MediAvataar's News Desk
COVID-19 is on everybody’s mind and will certainly remain so for months, quarters, and years to come.
The coronavirus outbreak will have many impacts on multiple industries, some extremely negative but also some positive.
Digital services are becoming critical to our society as many go into self-isolation to fight the spread of the virus. From the ability to communicate with loved ones or share a coffee remotely with colleagues via video conferencing, to entertaining the whole family with premium TV content and video games, the demand for digital is set to increase tremendously in the next few weeks. Many service providers have responded with free broadband and pay-TV package upgrades to help their consumers survive this new situation. Figure 1 is an extract from Omdia’s upcoming report on the impact of COVID-19 on consumer services. The outbreak will create some short-term opportunities in a number of areas including e-commerce, OTT video, and mobile apps but those will be short-lived as people return to some sort of normality around early 2021.
Video calling is more popular than voice calling on mobile messaging apps
The key question is which effects will last beyond 2020. Let’s start with economy. It is anticipated that the COVID-19 outbreak will initiate a global recession despite the financial packages and measures offered by many governments around the world. Industries such as tourism, transportation, and hospitality will simply fail and significantly affect consumer demand. Deutsche Bank recently updated its forecast on March 18 for 2Q20 predicting that euro-area GDP and US GDP will drop 24% and 13% year-on-year, respectively. Many financial institutions still forecast global GDP growth in 2020, anticipating a huge rebound in the second half of the year but this will be highly dependent on the effectiveness of social distancing measures. The economic outlook will have a fundamental impact on advertising spend and therefore on all consumer services which depend on it fully or partly, such as social platforms, free-to-air TV, and free OTT video services.
Another lasting effect to consider is how self-containment will make people aware of alternative ways of doing things which they may choose to continue after the crisis is over. One obvious example is working from home and how this might affect the future of work. On the media side, people will be more inclined to experience new services especially in OTT video. Smart home technology such as smart displays, video doorbells, and AI assistants will see increased adoption and find more uses among consumers.
Doing things differently tends to be enlightening as many unexpected outcomes emerge. One thing for certain is that digital will become critical and this should be seen as a positive gain for the industry, although this may translate into financial gains much later than anticipated.
A vast majority of urban Indians are confident of the Government’s ability to handle the crisis
With India going in a 21-day lockdown to control the spread of the Coronavirus, YouGov’s latest data reveals that almost all urban Indians (95%) either strongly agree or agree that a lockdown will help fight the spread of COVID-19. The rest (5%) are either unsure or do not agree with this solution.
Data from the latest wave of YouGov’s weekly COVID-19 tracker further supports this view and shows the public is overwhelmingly confident of the Government’s ability to handle this crisis. Nine in ten (91%) said the Government is doing very well or fairly well in handling the issue of the Coronavirus, up from 87% last week. A very small number (7%) now thinks they are doing very or fairly badly, down from 10% last week.
At an overall level, we see the level of fear rising among Indian citizens. Six in ten Indians (64%) now say they are very or fairly scared about contracting the virus, up from 54% last week. 27% claim they are neither very scared or not at all scared about getting infected.
Notably, worry among North Indians has increased considerably over the past week, from 57% saying they are very scared or fairly scared about contracting the Coronavirus last week to 68% saying this now. Compared to the other regions, in South India fear is much lower- at 57%.
Thinking about the consequences of the Coronavirus, three in five residents (61%) feel the pandemic will lead to an economic recession. GenX (66%) and Baby Boomers (72%) are more likely to say this than their younger counterparts- GenZ (54%) and millennials (57%). Likewise, tier-1 residents are more likely to feel this way as compared to the other city tier residents.
Around half feel the Coronavirus will result in the hoarding of essential items (51%) or cause a large number of deaths due to infection (49%). Here again we see tier-1 city residents being more likely than tier-2 and tier-3 residents to say both these things (56% for each).Many see job losses as an outcome of the pandemic (45%). North India is more likely to foresee this outcome- at 50%, while West India is least likely (37%).
37% feel Government mandated food rationing will commence in the future. Men are more likely than women to say this (42% vs 31%).
A considerable proportion are expecting to see some extreme outcomes of this outbreak such as deaths in certain socio-economic groups (36%) and military enforcing lockdowns (27%). Few go on to say the COVID-19 outbreak could lead to riots (14%). For all these outcomes, a higher number of North Indians foresee these consequences as compared to residents in the other regions of India. The high fear levels among North Indians could be the reason they are expecting these consequences.
Data collected online by YouGov Omnibus among 1000 respondents in India between 24th and 27th March 2020 using YouGov’s panel of over 6 million people worldwide. Data is representative of the adult online population in the country.
An advertising recession is now highly probable in the first half of 2020 as COVID-19 hits key media owners
FMCG brands - which spend $97.2bn on advertising - are likely to weather the storm better than other sectors, as sales of food, drink and hygiene products boom on Amazon and Tmall
WARC Global Advertising Trends: FMCG & COVID-19
The global economy is set to fall into recession, with the advertising market likely to follow in the first half of this year, though FMCG brands are better-placed to weather the storm finds WARC, the international marketing intelligence service.
The Purchasing Managers' Index (PMI) - a monthly survey of trading conditions among purchasing managers in private sector companies - for February and March show the worst results for the services sector in recent history across the US (39.1, whereby a value below 50 indicates decline), UK (35.7), Japan (32.7), the Euro area (28.4) and China (26.5).
The COVID-19 crunch is filtering through to advertising; RTL, Europe's largest broadcaster, has stated that COVID-19 is hitting ad bookings, while in the US NBCUniversal also expects a material impact, not least because its Olympic coverage has now been postponed.
UK broadcaster ITV reports the same, notably within the travel sector (5% of its 2019 ad revenue, or £91m) and expects ad growth to be down 10%. JCDecaux is anticipating a 10% dip too.
Baidu in China advises Q1 revenue will be down by as much as 18% while other online pure players, such as Alphabet, Twitter and Facebook are also exposed - digital channels are often the easiest to switch off in a time of crisis.
The last financial crisis removed $60.5bn from the advertising market, with all media apart from online search recording declines in investment. The market took eight years to recover from this shock after accounting for inflation and currency fluctuations.
James McDonald, Managing Editor, WARC Data, and author of the research, says: "The current downturn may not hit FMCG as hard as other product sectors, but it is likely to be consequential in terms of changing consumer purchasing behaviour. A sharp increase in e-commerce activity may result in online players becoming more significant as the gatekeepers to FMCG shoppers."
FMCG better-placed to weather the storm
During the last advertising recession in 2009, advertising investment among the food and drink sector fell at a far softer rate than the wider industry. In the UK, the food sector reduced investment by 1.3% to £860m and the drinks sector by 2.3% to £321m. This compares to a 5.6% fall for total FMCG (to £1.98bn) in the UK and an 11.7% dip for the total UK market (to £13.11bn). TV was by far the hardest-hit advertising medium.
Sales revenue was down for each of the five largest FMCG companies in 2009, though only P&G (-11.7% to $7.52bn) and Coca-Cola (-6.9% to $2.70bn) cut ad investment. As a share of sales revenue, advertising spend held during the last crash at Unilever (13.3% of sales, or €5.30bn), P&G (9.8%, $7.52bn), Nestlé (33.7%, CHF36.27bn), Coca-Cola (9.0%, $2.70bn) and L'Oréal (30.8%, €5.39bn).
The FMCG ad market was worth $97.2bn in 2019, a 15.6% share of global advertising spend. Much of this money is spent online; for example, 55.8% - $28.55bn - of ad budgets in the household and domestic sector is invested in online advertising. This compares to a 26.9% share ($25.59bn) for toiletries & cosmetics.
The food and drinks sectors spend most on TV, at $17.0bn and $16.28bn respectively. Brand-building is important within these sectors as products are sold via third-party retailers, not directly to consumers. These sectors are better-placed to weather the impending recession as shoppers continue to buy the essentials; the apparel, automotive, retail (non-food), consumer durables and leisure & tourism sectors will be disproportionately affected by a downturn.
FMCG sales boom on Amazon and Tmall as consumers adjust to 'the new normal'
One in four is now shopping more online due to COVID-19. Millennials (39%) are more likely to do so, followed by Gen Xers (25%). Higher earners are also significantly more likely to than lower earners (48% versus 15%). Most shoppers are going online at the expense of visits to the store; this is particularly true in India (55% of consumers) and China (50%), but also notable in Italy (31%), the US (23%), and the UK (18%).
A WARC analysis of Edge by Ascential data shows sharp rises in the sale of FMCG products on Amazon in the US and UK over the last few weeks, with growth far exceeding both Amazon Prime Day and Black Friday. In the US, sales of hand sanitiser were up by over 650% compared to a year earlier, and 450% compared to Prime Day. Sales of pantry staples, vitamin C and disinfecting wipes more than doubled. Nielsen also recorded sharp rises in grocery sales across all US outlets, notably for powdered milk (+85%), dried beans (+37%), canned meat (+32%), and rice (+25%).
The picture was similar in the UK; sales of antiseptics & disinfectants were up by almost 300% on Amazon, while sales of soaps & hand wash trebled. In China, sales of face masks, oral mouthwash, snacks & confectionary and alcohol have more than doubled, according to data from Yimian.
The upshot of increased e-commerce activity is that online players may become more significant as the gatekeepers to FMCG shoppers. For the big manufacturers, this may increase the importance of DTC or subscription offers. Consumers are now 'living a new normal', and crisis-buying habits may become permanent behaviours.
India’s leading media conglomerate, ABP News Network, has appointed Ms Zulfia Waris, as the Business Head, ABP News Network Content Studio.
With strong expertise in the media industry, Ms. Zulfia will be responsible for the organisation’s new subsidiary, ANN Content Studio, to produce path-breaking content for all platforms.
Ms. Zulfia comes to ABP group with an immense experience of over 20 years. Prior to this, Ms. Zulfia was the VP-Product Head, Premium Head & Digital Networks at Discovery India. Under this role, she was responsible for Discovery India channels under the factual and lifestyle categories. She has worked with several companies including TV18 India Ltd, M.T.V India, Channel V India, Star TV Network and Zee Entertainment Ltd.
She has held numerous leadership roles since 2007 and was at the helm of content & creative strategy, marketing, on-air promotions, production, acquisition, programming, budgets, social media innovations, content partnerships, and community building.
Commenting on Ms. Zulfia’s appointment, Mr. Avinash Pandey, CEO, ABP News Network said, “We are pleased to infuse Zulfia’s expertise and vision into ABP News Network’s Content Studio, especially since it is in a period of rapid digital growth. I can say with confidence that her approach and values align with our culture, and her knowledge and creativity will add to the organization’s success, over the next few years.”
Ms. Zulfia has done her Bachelors in English Literature from Sophia College Mumbai in 1998 followed by Post Graduate Diploma in Social Communications & Media from Sophia Polytechnic Mumbai in 1999.
Second highest rated premiere ever in the history of infotainment genre
· Discovery Network garners 89% genre share during the premiere
Discovery channel created history yet again, with the premiere of Into The Wild with Bear Grylls & superstar Rajinikanth, after the historic high touched by Man Vs Wild with Bear Grylls & PM Modi. The premiere on Discovery Network (across 12 Discovery channels) delivered highest rated TV show in the genre this year so far and second highest ratings in the history of the genre delivering an impressive 4 million impressions*. The cumulative reach of the premiere across network was 12.4 million, solid 86% higher than the previous 4 weeks**. The premiere helped the network garner 89% share in the infotainment genre***. The slot viewership grew 5 times as compared to previous 4 weeks***.
The simultaneous premiere of the show on regional entertainment brand DTamil grew the slot by 20 times and helped DTamil nudge ahead of leading channels including Colors Tamil, Jaya and Raj TV during the slot****.
The show created huge buzz on the social media with #ThalaivaOnDiscovery reaching out to 1.41 billion individuals delivering 3.32 billion impressions (Source: Meltwater)
Into The Wild with Bear Grylls is an innovative new format inspired by Man Vs Wild, which is one of the most watched wilderness survival television series in the world. Last year, ‘Man Vs Wild with Bear Grylls & PM Modi’ episode disrupted the Indian media landscape, establishing itself as the TV event of the year. Beyond Prime Minister Narendra Modi, Bear Grylls has also hosted prominent celebrities in the past such as then sitting American President Barack Obama, Kate Winslet, Roger Federer, Julia Roberts and many more.
* Source: BARC India|TG:All2+|Market:India(U+R)|DNI Infotainment Network|Period:23th March 8pm-9pm|Impressions
** Source: BARC India|TG:All2+|Market:India(U+R)|Period:23rd March’20208pm-9pmPremier Slot|Cumulative Reach
***Source: BARC India|TG:2+|Market:India (U+R)|23rd March 8pm-9pm |Channel Share%
**** Source: BARC India|TG:2+|Market:TN|Period:23rd March 8pm-9pm|Impression’000