Others The Meltdown: With cut in ad spends, research to play key role in identifying right media mix

The Meltdown: With cut in ad spends, research to play key role in identifying right media mix

Author | Swapna Rahul Shah | Friday, Dec 19,2008 6:56 AM

The Meltdown: With cut in ad spends, research to play key role in identifying right media mix

If there is one sector that is expected to benefit in the current economic slowdown, it is research. With advertisers tightening their purse strings and demanding every paisa’s worth, it has become imperative to choose the right media platform for maximum impact. And research can help the advertisers and agencies in this in a big way. exchange4media speaks to some industry leaders to gauge the growth of research in such trying times.

While every advertiser worth his salt talks 360 these days, that may or may not work, and could sometimes even be an overkill. To identify the right media mix has become important, which proper research would be able to do. Similarly, if media planners had to choose one media over the other on the basis of return on investment (ROI), it is research that helps them to take an informed decision.

According to industry experts, what is working in research’s favour in times of economic slowdown is the fact that the cost of research in India is too low to be impacted in a significant way.

A lighthouse for a ship in deep sea at night

Sam Balsara, Chairman, Madison World, was of the opinion that the slowdown would not have a negative impact on research. According to him, “In a slowdown, you need research a lot more than you need it in normal times. In a high growth economy, you can in any case sell media even without research. Now, when advertisers are choosy about the platforms where they would be spending their advertising budgets on, you need research more, and you need different cuts of that research. You need more sophisticated research to convince different segments in order to see where to advertise and how to advertise.”

Balsara further said, “I don’t think media owners would make the mistake of unsubscribing from research in any form at a time like this.” On similar lines, Sabina Solomon, General Manager, Media Research Users Council (MRUC), said, “Research cost in India in any case are very low, if you go to see the cost of research as a percentage of the turnover of the industry. For example, if you take print advertising, the cost of research as a percentage of total print advertising has always traditionally been very low. Therefore, I don’t expect research being impacted to a major extent due to the global meltdown because traditionally research cost has always been a minuscule share of the total cost. And whatever average impact that has to happen in a slowdown, will definitely happen.”

Hansa Research’s Ashok Das, too, said that research cost in India was very low as compared to other expenditures for most people. “But still there will be some kind of impact on research cost due to the current economic conditions,” he added.

MRUC technical committee member Amit Ray explained, “Is research being impacted – the answer is ‘Yes and No’. Because in a ‘hyper competitive’ world, there is no substitute for third party learning through research. For everything that we do, we have got to satisfy ourselves that given the available information, this is the best decision. Actually, now is the time when research will really be used and the demand for more and better research will surface. When all businesses witness double digit growth year on year for years, you don’t need research. But in difficult time, research is like a lighthouse for a ship in deep sea at night. I see print owners coming forward and focusing on research that answers all their unanswered queries and which helps them handle their businesses better. Also, the slowdown may force a relook at some aspects of print research that have been in practice for a long time.”

Steps to be taken despite the slowdown

Solomon pointed out, “Steps are being taken to grow research, but not because of the slowdown or not from the perspective of growing the research industry, but from the perspective of making it more relevant to the end users.”

Das added here, “You can’t do much if the people are not ready to spend. There will be some slowdown in growth anyway. We will have to go to more potential buyers and look at a higher level of marketing and planning services to achieve the revenue target.”

Stating that he couldn’t comment on the commercial aspect of research as the question was about growth, Ray said, “While research or the demand from research users will grow multi-fold – both vertically and horizontally – it will push the envelope and most likely research providers will come up with better research to create better understanding of the clichéd ‘ROI’.”

H further said that in tough times every business would try to reduce cost, but running businesses would do better to invest in relevant learning through research as in a hyper competitive market there would surely be a premium on survival.

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