Why did e-commerce startups discontinue their TV advertising?

If TAM data is any indication, the top D2C firms in India have begun to cut back on their marketing expenditures, with television advertising suffering the most loss.

According to data on TV ad volumes up to November 22, 2022, obtained from TAM, top D2C startups including DunZo, Nykaa, Zepto, and Blinkit haven't run TV ads in around six months.

For instance, Dunzo Digital did not run any TV ads from January to November 22. The exception was the month of May, which fell during the Indian Premier League (IPL).

After being without a TV ad account for the entire year, BookMyShow and Plum finally opened one in November (in time for Diwali).

In contrast, this year's consistent marketers on the visual media have included Amazon India, Reliance (Ajio and Jiomart), Flipkart, Meesho, and Mamaearth.

The TAM data indicates that most of these etailers continued to continuously advertise throughout this year on digital and other media.

Millions of fans nationwide follow the IPL, one of the most well-liked live cricket competitions. As sponsors of the game, teams, or media partners, it draws in a sizable number of advertisers, including D2C, edtech, and fintech brands.

It is amazing how D2C firms, with the exception of the IPL, are avoiding television. This is especially true given that in 2021, the e-commerce industry contributed the second-highest share of India's advertising spending.

Its size increased by a factor of two between 2020 and 2021, rising from Rs 3,000 crore to Rs 6,000 crore, according to the Pitch Madison Annual Report (PMAR).

Additionally, a different analysis by Redseer estimates that e-commerce businesses will make sales of $11.8 billion in gross merchandise value (GMV) during this holiday season, up 28% from last year.

According to consultancy firm RedSeer's 2021 research, the e-commerce industry, which is currently valued at over $100 billion USD, would grow to a USD 350 billion USD market by 2030.

Strategic reasons

e4m sent a questionnaire to D2C brands seeking their side of the story.

Amritansu Nanda, CMO, Zepto, defended the move. “We have strategically not been heavily invested in TV as a medium given our extensive focus on geo-targeting,” Nanda said.

"We strategically launch advertising on regional channels where the spillover is lesser," Nanda said. Overall, though, our TV advertising budget will still only be used for future planned strategic interventions like our IPL campaign.

According to Tanveer Khan, GM, Brand Marketing, Dunzo, the decision to reduce TV advertising was made after carefully considering a number of important criteria.

There are very few significant events in India where brands invest money to promote their advertisements. We chose to run TV ads during that time because the IPL is at the top of the list. We did look at other possibilities to run TV advertising throughout the year, but we ultimately chose to remain with the IPL," said Khan, noting that the plan had produced positive results for the business.

Khan continued, "Thanks to our TV advertising, we experienced exponential growth between April and May. We anticipated that there would be a naturally high demand for shopping among customers over the holiday season in the second half of the year, thus TV was not included in our approach.

According to a Blinkit representative, since the company is publicly traded, marketing plans couldn't be disclosed. Others have not answered as of the time this story was filed.