Home > companies > start-ups > Hyperlocals plan more TV ads to grow reach

New Delhi: Hyperlocal firms have jumped on to the television advertising bandwagon, following their larger e-commerce rivals, much to the delight of media companies.

Sure, at $2-3 million, their campaigns are not as expensive as that of the e-commerce firms, but it all adds up. Some experts say such cash burn is suicidal for the start-ups, who insist their return on such spending is high enough.

Nuvo Logistics Pvt. Ltd, which runs hyperlocal delivery firm PepperTap, earlier this week launched its first marketing campaign “Bahut Aasaan Hai" (It’s very easy) on YouTube, social media, radio and print, and plans to launch television commercials in the next two months.

“We are evaluating how digital works for us. Based on that, we will launch television commercials," said Tahseen Quadri, vice-president, marketing, PepperTap, without commenting on the budget for the campaign.

Grofers India Pvt. Ltd, which owns hyperlocal delivery firm Grofers, and Solvy Tech Solutions Pvt. Ltd, the company behind hyperlocal mobile marketplace Zopper, have launched their campaigns with budgets of $2-3 million each.

This amount of spending by such young start-ups was unheard of till almost a year ago and indicates their urgency to scale up, and at any cost. Grofers ran the television campaign, “get it", for a month-and-a-half beginning September, while Zopper’s ad with a tagline “local store ko aap tak layee," (We bring the local store to you) went on air earlier this month.

Ashneer Grover, chief financial officer of Grofers, said the campaign was more of a branding exercise and added that a follow-up campaign across TV, print and online is in the works. He declined to put a number to the cost of the new campaign.

Experts see a touch of extravagance to these campaigns.

According to Harish Bijoor, an independent brand expert and business analyst, a 30-second television slot during prime-time costs between 80,000 and 600,000, depending on the channel and programme. He said an extra level of frenzy can be seen with smaller start-ups fighting for a limited space on screen.

“There is a herd mentality today. Everybody wants to be seen and heard about. The focus seems to be more on valuations and catching eyeballs than the reality of getting the business moving. The clutter factor is very high," he said.

Another expert advised caution.

Sandeep Ladda, partner and national leader of e-commerce sector practice at PricewaterhouseCoopers India, also said at this age, start-ups should be very cautious about how they are spending money. “Television quickly eats up money. A customer will typically download the app the same day he sees the advertisement. The recall value of television commercial is frankly a day or two," Ladda said.

However Zopper claims the television ad has worked tremendously well. According to Neeraj Jain, co-founder, the firm is seeing 100,000 downloads a day against 10,000 in October.

“Advertising did not just ensure recognition among consumers but also created a sense of authenticity and brand value in the mindset of future employees. It is not just about the number of downloads or hits on the site but an overall return on investment," he said.

These start-ups have raised between $10 million and $50 million overall. In July, Mint estimated about 2,000-4,000 crore is likely to be spent by 56 e-commerce brands on television this year. Last year, the firms spent 1,240 crore on TV ads, accounting for 8% of the overall television advertising of 15,500 crore.

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