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Meltdown in ad-spends as clients tighten belts

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Meltdown in ad-spends as clients tighten belts

The advertising industry is finding that its business projections for this quarter of the present fiscal year is going awry by as much as 20 per cent or more.

Many are reeling under the flattening spends from once generous dotcoms, with that euphoria vapourising. And the staple, big-spend categories like FMCGs, and consumer durables, and the rocky auto segment are beginning to tighten their ad spend belts with flattening sales charts and volumes growth. The big companies like Hindustan Lever to BPL, L’Oreal and a bevy of blue-chippers are either slashing or pruning their ad budgets for the days ahead.

Average ad growth rates this year for the Rs 7,500-crore ad business was projected at 25 per cent. If the current trend continues over the next six months, it will barely hit 8-10 per cent.

According to the industry sources the number one agency Hindustan Thompson Associates has seen a Rs 40-crore slash from Hindustan Lever and that other club agencies O&M and Lowe Lintas are also facing the brunt.

Companies like LML Vespa, Ceat, Telco and others in the auto ballgame have cut ad-spends by about 25 per cent

At the start of this year, sentiments were good, with packaged goods pushing into semi-urban areas and looking at the second phase of consumer demand. But then various wrenches were thrown: a global dotcom bust happened, the stock markets got jittery and with it consumer’s purchase attitude, and then the monsoons proved erratic.


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