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MUMBAI/NEW DELHI : India’s edtech companies, which splurged on advertisements till last year, have turned cautious, seeking out methods of digital promotion that are less expensive than chasing big-budget events on television. Companies and media planners said the industry, which was one of the top advertisers so far, will ease spending as school and offices reopen, reducing chances of enrolling for online courses.

“Edtech firms’ spend on TV advertisements, which is the most expensive marketing spending channel, has dropped by an average of 51% since January-February," said Chandrasekhar Mantha, partner, Deloitte India. Mantha said companies will instead opt for digital channels that have the potential of yielding higher conversions. “As the larger ones have already built brand awareness over the past couple of years, they will be more selective about the investments in television media and focus more on increasing traffic organically, search engine optimization (SEO), direct traffic, and building loyalty," he said.

Piyush Tripathi, senior business director, digital media and e-commerce lead, at digital agency Isobar India, agreed. “To aid discoverability, edtech firms are using Google and Facebook to create sharply targeted video and display campaigns and complementing the effort of search engines via organic and paid visibility."

The new cautious approach comes at a time when edtech firms are seeing their funding pipeline dry up, triggering layoffs and cost cuts.

“If capital becomes scarce, you look at different ways of becoming frugal," said Krishna Kumar, founder and chief executive officer (CEO) at edtech firm Simplilearn. The Blackstone-backed reskilling firm said it will continue with word-of-mouth and content marketing than go for expensive TV or sports promo slots.

Last week, leading edtech firm Unacademy shut down a global business unit, cut pay for founders and top executives, and discontinued complimentary meals and snacks, pursuing its ‘frugality’ aim. Founder Gaurav Munjal also said the firm will not renew its association with Indian Premier League (IPL) in 2023.

“The last three years with IPL were amazing. Our brand went to another level. I recommend all upcoming brands to partner with IPL.Our focus has changed. Hence the decision to not do IPL next year," Munjal tweeted from his handle @gauravmunjal.

IPL is one of India’s biggest sporting events, typically drawing large edtech players like Unacademy and Byju’s. In the 2021 edition of IPL, edtech firms like Great Learning, GradeUp and Byju’s spent an estimated 300 crore on IPL both on TV and digital platforms, Mint reported earlier.

Recent data from TAM Sports, a sports sponsorship measurement and consulting firm, showed ads put up by online education companies declined in this year’s IPL matches up to the first playoffs. In IPL 14 played last year, it was the top advertising category, with 10% share in total advertising volumes. In this year’s IPL 15, it slipped to No.4 with 6% share of ad volumes till the first playoffs.

The trend is consistent with data shared by Isobar India, whose Tripathi said edtech firms have reduced their marketing spends as a percentage of revenue over the years, from 11.6% in 2019 to 8% in 2021.

The change in business models, with online firms adopting hybrid forms, has also affected advertising plans. “Now, with offices reopening and time under pressure, there is little time for ‘get-ahead’ courses. So, it is a market correction, which was only to be expected," said Sandeep Goyal, managing director of advertising firm Rediffusion. He said the sector got overheated during covid as many people stayed home with enough free time and their aspirations being fanned.

Another factor behind a cautious approach is the high number of complaints from consumers against advertising by edtech firms about their courses. The Advertising Standards Council of India (ASCI), the self-regulatory body for the ad industry, noted that education as a category was the biggest violator of the advertising code set by the body. In its Complaints Insights report for 2021-22, it said that education companies made up 33% of all complaints by consumers.

ASCI chairman Subhash Kamat, however, doesn’t believe that edtech firms will cut down on advertising because of being pulled up, but they will certainly be cautious.

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