Advertising in the time of Coronavirus: How suspending ad production will impact the biz

In view of the epidemic spread of the COVID-19 and to support the steps taken by the Indian Government to control the virus, a joint meeting was held on 15^th March 2020 between FWICE, IMPPA, IFPTC, IFTDA, WIFPA & ASAP where it was decided to stop all shooting of Films, TV Serials, Web Series, Advertising Films & Digital Films from 19^th March to 31^st March 2020.

The decision on resumption of shoots will be reviewed on 30^th March basis on the situation prevalent at that time. In accordance with the directive issued by the Federation and other Production bodies, the Association of Film & Video Editors on 16^th March have taken a decision to stop all work from 21^st to 31^st March 2020 and further scheduling of work would be decided on 31^st March 2020.

 To understand the impact of coronavirus on advertising productions, we need to view the short-term and long-term impact on the business. 

I don’t think there will be much of a short-term impact on the advertising productions for two reasons. Firstly, most of the clients must have exhausted their marketing and advertising budgets due to the financial year coming to an end on 31^st March 2020. They would be waiting for fresh budgets from April 2020 to kick start their advertising campaigns in the next fiscal year.

Secondly, with the Indian Premier League originally scheduled from 29^th March, most of the IPL-specific advertising films would already have been shot and delivered or will be in the final stages of post-production and client approval.

 Having said this, besides the advertising films already shot for IPL, there will always be a requirement for a certain number of films that need to be shot and produced at the last minute for clients. These films were probably in the final stages of being awarded when the decision was taken to put all shoots on hold. Additionally, they will suffer and probably not get commissioned. Some clients also do films for the second half of the IPL season and if for any reason IPL gets curtailed, then these films, which were in the pipeline, would not go into production as well.

 According to me, the confirmed shoots that were scheduled between 19^th & 31^st March will be fewer in number for the reasons explained earlier and postponed. This postponement will not affect the overall business as these were already awarded jobs.

The decision to stop shoot and post production due to coronavirus will bring the advertising production business to a complete standstill in the remaining days of March but I am optimistic that all this will only have a marginal impact on the advertising production houses bottom lines for the current financial year.

 If the IPL starts as scheduled on 15^th April, provided a go ahead is given to resume shoots and post productions from 1^st April with strong precautionary measures, there is a possibility that the situation will reset automatically. Moreover, if the IPL matches take place behind closed doors, the need to communicate with audiences will be even more through television and digital advertising films.

 However, it is the long-term impact of the coronavirus that I am concerned about. It is still unknown whether the virus can be contained despite the best efforts of the government and the ramifications of that on the advertising productions, given that most of the shoots require a minimum of 50 people to be working in a group, which constitutes as a large gathering as per the government directive.

 The advertising production houses largely work on an 8-hour shift with freelancers and daily wage support crew on a job-to-job basis with a fixed cost or daily remuneration. If the directive to stop shoot continues beyond 31^st March, it would definitely impact the daily wage earners and freelancers associated with the business. So, it will be a tough decision for the Federation and other Production bodies to evaluate on the way forward and come to a decision.

 At the same time, there is a strong possibility that clients will put their campaigns on hold till the coronavirus situation clears or even if they do spend, they may spend much less than the previous year. Furthermore, they might also run the films produced earlier to be on the safe side. If this happens then it is going to hurt the advertising film production business as there will be fewer productions in the new financial year compared to the previous year.

Overall, long-term impact could be fewer films, lower budgets and further reduced margins. Hence, the year ahead does look like a tough one for the advertising production houses. In the next three to four months we will get to know how things will shape up as we brace ourselves for the impact of the coronavirus.

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com.