and D2C brands from television is also seen as a means of streamlining amid profitability pressures and slowing demand over the past two quarters.
Rajiv Dubey, Head of Media at Dabur India, calls this a streamlining exercise. “As the free flow of funds from venture capital investors dwindles, it is the slowdown/rationalization of advertising spend in the ‘app-based’ businesses of e-commerce brands, under pressure to generate profits. ”
The challenges of surviving high cash-burn segments, such as fast commerce, have forced some players to scale back. For example, Reliance-backed Dunzo is in the process of closing 120 dark stores in Delhi NCR and Hyderabad.
Snapdeal has dropped its $152 million IPO. Filed IPO regulatory documents for December 2021 approval.
However, this is not true for all D2C brands. Meesho and Zepto each raised $135 million and he $200 million this year. Plum also raised $35 million.
“Each player has their own reasons for choosing a marketing platform. But winter fundraising in the startup ecosystem has impacted marketing budgets. Brands streamline spending to cut costs. TV ad budgets are usually the first victims if they decide to do so,” said Sajal Gupta, CEO of Kioas Marketing.
Indian start-up funding in 2022 fell 35% to $24.7 billion from $37.2 billion in the same period last year, according to a report from market intelligence platform Tracxn. Funding in Q3 2022 was down 58% compared to Q2 2022 and down 79% compared to its peak in Q3 2021.
“Last month appeared to be a ray of hope, but it is still too early to think that the bottom has passed. CEO and CEO Neha Singh said in a statement.
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