Livemint: May 22, 2019
New Delhi: Marketers at online companies are dedicating more resources to print and television advertising as they seek to build awareness, create new categories and acquire customers.
Online companies such as Uber, Ola and Flipkart are expected to spend a total of ₹6,700 crore in advertising in 2019, a 19% jump from the figure a year earlier, according to estimates by media buyers. Much of this spending would be reserved for print, television and outdoor advertisements, they said, on condition of anonymity.
While the death of traditional media has been heralded since the advent of the internet, recent data points suggest that at least in India it continues to find favour with marketers of even digital companies as they seek to connect with consumers in the real world.
Online firms in India are spending a lot to create brand recall among consumers, armed with celebrities and big media budgets. This was necessary because online companies were trying to change consumer behaviour and build new categories, said Manisha Lath Gupta, head of marketing at Uber India.
“The disruptive behaviour change does need a lot of marketing investment and that’s why online firms are emerging as a strong category in the overall adex (advertising expenditure) pie," she said. “For us, since Uber is a phygital (both physical and digital) business, therefore outdoor and television become important platforms. With autos and motorbikes coming in our portfolio, the profile of riders is also changing; therefore, TV does become an important media mix."
Uber, promoted by Virat Kohli, and Uber Eats, promoted by Alia Bhatt, leveraged the popularity of the Indian Premier League’s (IPL). The company has now mounted a massive advertising as well as reward-based campaign for the ICC Cricket World Cup.
It’s not just Uber. Rival cab-hailing firm Ola, food ordering firms Swiggy and Zomato, e-learning app Byju’s and fantasy gaming app Dream11 dominated television advertising during IPL 2019 and some of them plan to leverage this during the cricket world cup.
Media buyers estimate that digital firms will account for 8.5-9% of overall the overall ₹80,000 crore advertising expenditure this year compared to 8% in 2018.
Online companies have become a huge growth driver for Indian advertisement spending, said Navin Khemka, South Asia chief executive of MediaCom.
“Online brands with a new product and proposition want to build their reach fast while penetrating deep in the country," Khemka said. “Since India is still an extremely television-dominated market, most of these companies use the mass media platforms to build instant awareness, reach, recall and credibility for the products they are trying to sell to consumers."
Outside India, the customer acquisition strategy was mostly online through banner ads, said Ankur Pahwa, partner and national leader for e-commerce and consumer internet at EY India. Since a large number of users were still offline in India, online companies had to spend a lot of money on mass media platforms to raise awareness, he added.
“A celebrity associated with a platform creates greater awareness, grabs eyeballs and creates customer acceptance towards the product," Pahwa said. “However, given the high cost of customer acquisition (including from discounts), online companies are heavily skewed towards first positive customer experience, failing which they lose consumer trust and continuity."
Apart from e-commerce portals, several new product and service companies have sprung up in the last few years. One of the most visible categories is food ordering platforms, which are expected to spend as much as ₹300 crore in advertising this year.
PhonePe, the Flipkart backed payments platform that released its first advertising campaign featuring actor Aamir Khan during IPL this year, is betting big on television and plans to leverage below-the-line activities such as mall activations and on-ground promotions to amplify its reach.
“The focus of our ongoing brand campaign is on building awareness around digital payments for both rural and urban audiences. A mass media platform such as television offers us the perfect opportunity to do so as it is the medium with the largest reach in the country," a PhonePe spokesperson said in an emailed response.
For learning app Byju’s, endorsed by Shah Rukh Khan, a judicious mix of television and print worked the best.
“Television has helped us with customer acquisition in terms of increased app downloads. We have specifically used print medium to explain the how and the why of the app to our target audience," said Byju’s chief operating officer Mrinal Mohit. “We will continue to use a blend of television, digital and print mediums to reach out to our students. After wrapping up a highly successful IPL campaign, we will be using the ICC World Cup as a medium to promote our brand."
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.