D2C unicorns are gaining traction among India’s top advertisers

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The advertising blitzkrieg is something that brands like Dream11, Byju’s, Swiggy, Netflix, PhonePe, CRED, and Coin Switch have in common. Because of their huge advertising spending, these new-age, tech-based companies, which became unicorns within years riding on India’s digital boom, have gained spots in India’s top 50 marketers list. 

More than 15 start-ups have made it into India’s top 50 marketers list in 2021, according to the current Pitch Madison Annual report, a coveted category traditionally dominated by FMCG giants. By spending a lot of money on stunning ads, Dream11 (3rd) and Byju’s (5th) were among the top five advertisers in the country. 

The top 50 advertisers account for more than a third (38%) of India’s Adex, which recently surpassed Rs 74,000 crore. Their favoured mediums, television and digital continue to account for 88 per cent of their total spending. 

Most of these companies, such as BYJU’s and Coin Switch, have developed to the point where they now sponsor worldwide events such as the Cricket World Cup, the Indian Premier League, and the Olympics. BYJU’s and Coin Switch, on the other hand, declined to comment on their ad spending. 

Most of these firms are D2C unicorns riding on venture capital funds, according to Rahul Vengalil, Managing Partner of Isobar, a Dentsu Group company. They believe that spending substantially on marketing is the only way to acquire customers and urge them to make purchases. Their AdEx is frequently significantly greater than their entire revenue. 

During the epidemic, many established firms, particularly high-spending FMCG brands, reduced their ad budgets. Many media companies have decreased their ad costs to offset losses. Could this be one of the causes for the high number of start-ups in the top 50? 

Many conventional firms, according to Jyothirmayee, we’re hesitant to spend heavily on advertising during the pandemic. In terms of startups, they are headed by the digital wave, which, on the other hand, was aided by Covid. 

Because these startups’ total expenditure is so high, many of them would have risen to the top even if traditional brands had ad spends comparable to pre-pandemic levels. 

Because of the speed and scale of new-age brands, the advertising industry is asking if start-ups will be able to outwit traditional brands in the advertising sector. Startups can no longer rely on test and scale decisions, especially when they have venture capitalists on their side. 

Traditional brands may struggle to survive in the future unless they have a strong presence in the tech sector. Brands must bring their reach and USP together with technology to succeed in the ever-changing market, according to Jyothirmayee. 

Vengalil pointed out that Amazon, Myntra, and Flipkart had previously dominated the list. They were spending a lot of money on advertising to attract and retain customers. CRED, BYJU’s, WhiteHat Junior, and more have now joined the bandwagon. 

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