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ZenithOptimedia’s ad spends forecast suggests shift to accountable media in 2009

03-April-2009
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ZenithOptimedia’s ad spends forecast suggests shift to accountable media in 2009

After three years of 9-plus per cent growth in gross domestic product (GDP), India’s growth rate in the current year is predicted to see a dip to a level between 5-7 per cent, with the quarter ended December 2008 seeing 5.3 per cent, compared to the 7.6 per cent in the previous quarter.

In worst case scenario, the GDP growth would slide down to 4.7-5.2 per cent, while in usual course, the growth is estimated to be in the range of 5.8-6.3 per cent.

“Growth prospects deteriorate sharply on the back of the weak domestic demand due to drying up of available credit channels and capital outflows,” global rating agency Standard & Poor’s (S&P) said in its latest Asia-Pacific Economic Outlook report. However, the government’s fiscal measures should hasten recovery by 2010, it said.

Downturn hit advertising; ad rates renegotiated

The global downturn also had an impact on the advertising industry, with major players reducing their advertising budget. The growth rate of 20 per cent, which was predicted for 2008, was also not met, with the year registering a 13 per cent growth and the advertising industry closing at Rs 21,000 crore.

The impact will be seen in 2009 as well, though with the upcoming elections, the picture will not be as bad. Spends within the education sector will also increase with the increase in the number of universities. The telecom sector also sees an increase with a large number of CDMA players shifting to GSM and global players also entering the Indian market.

Advertisers are seeking esteem value in less, given that their budgets have gone down. TV and print are the worst-affected with even the strong players reducing rates and being open to innovations at much lower premium.

Advertising rates are being renegotiated with clients, who are looking for accountability of media. Thus, the shift will be towards more accountable media. Hence, digital media will be a key gainer. Radio, too, could gain because of its localised advantage and low entry cost.

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