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20% of total ad-spends likely to be impacted on the back of demonetisation

23-November-2016
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20% of total ad-spends likely to be impacted on the back of demonetisation

While the nation at large grapples with the effects of de- monetisation, the advertising industry which sees a significant portion of festive spends come in the last quarter of the year is considerably impacted for the time being. 

Decrease in consumer off take and liquidity has led to advertisers cancelling or postponing advertising activity, the immediate impact of this is being felt by TV channels and media agencies; industry leaders predict the print industry will also be feeling a deeper impact soon.

“Some advertisers are postponing activity especially among the FMCG sector. As per current indications about 20-25% of the total ad spend in the next few weeks could get impacted due to clients rescheduling campaigns. In most cases the activity will be rescheduled to a later date. It is difficult to predict how much the adex will ultimately lose at this stage.” shares  ‎ CVL Srinivas CEO South Asia GroupM.

“It is not cancellation but deferment, that being said, it is bad timing as the last quarter accounts for 35 to 40 percent of spends, this being the festive season, fortunately this development happened after Diwali. In general advertising will be impacted in the short term. In the mid-term to long term it will have a positive impact as advertising is dependent on GDP growth and these steps should reduce black money, interest rates will fall and growth will be stimulated.” adds Ashish Bhasin , Chairman & CEO South Asia - Dentsu Aegis Network, Chairman Posterscope & MKTG - Asia Pacific.

FMCG, impulse purchase category, real estate, jewellery are among the most impacted categories currently.  

“Apart from FMCG, other sectors had anyway slowed down ad-spends post Diwali so we do not see any major impact. On the flip side, categories like payment wallets, BFSI and others have stepped up ad spends in the past few weeks and this is expected to sustain over the next few months,” shares Srinivas. 

“The impact of demonetisation will last till 31stDecember and after that market is expected to bounce back. Though the effect of the demonetisation on ad- revenues is trickling in, it may be quite steep in the days to come,” predicts Rajeev Chaddha, Manager Sales & Marketing, EENADU. 

While the advertising industry is reeling under the short term impact of de-monetisation; on the other hand news channels are enjoying an increase in viewership. 

Sudhir Chaudhary, Editor Zee News said, “So far we have witnesses increase in news viewership after the demonetization move was announced by the government. While the viewership has seen a quick jump, the ad revenue on the other hand might go down in the coming time as a lot of companies, especially the ones which are not listed and related to the real estate sector and even many pan masala companies, may feel the pinch of the demonetisation move. This in turn will affect the ad sales to some extent.”  

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