The Indian advertising industry is not immune to the global economic slowdown that is impacting businesses worldwide. With companies resorting to handing out pink slips and cutting down on expenditures by 20 per cent, the ad industry is beginning to face the brunt of this slowdown. Diwali didn’t bring much cheer and the outlook remains glum.
exchange4media spoke to a cross-section of industry people to gauge their reactions to the current economic crisis. Most are in favour of pre-emptive measures to deal with the volatile market conditions. While some consider BTL activities as an escape route, others plan to play it by the ear.
Upsurge of BTL activities
Anita Nayyar, CEO, Havas Media, said, “Since ad agencies are regarded as an expenditure for a company, they will be the first to be affected by the economic downturn as companies will cut costs. The volatile market conditions will make the companies pick and choose the media to be used for advertising. The flamboyancy of 360-degree initiatives will be diluted.”
According to Shripad Kulkarni, COO, Allied Media, “With the economic downturn, the obvious choice is to resort to all activities that bring the customer closer to the product. Therefore, the apt alternative is to take refuge in BTL activities. Also, new media like the Internet will continue to grow despite the economic conditions. While the financial sector, consumer durables and realty are feeling the pinch, the FMCG sector is unperturbed. There will be reason to worry if the global economic scenario doesn’t improve in months to come.”
“However, we don’t intend to revise our plans. We completed our first year of operations in April 2008 with billings of over Rs 400 crore. We have recently made fresh recruitments. Therefore, owing to our strong fundamentals, we will continue to grow from strength to strength regardless of the market vulnerability,” Kulkarni asserted.
Rohit Ohri, Managing Partner, JWT Delhi, said, “We haven’t really felt the implications of the economic downturn, but it will definitely affect the revenues of ad agencies. They will gear up for sales promotions, on-ground activities and other sales-driven initiatives. These BTL activities will not feel the pinch and hence, they would be the saviour in the economic slump.”
Anamika Mehta, COO, Lodestar Universal, observed, “The present economic conditions haven’t kicked off as dramatically in India as in other countries. But, how it eventually spans in months to come is uncertain. Acknowledging this fact, the ad agencies have become cautious and are playing it by the ear. Considering that India’s GDP was estimated at 7-7.5, the ad spends will not be spiked by exorbitant amounts.”
She added, “In terms of ad spends, the automobile, real estate and hi-end consumer durables sectors might see a dip, but the FMCG segment and lifestyle sector, by and large, would not be the worst-hit.”
Mona Jain, India Head - Strategic Investments, India Media Exchange, said, “Clients are definitely cutting costs, but there are no direct insinuations on the ad agencies. The advertisers are looking at the New Year as an opportune time to sell of their stocks. The low ebb of the marketing season will concentrate the ad spend to necessities like FMCG products, whereas high-end consumer durables will witness a tough time.”
Kunal Gill, Creative Director, Bates 141, remarked, “The economic downturn has beckoned belt-tightening in terms of ad spends. The ad agencies are definitely resorting to pre-emptive measures to prevent losses. The festive season hasn’t brought much festivity with it. The increments and bonuses weren’t phenomenal either. It has been a tough year and hopefully the global scenario should improve.”
With the industry in the ‘think-before-you-leap’ mode and cutting costs wherever possible, there is not much improvement in site in the current situation. Watch this space for further developments.
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