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Festive Spends: Caution is the new normal

11-September-2009
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Festive Spends: Caution is the new normal

The festival season is always the busiest time for advertisers, ad agencies – both creative and media, and media owners. Most media houses look at achieving annual targets in this quarter, and vying for the advertiser’s budget share gets intense.

The year 2008 was a dampener for those who depended on clients, such as real estate, the financial sector and so on, that had ceased any advertising towards the end of last year. For others, the ad budgets were marked and the advertisers played the gamble of spending. The end result nonetheless was a drop in the overall ad spends that were seen in Oct-Dec 2008, as compared to 2007.

This year, media experts believe the story is different. The positive streaks appear slightly stronger and some media experts are even expecting a 20 per cent increase in ad spends from Oct-Dec 2009 than what was seen in the same period in 2008. Nandini Dias, COO, Lodestar Universal, said, “Most of our clients have already got very active and the campaigns are beginning soon too. One reason for some clients also was the long gap between the time they last did a major marketing activity, and the market scenario is definitely recovering too.”

However, MediaVest Worldwide’s General Manager, Dinesh Rathore, has a slightly different perspective. He said, “I would not say that we are back to being the way things were in Oct-Dec 2007. Clients are still very cautious. I do expect them to loosen the purse strings a bit more closer to the festive period, so that would mean that instead of the 45-day blitz, there would be a 25-day blitz, but that is the way things are right now. Everyone is more conservative today.”

For Rathore, in fact, the last year was not as bad for one key reason. “Most of the advertisers had already set aside their budgets and they took the chance of spending and connecting with the consumers. So, last year, to some extent, the spends were there in the market, and it was alright. This year, everyone has been careful from the beginning and though there is recovery, and global recovery at that, the sentiment to spend has not really set in,” he noted.

To Spend or Not to Spend

While there is a divided school of thought on the influx of funds in the market in the festive season, most media owners are still speaking about the market conditions continuing to be tough, albeit getting better. Maheshwar Peri, Publisher, Outlook India, observed, “There is recovery month on month, and if things go this way, by the end of this year, we would be spending at par with what was being spent last year, but not what was being spent in 2006 or 2007.”

Peri agreed with Rathore’s view that the last festive season had the advantage of a buoyant mood, when the budgets were being decided on at the start of the year. He said, “Most media owners had taken care of two things – cutting down the costs and getting at least half the revenues of what one was getting. This has had an impact on the bottomline. That caution in attitude towards the business has most definitely not changed even though the market is showing signs of recovery.”

Dias pointed out that some of the sectors like retail, electronics, durables, financial sector had already started marketing again. She further said, “Channels are telling us that their inventories for the period are full, they have also hiked up their ad rates, so clearly something is going right there. In fact, the cost per thousands for regional channels is higher than that it is for national channels.”

The sentiments this festive season are mixed, but are clearly skewed towards the positive side.

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