2008: A mixed bag for Indian advertising
2008 has been a mixed bag for the Indian advertising industry. The year began on a good note with advertisers from key sectors willing to spend ad monies.
By Amit Sharma, ET Bureau |
NEW DELHI: 2008 has been a mixed bag for the Indian advertising industry. The year began on a good note with advertisers from key sectors willing to spend ad monies. The high point was the inaugural edition of the domestic T-20 tourney-IPL-an event that marked the advent of perhaps India's biggest sustained advertising property.
But as the global economic crisis hit multinational companies from across sectors, advertisers became conscious and guarded. Spends dwindled, particularly from companies in the financial services, auto and real estate sectors.
Says MG Parmeswaran, executive director and CEO, Draft FCB Ulka; "Advertisers were bullish until September.
It was post this that a huge slowdown set in and there was widespread reservation among clients." Such was the overall impact that the Rs 19600 crore Indian advertising industry's growth has fallen to only about 10% from the nearly 22% growth rate that it had enjoyed for the past two years. "The next year will also see the same trend. In fact, growth could go down to only about 6% for the whole of 2009," he adds.
However, some like Rohit Ohri, Managing Partner, JWT, feel that 2008 has been a mixed bag for them. "While some of our clients in the real estate, financial services and tourism sectors cut back on advertising, others in the telecom and consumer durables sector increased spends. Our billings have not been impacted and we have kept pace with our growth over the last three years." But he too admits that 2009 will be a tough year. Growth for the whole industry should be 9%-10%," he adds.
Most of 2008 also saw knee-jerk reactions by the industry with most major agencies freezing recruitments. With advertising from hitherto robust advertisers like auto and financial sector companies witnessing a drop of about 40%, agencies were forced to cut costs and make only critical replacements. Says Anita Nair, CEO, Havas Media; "We are pretty close to achieving our annual target.
Figures depicting advertising volumes tell the same story. According to data from TAM, while ad volumes on TV had a 23% growth (in seconds) in 2008 as compared to last year, radio advertising grew merely 12% (in seconds) and advertising volumes on print witnessed only 5% growth (in column centimeters) in the Jan-Nov period in 2008 as compared to the same period in 2007.
Clearly, media planners had a tough time convincing advertisers to spend, while professionals in creative verticals also had to implement cost cutting measures.
Says Shashi Sinha, CEO Lodestar Universal; "This has been a funny year. We set out targeting 20% growth, revised target to 7% to 8% in September but are ending up with about 13% growth. But the first half of next year will be bad as the slowdown will play out and also, advertisers are generally muted during elections."
Agrees McCann Worldgroup executive chairman Prasoon Joshi; "It has been an exceptional year for the agency as we have got 32 new businesses in 2008. It has been fulfilling. We also hired four creative directors in the agency. While some categories of advertisers cut down their advertising, our new businesses have kept us buoyant. Next year's picture will also clear out by March."
But as the global economic crisis hit multinational companies from across sectors, advertisers became conscious and guarded. Spends dwindled, particularly from companies in the financial services, auto and real estate sectors.
Says MG Parmeswaran, executive director and CEO, Draft FCB Ulka; "Advertisers were bullish until September.
It was post this that a huge slowdown set in and there was widespread reservation among clients." Such was the overall impact that the Rs 19600 crore Indian advertising industry's growth has fallen to only about 10% from the nearly 22% growth rate that it had enjoyed for the past two years. "The next year will also see the same trend. In fact, growth could go down to only about 6% for the whole of 2009," he adds.
However, some like Rohit Ohri, Managing Partner, JWT, feel that 2008 has been a mixed bag for them. "While some of our clients in the real estate, financial services and tourism sectors cut back on advertising, others in the telecom and consumer durables sector increased spends. Our billings have not been impacted and we have kept pace with our growth over the last three years." But he too admits that 2009 will be a tough year. Growth for the whole industry should be 9%-10%," he adds.
Most of 2008 also saw knee-jerk reactions by the industry with most major agencies freezing recruitments. With advertising from hitherto robust advertisers like auto and financial sector companies witnessing a drop of about 40%, agencies were forced to cut costs and make only critical replacements. Says Anita Nair, CEO, Havas Media; "We are pretty close to achieving our annual target.
ADVERTISEMENT
This year, growth was impacted first by the economic turmoil and then by the Mumbai terror attacks, both of which instilled fear in advertisers' minds. We had a cold festive season. This year, there has been great correction in advertising rates. But next year will be tougher as the full impact of the slowdown will take shape."Figures depicting advertising volumes tell the same story. According to data from TAM, while ad volumes on TV had a 23% growth (in seconds) in 2008 as compared to last year, radio advertising grew merely 12% (in seconds) and advertising volumes on print witnessed only 5% growth (in column centimeters) in the Jan-Nov period in 2008 as compared to the same period in 2007.
Clearly, media planners had a tough time convincing advertisers to spend, while professionals in creative verticals also had to implement cost cutting measures.
Says Shashi Sinha, CEO Lodestar Universal; "This has been a funny year. We set out targeting 20% growth, revised target to 7% to 8% in September but are ending up with about 13% growth. But the first half of next year will be bad as the slowdown will play out and also, advertisers are generally muted during elections."
ADVERTISEMENT
However, Piyush Pandey, executive chairman and national creative director, O&M feels that 2008 was a good year for the agency. "For us, the year has ended as per our projections and expectations. So far, we have felt no impact of the economic slowdown thanks to the hardwork of our employees. In 2009, we will make all requisite changes, if required, to suit the needs of our clients."Agrees McCann Worldgroup executive chairman Prasoon Joshi; "It has been an exceptional year for the agency as we have got 32 new businesses in 2008. It has been fulfilling. We also hired four creative directors in the agency. While some categories of advertisers cut down their advertising, our new businesses have kept us buoyant. Next year's picture will also clear out by March."
ADVERTISEMENT
The Industry however, is not too hopeful off 2009, which it feels could be a real toughie.Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
