According to a joint survey by the FICCI and Indian Angel Network (IAN), around 70% of Indian start-ups have been affected by COVID-19. The survey interviewed around 250 start-ups, out of which 12% had said they were forced to shut shop due to the pandemic. Just 22% had the financial reserves to meet their expenses over this period. 68% were forced to reduce operational and administrative costs. Many had to cut the salaries of the staff they had retained.
With such deep financial cuts, it would have been impossible for start-ups to invest extensively in advertising efforts and not wastefully or without transparency!
Yet, there was one ray of hope by way of advertising technology. Thanks to smart digital and advertising strategies, many Indian start-ups in sectors like FMCG, eCommerce, and others were able to avoid sinking into obscurity. Before we get into how they did this, let us analyze what the problems were.
What was the main challenge faced by Indian start-ups during COVID?
The main challenge was a massive reduction in available cash. As mentioned above, in the face of economic uncertainty and challenging macroeconomic conditions, budget cuts were the norm during COVID. Customer spending habits changed, large deals went into hibernation, payment cycles elongated, and investors put funding plans on hold. Start-ups had to pivot their offerings and messaging rapidly to remain relevant in the so-called “New Normal.” Many start-ups were in a dire situation, and there were talks of urgent relief packages, purchase orders from the government, tax relief, faster tax refunds, and fiscal support measures such as soft loans and grants.
Carefully planned digital advertising strategies that tapped the power of advertising technology and analytics helped start-ups scale revenues by connecting with the right target customers. This became possible even with lower investment. By using algorithms to drive optimal media campaigns, start-up brands could reach out to their target audiences and generate sales. They could communicate their new value propositions to customers and drive successful and customized campaigns to significant effect.
Data-driven advertisements at a low cost.
Using data, brands were able to create advertisements targeted towards very specific audiences. They created optimized ads that were displayed across very specific digital properties that had become a part of the newly-digitized consumer’s daily life. With programmatic advertising, start-ups could reduce their average spend per customer acquisition by automating channel choice and ad delivery. This also generated user interaction with their brands at a low cost. In an eCommerce world, the best thing was that they could direct customers to their online shops and make sales without the need for a physical marketplace.
Brands tweaked digital strategies to be able to connect with customers across many channels. This includes mobile phones, desktops, OTT channels, and more. Smart technology allowed start-up brands to exercise smart control over their omnichannel campaigns. Demand-side platforms started playing a more significant part in ad delivery strategies as consumers started depending on digital channels for everything. As this happened, more data emerged about how the customers were interacting with brands as well. This allowed start-ups further to optimize messaging, ad strategies, and delivery choices. If anything, the COVID situation created the perfect environment for omnichannel marketing.
Gave them access to proprietary data.
More granular data based on behavior, location, and demographics enabled better customer segmentation and ad targeting. Brands created referenceable cohorts of entire audiences to drive more nuanced strategies. One key trend that emerged was the greater reliance on First-Party Data as brands sought to develop alternative strategies for a world where the currently ubiquitous cookies would disappear.
Easily scalable campaigns.
These smart digital campaigns were easy to scale. With minute increments in the investment amount, tech-driven strategies allowed brands to reach more people at a minimal cost. Of course, the potential to scale digital ads has always been enormous. The growing no. of avenues to connect with customers and the vast amount of data available for analysis only made this more accurate in the last few months. It became easy to measure the success of different campaigns and scale with agility.
Customized reports with deeper insights helped start-ups understand where and how they were spending their money. They were able to streamline their processes as well and save money on campaigns that were not effective.
Digital marketing and advertising helped Indian start-ups scale their businesses at a time of financial headwinds. In essence, as these start-up brands were forced into increasingly digital means of product and service delivery, their ad strategies followed suit. Storied start-up brands like Zomato, PayTM, and Urban Company were already digital heavy. However, other brands like Dunzo, Licious, and Lenskart also rushed in to fill the space created by most consumers’ forced home-confinement. All these start-up brands tapped digital ad and media strategies to become visible to their consumers at precisely the right time in just the right way to drive awareness, actions, and conversions. They served as inspiration for start-ups across the entire ecosystem too.In the age of COVID, budget cuts, and a dip in investments – the optimal usage of funds was possibly the most significant way ad-tech was able to help Indian start-ups stay afloat. As technology evolves and terms like Artificial Intelligence and others find more excellent utility, this particular quality of ad-tech will become even more useful.