Impact of COVID-19 on advertising: R K Swamy Media group's Sandeep Sharma shares his 3 month forecast

 13th April 2020    Opinion 

The current instant spread of COVID-19 has made the Indian government to put a temporary country lockdown which has paused business in various sectors, including the Indian advertising Industry. There will be a significant impact on advertising due to this situation and there would be at best selective messaging in specific media. 

The immediate casualty is IPL as there seems a very remote chance it will happen on schedule. Usually, in the first quarter, approximately 28% of annual budgets are spent for the entire summer season. The first quarter is when clients are fresh with their annual budgets and strategy for the year and are keen to begin on a strong note. 

However this time it is different as most will be cautious as it will be some time before the factories, dealers reopen and business demand slowly starts coming back. One can safely assume that this will not happen before the July to September quarter hence the first quarter will see a dip in advertising of almost Rs 10,000 cr + across all media.

News channels, regional entertainment channels, movie channels on TV, print dailies and some digital is what will attract the advertising that will happen in the next three months. Outdoor, events, research, specialist offerings will be hit badly. Most messaging will be in the context to COVID 19 or informative and brand building, corporate advertising will happen selectively in some categories.

Cashflows and demand are hit hence advertising budgets are likely to be cut across the board. Some categories like travel, airlines, hotels, automobile and related sectors, real estate and allied sectors, consumer durables, furniture, retail (non-food consumables) are going to be hit the most. BFSI will be defensive and cautious.

Organizations are going to focus on cashflows and cost-cutting with talent cost and advertising comprising a significant portion of their costs. So the sentiment normalisation will be the biggest challenge once things settle down on the virus front.

On the positive side, we could see advertising from Government, ministries and certain PSU’s as there will be a need for information dissemination and it could also be a good opportunity for PR and Digital.I would expect advertising to start picking up from September onwards and if things get normal in the next 3 months then we could see a high level of advertising investment in the Oct-Mar period with Diwali, WC T20 &  the Union Budget being the big events.

This too shall pass and we will emerge a stronger, cleaner nation is my inherent belief.

Sandeep Sharma is president R K Swamy Media Group, an integrated media unit of R K Swamy Hansa.