'Awareness of the brand goes down if the company focuses on short-term profits'

Panel comprising B Thiagarajan, Arnab Banerjee & Mahalakshmi Narayanaswamy and Vikram Sakhuja addressed the correlation between stock market & brand building, at the launch of the PMAR 2022

e4m by exchange4media Staff
Published: Feb 17, 2022 12:48 PM  | 2 min read
PMAR 2022

The Pitch Madison Advertising Report 2022, was unveiled on Wednesday. The release of the report was followed by an insightful panel discussion on 'Does the stock market reward brands who sacrifice brand building for short-term profits?' The panel had B Thiagarajan, Managing Director, Blue Star Ltd., Arnab Banerjee, Chief Operating Officer, Ceat Ltd., and Mahalakshmi Narayanaswamy, Editor – Moneycontrol, and the discussion was moderated by Vikram SakhujaPartner and Group CEO Madison Media and OOH. 

The conversation started with a discussion about how companies constantly face stock market-related pressures.

“You have very little control on how the stock market will behave. Therefore, a CEO should be interested in the shareholders and the value creation. Today, I am not surprised at all with the markets exploding. Being in this industry for many years, I have seen a vast change in the dynamics of the growth, and the industry. I believe that today stock market behaves the way we deliver, than the other way round,” said B Thiagarajan.

Talking about brand building and short-term decisions taken by the companies, Arnab Banerjee said, “It is all about the consistent story of a brand, which has to be maintained with all stakeholders, including business partners and employees within. So one can’t just swing in and swing out with the strategies quarter-on-quarter basis. As long as the story is built with consistency, the stakeholders understand the decisions taken by the company for long and short terms.”

He however added that one needs to strike a balance. “The awareness level of the brand goes down if we focus on the short term.”

When asked if there is any relation with ad spends and quarterly stock market returns, Mahalakshmi Narayanaswamy said, "There is absolutely zero co-relation between ad spends and stock market returns. Several such numbers which I have read disclose this fact. Several brands spend more or less on advertisements, but that does not affect stock market returns."

 

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