Will edtech see realigning of marketing spends? – Exchange4Media

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According to industry heads, edtech players will go for rationalisation and reprioritize their ad budgets but education will stay on top as a sector in terms of spending for some time to come

The post-pandemic era is turning out to be a complicated time for the edtech sector in India, a space that had become the third-most funded sector in the country last year, attracting investments upwards of $4.7 billion. But the past few months have seen a drastic shift in their attitude – from cost cuts to layoffs to slowdowns, all the major edtech firms, it seems like, are reeling under an unexpected crisis.
Just recently, one of the biggest edtech firms in the country, Unacademy openly shared its plans to streamline costs, including paycuts for the teams and its disassociation with the high-decibel property of IPL. And this could very well be the beginning for the rest of the edtech industry streamlining its media spends, experts opine.
Edtech media spends
The edtech industry has been quite aggressive on its media spends, especially after the pandemic hit in 2020. According to industry estimates, the sector must have spent around Rs 500 crore on advertising that year. In the last fiscal, Unacademy alone had spent more than Rs 400 crore on marketing and promotional activities, indicating the enormous contributions that the sector is making to the media industry.
Post-pandemic impact on spends
The pandemic gave an unexpected boost to the edtech space as people had no other option than using digital media to learn. The growth was unprecedented and the VCs money kept the momentum going strong. But with schools and colleges reopening, and people getting busier with their pre-pandemic routine, the category might see some changes in priorities.
Grapes CEO & Co-founder Shradha Agarwal quips, “Considering that the edtech funding is experiencing a period of acute slump, the companies will reprioritize their ad budgets. There will be a certain pause on marketing spends where instead of claiming high on big-ticket they will take an alternate route of marketing through other communication channels like TV and social media.”
However, the category will remain one of the biggest spenders for quite some time as Brand-nomics MD Viren Razdan puts it. “Education will stay top-of-pops as a sector in terms of spending for some time to come. However, this phase is blowing the ‘new normal’ myth and bringing back some of the old truths back. A lot of companies jumped to the bandwagon of gearing up for the new behaviour codes the pandemic brought about, assuming these changes to stay. The speed at which the market has bounced back to normalcy has perhaps taken a lot of them by surprise, so spending might go through a bit of rationalisation but edtech will maintain its investment levels for some time to come.”
FoxyMoron (Zoo Media) National Strategy Director Nakul Dutt agrees, “For the edtech industry as a whole, it is not a deal breaker and certainly by any means a reflection on property like IPL. It depends on the marketing and business goals of the organization, and which part of the business cycle they are in. If the objective is ‘establishing the brand’, IPL will certainly be one of the top properties in consideration.”
Agarwal rounds off the overall impact on the advertising industry saying, “Though the marketing spending will take a downturn, the brand-building activity will continue. It is just a temporary phase where the companies need to revise their volume of budget and scale of marketing. Considering that for the past few years the ad spend by the edtech companies has been the largest, they are going to curb their extra spending given to the uncertain market. But this will hardly have any impact on the advertising industry as there are many other sectors like BSFI, F&B, Travel and FMCG that will lead the AdEx.”
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