Onam is around the corner and brands are expected to spend a hefty amount on advertising this year. Consumer sentiment is positive and the ad spend this time is expected to approach near pre-pandemic levels.
According to experts, the AdEx during Onam is expected to grow approximately 15% -20%.
“We anticipate at least 15% growth in AdEx this year. While last year's Onam period saw spends in the range of Rs 350 crore, this year, we expect this figure to touch Rs 400 crore,” shares Sri Harsha, Associate Vice President and Cluster Head, DDB Mudramax.
“TV & print AdEx is expected to grow by at least 10%, while digital adex is expected to grow by 40%, contributing significantly to this year's growth,” adds Harsha.
Thomas says good economic conditions in Kerala along with pent-up demand from consumers is driving the growth. “Last year’s Onam season was the first one after the pandemic lockdowns which saw very high consumer spending. The trend may continue this year,” he adds.
According to Priya Iyer, COO - South, Initiative India, with the Onam festive cheer charging up consumers' spirits, brands are looking to capitalize on the momentum and increase their ad spends. “The sentiment among clients appears to be cautiously optimistic, despite initial concerns related to the delay in the monsoon. Several brands in Kerala allocate 20-30% of their annual budget for this traditional festive season.”
“A look at last year's AdEx data shows that advertising volume around Onam grew by 15% in print and 20% in TV compared to the pre-pandemic year. The growth during this year's Onam is expected to be on par or moderately higher than last year. We anticipate the overall AdEx to approach pre-pandemic levels in Kerala, with TV and Digital driving this momentum with an increase of 15-20%,” opines Iyer.
Ad spend expectations from mediums
TV and digital is coming out as the favorite mediums among brands this year.
Thomas expects the consumer sentiment to be positive this year as buyers, he believes, are feeling more confident about the economy and are willing to spend more.
Explaining how the ad growth will be distributed among mediums this year, he says, “Based on market sentiment, I expect the following growth in ad spends for Onam this year, compared to 2022 - TV: 15%, Digital: 20%, Print: 10% and Radio: 5%.”
“TV is still the most popular medium for advertising in Kerala, but digital is gaining ground. The digital audience in Kerala is growing rapidly, and this is driving the growth of digital advertising. Print advertising is still popular in Kerala, but it is facing increasing competition from digital. Radio advertising is less popular than TV, digital, and print, but it still has a loyal audience in Kerala.”
Iyer says that according to his observations, certain categories, such as consumer durables and auto, shifting from Print to TV advertising, will contribute to the growth in those mediums. “Q1 2023 has already witnessed an increase in ad revenue with 2x growth in AdEx in TV and 15% growth in Print, and marginal growth in volume. This shows advertisers are moving to large format and impact ads, and this trend is expected to continue during Onam as well.”
Categories expected to spend more
Sri Harsha believes that the influx for ad spend is expected from retail outlets (consumer durables/electronics/textiles fashion & jewellery, ecomm & auto), which contributes to 30% of the market spends during Onam. “Looking at the year-on-year trend in ad spends, we can expect around 40% growth in digital this year, effectively promoting offers, discounts and product campaigns to respective audiences."
Iyer believes that the retail sector and media sector will be driving the growth for this Onam. “The retail sector, particularly sub-categories like consumer durables, textiles, and jewellery, has a significant presence in the Kerala market. Brands in the jewellery and consumer durables sectors are showing a sense of urgency, leading to a surge in impact ad space purchases to secure a higher share of voice. Additionally, the entertainment category is witnessing higher spends due to special Onam episodes, cinema releases and OTT releases. Moreover, Onam celebrations have expanded beyond geographical boundaries and are embraced by consumers from different cultures, creating newer avenues for advertisers.”
“The consumer sentiment this year appears positive, with Onam serving as a crucial starting point for the festive season in India. Advertisers often use this occasion as a gauge to predict the rest of the season's performance. Despite certain macroeconomic conditions, the growth is expected to be promising, on par with or slightly exceeding last year's figures,” Iyer adds.
