Rising consumer confidence bodes well for Diwali advertisers

Just as shopping events like Black Friday in the U.S. and Singles’ Day in China drive massive consumer spending, Diwali (the festival of lights) holds a unique place in India, combining spiritual significance with economic impact.

Rooted in centuries of tradition, Diwali is a cultural and religious festival celebrated by Hindus, Sikhs, Jains, and some Buddhists, and falls on Oct. 31 this year. Families invest in everything from festive goods — such as clothing, decorations and sweets — to big-ticket items like electronics, gold and even cars, each purchase symbolizing good fortune for the year ahead.

This year, increasing consumer confidence could help drive significant new business for advertisers, while changing media habits can offer new avenues to reach India’s growing consumer market.

Consumer spending during this year’s Diwali is projected to hit $22 billion. While these figures are a far cry from both Black Friday’s projected $75 billion in retail sales and last Singles’ Day’s $156 billion in gross merchandise sold across major e-commerce platforms, this year’s Diwali could see more consumer spending than usual.

A recent YouGov survey found the highest spending propensity among urban Indians since the pandemic. Recent research from Amazon Ads corroborated the trend, showing that 62% of consumers surveyed plan to spend more this Diwali compared to last year.

Meanwhile, the rise in popularity of open internet channels like streaming and podcasts, combined with new e-commerce models, means that brands will be able to count on new and more precise ways to reach India’s shoppers.

Nisha Eapen, client relationship head of digital marketing at demand-side platform Preciso, advises media buyers planning Diwali campaigns across channels like connected TV (CTV) and podcasts to consider rising CPMs, privacy regulations, and how to scale their efforts effectively. 

“Using programmatic platforms for audience targeting can help media buyers mitigate higher CPMs by focusing on relevant, high-intent consumers,” says Eapen.

“Dynamic creative optimization also ensures that messaging is tailored to different segments, improving performance without unnecessarily driving up CPMs. Buyers should use a mix of broader TV and digital channels to scale campaigns while leveraging CTV and podcasts for more-segmented, higher-engagement audiences.”

What media buyers should know

With Diwali shopping sprees kicking off weeks before the main event, brands focusing on this festive audience early on can capture a significant share of consumer attention.

“Gifting during Diwali is enormous. Unlike Black Friday or Singles’ Day, Diwali promotions often start weeks in advance. Media buyers should plan for an extended campaign duration to tap in to the festive season,” explains Sona Mazumdar, general manager at gaming and entertainment marketing agency Ampverse DMI Pulse, adding that employers often offer bonuses to employees to spend on family gifts.

Beyond India, Diwali offers a rich opportunity for brands to connect with the global Indian diaspora, particularly in North America, the U.K. and Southeast Asia, by crafting culturally relevant campaigns that resonate with this crucial demographic.

Media consumption during this period is typically focused on content that resonates with family values, celebrations, and entertainment, such as festive movies, TV shows, and advertising campaigns that tap in to the emotional essence of the festival. 

Podcasts also offer an ideal medium for brands. With dedicated and engaged listeners, podcast advertising can allow brands to craft nuanced narratives and reach audiences more personally than mass media, making them valuable for brands targeting a culturally attuned Diwali audience.

Strategically balancing local and national media becomes essential to reach audiences effectively during this period. National campaigns allow brands to create broad awareness, while localized efforts can engage communities more personally, particularly for brands looking to connect emotionally with Diwali shoppers.

Cadbury-owned Mondelēz’s award-winning campaigns have set the standard for Diwali, using emotional storytelling to help boost chocolate sales. Jan Harling, founder of Virtus Asia Consulting, a media buying consultancy, notes that by focusing on community values and emotional connections, Cadbury’s 2022 Diwali campaign featuring Bollywood actor Shah Rukh Khan encouraged local shopping and elevated its brand perception to one that genuinely engages its audience.

“Cadbury’s Diwali ad moves beyond virtual greetings by emphasizing real-world connections in 2024. It encourages people to visit their loved ones in person, reminding us that the genuine sweetness of the festival lies in togetherness — something that technology has increasingly diminished,” says Harling.

How will Diwali be different in 2024?

Ampverse’s Mazumdar predicts that usage of hyperlocal e-commerce this year might see a big jump from last-minute gifting, home decor and festive needs in metro cities. 

Flipkart, one of India's most prominent e-commerce players, recently launched Minutes, which delivers goods to shoppers in 10 minutes. The company predicts consumers will buy impulsively, so retailers and advertisers can tap in to Flipkart Commerce Cloud, which offers retail media solutions.

Flipkart’s rival Amazon launched the Great Indian Festival in 2023, offering discounted deals on branded appliances. This event attracted over 4 million new customers. The platform has brought the event back again this year.

“Traditionally, oversize Diwali ticket items are planned and purchased in advance or in store, so unless there is a significant cost difference, we will need to see if that behavior moves to hyperlocal. But we expect dry fruits, festive groceries, gifting, decor and more to move to hyperlocal,” says Mazumdar.

Preciso’s Eapen adds that with the growth of data analytics, brands can deliver highly personalized ad experiences based on consumer behavior, preferences and purchase history. Hyper-targeted ads can help ensure that the right message reaches the right audience at the right time.

“Brands that embrace personalized, emotional storytelling while adapting to new digital trends and sustainability demands can create powerful connections with consumers during this festive period,” she says.