Signals are for a mild ad slowdown: Mindshare's Lala

MUMBAI: The ad slowdown is not a serious worry at this stage but is beginning to bite mildly, a senior executive at Mindshare said.

Slashing the early forecast, Mindshare principal partner Jai Lala pegged the growth figure at 8-10 per cent this year on the back of a weak GDP growth and a dip in sports advertising revenues.

"If in the recent years we were growing at 18-20 per cent, we will now grow at 8-10 per cent. It‘s not degrowth but slower growth. A good quarter will, however, bring the buoyancy back," said Lala.

The Mindshare executive believes that the upper limit is the most likely speed the ad industry will grow in India this year but does not rule out certain slowing influences that could dampen the mood.

"We should be growing at 10 per cent unless we are pulled down by bearish influences," he said.

Mindshare had at the beginning of the year predicted that the ad industry would grow at 12 per cent, expecting it to touch Rs 373.97 billion.

Lala feels that the dip in financial advertising would be more or less made up by the FMCG companies as they come out with new launches and increase spends due to intense competition in the sector.

The retail sector is also witnessing a slowdown. "Print would be more affected since both financial services and retail are heavy ad spenders in that medium. Finance is co-related to the Sensex and we could see a bounce back if the markets start doing well," explained Lala.

Another drag down has been the Indian Premier League (IPL) which fetched lower revenues than last year. "We were anyway expecting the sports genre to be hit as we had the cricket World Cup last year. The reduction in ad spends on the IPL may be attributed largely to the fact that consumer durables and automobile categories did not spend as robustly on the property as last year," averred Lala.

Though it is still early to ring the alarm bells, expect a mild ad slowdown this year if the economy doesn‘t slump further.

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