Warc Blog

Disappointing Diwali for ad sector

5 November 2013
MUMBAI: India's advertising industry is bracing itself for a seasonal slump, as agencies and media planners say they are expecting growth of around 7% in the final quarter of the year.

This stands in stark contrast to recent years, however, when the industry has recorded growth figures of between 30% and 40% during the festive period. Observers noted that the economic slowdown and high interest rates were taking their toll.

Financial services and consumer durables in particular appeared to be hit, while FMCGs had escaped the worst. However, there was not universal agreement on which sectors were most affected.

Ashish Bhasin, chairman India & CEO South East Asia at media marketing firm Aegis Group, said spend was down across a wide range of sectors, including real estate, consumer durables, automobiles, financial services, hospitality and travel.

"My fear is this spend will taper down even further and much faster right after Diwali," he told the Economic Times.

Only in the FMCG sector was there any sign of improvement, as Bhasin said this area had seen adspend increase by around 8%.

Sam Balsara, chairman and MD at advertising agency Madison World, concurred on FMCGs where he saw some brands advertising heavily. Mobile phone makers were also spending significantly unlike consumer durables makers.

And Kartik Sharma, managing partner at Maxus media agency, also reported FMCG and telecom brands, as well as retail, automobile and real estate, increasing spend."Sectors like finance/banking, given the current economic mood, are down and cautious," he added.

Recent surveys from Assocham, the Associated Chambers of Commerce and Industry of India, have noted the impact of economic conditions on families and business. Households were cutting their festive budgets by as much as 40%,while footfall in shopping malls, already half empty, was expected to fall 35%.

On the upside, the ecommerce sector was expected to get a boost, thanks to aggressive online discounts, the wide choice available and rising fuel prices. "Online shopping is likely to grow by nearly 250% during this festive season at various metros," said Assocham secretary general, DS Rawat.

Data sourced from Economic Times, Assocham; additional content by Warc staff

 
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