Automakers make a comeback to advertising; bets big on digital

By: and |
October 20, 2020 10:00 AM

Festive season contributes roughly to 25-30% of the annual sales for auto companies

Industry estimates suggest that automakers are among one of the largest advertisers in India, accounting for a tenth of overall spendingIndustry estimates suggest that automakers are among one of the largest advertisers in India, accounting for a tenth of overall spending

The automotive industry seems to be finally getting back to its feet. Add to this, the on-going festive season — which contributes to about 25-30% of the annual sales — is further expected to help in reviving sales. “Before the pandemic, we would spend on advertising equally across mediums. However, given the current scenario – although we are uniformly present across, digital is leading the way for all as that is where most consumption of content is taking place,” Vivek Srivatsa, head – marketing, Passenger Vehicle Business Unit, Tata Motors told BrandWagon Online.

Industry estimates suggest that automakers are among one of the largest advertisers in India, accounting for a tenth of overall spending. According to the Pitch Madison Advertising Report, the industry recorded a 54% negative growth in H1, 2020 as compared to H1, 2019 at Rs 1,139 crore across television, print and radio. This was despite auto companies including Maruti Suzuki India, Hyundai Motor India, Tata Motors, Hero Motocorp, Honda Motorcycle and scooter, Kia Motors, among others, being part of top 50 advertisers list in H1, 2020. With the opening up of the economy, it is believed that the industry’s ad spends are likely to go up in the festive season. Infact, data from media research firm TAM already shows that the auto industry’s month-on-month ad volume growth is nearing pre-Covid levels while for the cars category, ad volumes on TV, print and radio have increased in Aug’20 and Sep’20 across all traditional mediums. “As per the market needs, we are in the process of optimising media mix and investments. For mass reach, TV and digital are the mediums which we have utilised extensively to reach our targeted customers,” Tarun Garg, director-sales, marketing and service, Hyundai Motor India Ltd. said.

Further, digital media is expected to be a key driver in the growth of ad spends in the festive quarter. For Shashank Srivastava, executive director, marketing and sales, Maruti Suzuki India Limited, Q1 of FY21 was a complete washout both in terms of sales and brand campaigns. “For the complete year, there would be a rationalisation of spends. However, companies practically didn’t spend a penny on advertising in Q1 and much of Q2, hence, Q3 spends will be a little higher than last year. Our digital spends account for roughly 33% which will be true even for this quarter,” he added. As per Garg, the company’s spends during this festive season will be similar to last year, however digital marketing spends have grown over last year.

Industry analysts believe that the trend is expected to continue going ahead as many automobile brands have been able to leverage the digital medium to communicate effectively with their consumers during the lockdown. “Due to the pandemic, consumers have become more engaged with the digital platforms. Even though things have now become more normal, consumers are still hooked to the social media platforms. This has further given rise to automobile brands communicating with consumers a lot more through digital platforms,” Upasna Dash, founder and CEO, Jajabor Brand Consultancy, said.

Read Also: Brand Dhoni packs a punch; estimated to have earned Rs 120-150 crore this IPL from endorsements

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