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Ad industry makes gains despite Diwali slump

13-November-2004
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Ad industry makes gains despite Diwali slump

The year has been mixed with several of the traditional advertisers reducing spends, and some new categories increasing their share.

The fireworks may not have been very spectacular this Diwali for the advertising industry, but the first nine months of this year have been good for the sector.

Consider the numbers. According to estimates compiled by AdEx India, the industry has grown by about 13 per cent, raking in revenues of over Rs 8,000 crore.

It is likely to end the year with revenues of Rs 11,800 crore compared to last year's Rs 10,400 crore. However, Diwali itself has not generated the same spends as previous years.

Mr Atul Phadnis, Vice-President, TAM India (of which AdEx is a part) said, "This year the industry has mainly grown due to elections and cricket."

For the first time, political parties advertised on television with both the BJP and the Congress spending anything between Rs 75 crore and Rs 100 crore. Also, the `India Shining' campaign contributed to the growth.

Media planners added that the historic Indo-Pak cricket series was another reason for advertisers to invest heavily. "Ad rates on Ten Sports touched an all-time high and several brands wanted to be associated with the event," they said.

Besides this, the year has been mixed with several of the traditional advertisers reducing spends, and some new categories increasing their share. For instance, confectionery, music systems and colour televisions cut down spending by 13 per cent, 26 per cent and 21 per cent respectively while pizzas went up by 80 per cent, oil sector increased spends by 28 per cent and chocolates witnessed a growth of 23 per cent.

Another departure from the past has been the higher growth rate in the print sector. Mr Phadnis said that in the last 10 years, television has grown faster than print.

"However, this year, print has managed to outperform TV marginally. While print grew by 15 per cent, television grew by 13 per cent. This happened due to emergence of new categories such as local retailers, educational and coaching centres and real estate," he added.

Meanwhile, the festive season of Diwali has been devoid of fireworks. Mr Sandip Tarkas, CEO, Media Direction (part of RK Swamy/BBDO) said, "Consumer durables as a category are big spenders during the festive season. Almost 50 per cent of their budgets are allocated for this period. But since the sector has not done well and is facing cost and pricing pressures, the spends have not been as much as the previous years."

Thus, the Hindi general entertainment and regional channels have had to bear the brunt of this trend. "However, the news and sports channels have been the biggest beneficiaries this year," said a Mumbai-based media planner.

With just one-and-a -half months to go for the year to come to an end, industry watchers hope that next year would be better than this one.

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