This year will perhaps go down in history for all the not-so-pleasant reasons. The Rupee depreciation and the debilitating economic situation have rattled the confidence of corporates in India, including the big players in the advertising, media and marketing industry. The worst phase of the economic slowdown was during the months of August and September, when the Rupee sank to an all-time low of 68.84 per US Dollar.
There’s an acronym that describes such a dire crisis — VUCA, which stands for Volatility, Uncertainty, Complexity and Ambiguity. And this is not unique to our country — other parts of the world are going through worse, more recently the US, which experienced a temporary government shutdown, primarily due to funding issues.
“Whether it is a crisis in Syria or the shutdown in the US, the events which happen thousands of miles away now affect our working environment too,” explained Hemant Bakshi, Executive Director – Home and Personal Care of Hindustan Unilever (HUL) and Chairman, ISA (Indian Society of Advertisers). “We have seen a lot more volatility than what we have in the past like the recent Rupee fluctuations,” he added.
A VUCA crisis affects everything — company strategies, policies, investment plans and most importantly, the morale of the people, because their jobs might be on the chopping block. However, it also offers an opportunity to focus strongly on key tasks with greater clarity, and even rework certain plans innovatively. Every Rupee becomes accountable and has to be justified.
“The sentiments have been dampened in the last few months,” said Vikram Chandra, Group CEO and Executive Director, NDTV Group. “In any economic slowdown situation, there are concerns about the future and the sentiments tend to go down. However, I think the worst is been behind us and things are starting to look up for both, the Indian economy and the Indian media,” he added.
The beginning of October has seen a little ray of hope for business drivers, with the start of the festive season and the upcoming elections. Here’s a look at how select media and creative agencies are pulling up their socks and trying to turn around the VUCA situation within their domains.
TV networks will go through a fairly cautious festive season – from the shaky implementation of digitisation, to the messy debate about the relevance of 10+2 ad cap regulations, to certain companies handing out pink slips to close to 50 per cent of their employees — the TV broadcast industry has been through quite a rollercoaster ride this year. And the current festive season doesn’t seem to be its saving grace either.
“The first six months went off well for us as IPL was in the first quarter,” said Rohit Gupta, President, Multi Screen Media, which owns Sony Entertainment Television. “However, we have seen a slowdown since September. We haven’t seen the response for Diwali like the previous year — ours will be a weaker Diwali this year after quite some time,” he further shared.
Usually, sectors like consumer durables, automobiles, handsets and telecoms invest largely during the festive season, starting late September; however it hasn’t fired up the way it should. A recent survey by ASSOCHAM also predicts that consumer durables, jewellery, FMCG, electronics, automobile and real estate will slash their ad budgets and spend sparingly on promotions during the festive season.
Ashish Sehgal, Chief Revenue Officer, ZEEL too added that brands are not going to splurge the way they used to and one will have to see how November and December will fare.
Additionally, experts in the industry believe that to see through the coming festive months, various networks and advertisers will strike ‘customised deals’, which will benefit both parties equally. While it might seem that the sector is thinking of a collective solution, it might lose advertising revenue in the coming quarter to other media platforms. While a few networks have been in the news for laying people off because of the slowdown hit, Tarun Katial, CEO, Reliance Broadcast Network Limited, is of the belief that this had to be done to cut down the excess initially hired for that network’s exponential growth. “There is an external pressure and there is also internal accumulation of flab that all of us in media companies in anticipation of stupendous growth have done,” clarified Katial. “Everyone is shedding a bit of flab and I don’t think it’s ‘downsizing’, but simply ‘right-sizing’ and the environmental side will balance later on,” he stated.
However, considering the upcoming elections, most Indian news channels seem to be positive about generating desired viewership numbers. “Large corporate companies are ready to pay a premium to be on those special news properties around elections, as there is a serious viewership involved in watching election programming,” said Avinash Pandey, COO and CRO, MCCS, an ABP Group Company. “Clients are seeing value in this and are assigning premium,” he added.
Navigating a VUCA world
'Navigating a VUCA World’, a one-day conference, in partnership with exchange4media and presented by Star TV, is hosting the first ever global CEO conference on October 30, 2013 in Mumbai, India. The goal of this conference is to sharply dissect the tough times we are facing in the current economic situation, and to find out how organisational processes and practices need to be recast to deliver to this new VUCA world.
Paul Polman, Chief Executive Officer of Unilever Global, will be the keynote speaker at this conference. He will share his thoughts on how business leaders can navigate in these tough economic situations. His views on the subject are thought provoking and widely acclaimed in the corporate world.
Rahul Bajaj, Chairman, Bajaj Auto, India and Head of Bajaj Group, is another important dignitary who will share his perspective of challenges faced by Indian brands and organisations. Bajaj and Polman will also engage in a dialogue on VUCA.
Other speakers at the conference will be R Gopalakrishnan, Director, Tata Sons; Manu Anand, President, India and South Asia, Mondelez International and Managing Director, Cadbury India; Marten Pieters, Managing Director and CEO, Vodafone India; Pawan Munjal, Managing Director and CEO, Hero Motocorp; Ravi Kant, Vice Chairman, Tata Motors; and Sanjay Behl, CEO – Lifestyle Business, Raymond.