Live Issue: ‘Why’ and ‘How’ of advertising in a slowdown

With the market facing gloom and the country facing its lowest ever GDP growth in the last 34 quarters, one would be of the opinion that marketers would be tightening their budgets by decreasing advertising spends. But marketers, speaking at conferences such as the CII Marketing Summit, have a different opinion.

Pranesh Mishra, chairman and managing director, Brandscapes Worldwide, explains why marketers are looking to take that route: “Studies in the US have proven that brands that continue to invest (or dramatically increase spends) during a recession, achieve higher market share gains after the recession phase. So the brand would achieve a positive ROI on this investment in the long term, although during the recession, it will see a larger drop in ROI. This is intuitive logic too. Most competitors will save money during a slowdown to make their bottom line numbers. So if a brand holds its marketing investment, it will achieve greater share of voice. This should lead to stronger equity that will sustain after the slowdown phase is over.”

Marketers closer home agree with Mishra’s logic.

Ajay Kakar, CMO, financial services, Aditya Birla Group, explains why marketers should be using this period to reach out to the consumers. He says, “In good times, you may want to be in the midst of your friends. But in not-so-good times, you feel the need to be in their midst, even more so. I think that the same analogy applies to brands and their customer base, especially in case of financial services brands. In uncertain times, a customer seeks reassurance that you are available and accessible, or ‘just a call away’. Regrettably, during such times many brands choose to keep a low profile, either because of their performance issues or due to their desire to preserve budgets. The mistake that such brands make is to assume that mass media is the only way to stay visible and therefore they steer clear of these mass spends. In uncertain times, I believe that just a phone call can be more reassuring than all the expensive mass media spends we otherwise use to reach out to our customer. Just a Help line, ‘in case you want to reach out to me’ can do magic, as a reassurance.”

Vinay Piparsania, executive director, marketing, sales and service, Ford India, agrees with Kakar about keeping the visibility high in such times. “It’s not about increasing spends during a period of gloom. It’s important to be more effective. Marketers need to be more focussed and look at the market in a more segmented way. When communication is rolled out, one must be sure that it is giving buyers a reason to buy your product now and also explains the reasons,” says Piparsania.
Quikr’s CEO Pranay Chulet, says that the online classifieds portal is using this period to increase spends. He says, “The online classifieds sector is expanding very fast and with the entry of new players, it will continue to do so. So, we have to advertise to maintain and expand our leadership position. We have the scale and finance to do so and will carry on advertising and probably look to increase spends as well.”

While players in the finance, automobile and online space hold their viewpoints, Akshay Mehrotra, CMO, Big Bazaar, thinks it is important to look at the consumer sentiment as well. He says, “Consumers have to connect with the brand and its advertising. If consumers don’t have the money to purchase, they’ll wonder why a brand is spending. Brands should spend when the consumer is ready to spend. The right timing is important and the consumer mindset is important.”

  

Marketer

Ajay Kakar, CMO, financial services, Aditya Birla Group

“History has shown us that the brands who reach out to their customers in uncertain times gain the most when the environment and sentiment improves. The only guiding principle at this time should be not to spray the market with an AK47 burst of spends, but to adopt the strategy of a sniper and make every rupee spent accountable and measurable.”

  

Marketer

Akshay Mehrotra, CMO, Big Bazaar

“I was working with Bajaj Allianz in 2008 when the market was very bad. We had the money to advertise and that helped our brand. We picked up large properties for peanuts and that helped the brand. But the market sentiment also needs to be there. Ads get customers to the store but that doesn’t necessary lead to purchases.”

  

Marketer

Pranay Chulet, CEO, Quikr

“We’re getting a good return on marketing spends during this time. Our industry (online classifieds) is conducive to gloom. People look to classifieds at such times as they’re either looking to sell unwanted goods or looking for deals on used goods they want. The other reason why we’re spending currently is that we don’t know till when the downturn will run. It could run until the elections.”

  

Marketer

Vinay Piparsania, executive director, marketing, sales and service, Ford India

“When communication rolls out, one must be sure that it is giving buyers a reason to buy your product and communicate those reasons. Reducing wastages is very important. A balanced social media mix must be used.  Production costs must be kept low and digital should be at the forefront during such times.”

  

Brand consultant

Pranesh Mishra, chairman and managing director, Brandscapes Worldwide

“Slowdown is really a great time to build brands. Just off the top of my head, Lodha Builders seem to have built a strong brand during the slowdown. They continued to use high decibel advertising, launching new properties during the slowdown. Now they are emerging as one of the strongest brands in the realty sector.”