No turnaround in ad spends despite bullish market sentiment

MUMBAI: The business sentiment may have turned positive following a slew of FDI policies but advertisement spends are not going to change dramatically.

The festival season has already begun but the advertisement spends are not as anticipated. The slowdown in ad spends since the beginning of this year will see no recovery yet, experts said.

“This festive season is pretty in its run and the mood is not very great. The advertising spends are not up to the kind of
expectations, there is still a slowdown,” said Allied Media COO P M Balakrishnan.

He said as far as the reforms by the government are concerned, “it’s the steroid put in the economy to create the right sentiment.”

Officials at other media agencies too said that though the business climate is better than earlier months of this year, it’s not better than the same period of last year.

Echoes OMD India COO Harish Shriyan, “Festive season is always better. Most of the advertisers in any case are spending money and they will continue to do so but the level and kind of money they used to spend earlier is not the same this time. Though it is better than the previous few months I don’t think there is any kind of major reaction because of the policies and all. I doubt that advertising spend will increase in these (the remaining) months (of the year).”

Balakrishnan feels the advertising spends on television will continue to be moderate this year. “Slowdown is going on. It’s not that people are withdrawing but also they aren’t going over-board and gung-ho this season.”

According to GroupM’s revised forecast, the advertising expenditure on television is estimated to grow at 5.6 per cent to gross Rs 148.12 billion in calendar year 2012 against earlier estimate of a 12 per cent growth.

Havas Media CEO India and South Asia Anita Nayyar agreed that the growth in spends this season will be in the same range of five
to six per cent.

She noted that the festival season has now started to look up and it’s high time as Diwali is just a little more than a month away. “Earlier the season preparation would start almost two to two-and-a-half months in advance. It’s always nice for the advertising industry to grow and I hope that advertisers will now start seeing advertising budgets as investments rather than expenditures now that the sentiment is improving.”

SMG CEO Malli CR, however, feels that ad spends on television are ok. “It is not that the things are terribly down, there are quite few sectors where things are ok, and they may not be growing at an exponential rate. Sectors like telecom and consumer goods are advertising and FMCG is anyway continuing to advertise so it’s not that the economy has come to a standstill.”

“Some sectors like BFSI, automobile are probably not spending as much as they would have. FMCGs put together account for about more than 55 per cent TV advertising. Everybody is hoping that Diwali should lead to something better. People are spending on digital and other mediums, so it’s not a bleak scenario,” Malli added.

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