Will edtech see realigning of marketing spends?

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The post-pandemic era is proving to be a challenging moment for India’s edtech industry, which had risen to third place in terms of funding last year with upwards of $4.7 billion in investments. The main edtech enterprises appear to be experiencing an unanticipated crisis as a result of cost reductions, layoffs, and slowdowns over the past several months.

Unacademy, one of the largest edtech companies in the nation, just publicly disclosed its plans to reduce expenditures, including salary reductions for the teams and separation from the loud IPL. According to analysts, this may very well be the start of the edtech sector as a whole reducing its media expenditures

The epidemic unexpectedly boosted the edtech industry because individuals were forced to study through digital media. The growth was phenomenal, and VC funding kept the pace rolling. The category may experience some shifts in priorities as a result of people becoming preoccupied with their pre-pandemic routines and schools and colleges reopening.

Shradha Agarwal, CEO and co-founder of Grapes, quipped, “Given that edtech funding is going through an extreme slowdown, the companies will reprioritize their ad budgets. There will be a break in marketing expenditures during which time companies will shift their focus from big-ticket advertising to other forms of media like TV and social media. There will be a break in marketing expenditures during which time companies will shift their focus from big-ticket advertising to other forms of media like TV and social media. Agarwal summarises the overall effect on the advertising sector by stating, “Though the marketing budget will take a drop, the brand-building activity will continue. Companies need to adjust their marketing budget and budget volume during this brief phase. Given that edtech companies have spent the most on advertising over the previous several years, they will reduce this additional investment in light of the unstable market. The advertising industry, however, will rarely be affected by this because there are so many other industries, including BSFI, F&B, travel, etc

Companies need to adjust their marketing budget and budget volume during this brief phase. Given that edtech companies have spent the most on advertising over the previous several years, they will reduce this additional investment in light of the unstable market. But given the several other industries that will dominate the AdEx, such as BSFI, F&B, Travel, and FMCG, this will hardly have any effect on the advertising business

However, according to Viren Razdan, MD of Brand-nomics, the category will continue to be one of the major spenders for a while. “For a while to come, spending on education will remain the highest of any industry. The idea of the “new normal” is being debunked by this phase, which is also resurfacing some of the old facts. Many businesses joined the movement to prepare for the new behavioural rules the pandemic brought about, expecting that these changes would last. Perhaps most impressive is how quickly the market has returned to normalcy.

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