Indian agencies enjoy boost

12 June 2012

MUMBAI: Marketers in India anticipate increasing agency revenues in 2012, despite signs of slowing economic growth on the subcontinent.

The Business Standard reports that larger agencies, including local units of global networks such as JWT and Leo Burnett, are set to outperform their smaller counterparts in terms of sales growth.

Figures for 2011 cited by the news source suggest that larger shops increased revenues by 25% from the year before, while agencies with annual business valued at less than 50 crore ($9.1m) were up by an average of 10%.

This divergence is set to continue, with some small agencies suffering revenue declines of up to 50% as the Indian economy suffers a slowdown, while larger shops forecast growth of up to 20% for 2012.

Latest IMF forecasts suggest India's economy will expand by +7.1%, down from 2011's +7.4%. Other analysts are gloomier still, with 43% of business leaders surveyed recently by the Confederation of Indian Industry agreeing that growth would drop below +6.5% this year

Representatives of large agencies speaking to the Business Standard indicated that their strong performance was due to the fact they derived much of their revenues from relatively "recession-proof" categories such as FMCG, consumer electronics, automakers and telecoms.

JWT India confirmed that roughly 80% of its billings came from these four sectors, while this total was 50-60% for Leo Burnett.

But other agencies specialising in other categories told the news source their revenues had declined.

Sanjeev Gupta, managing director of Global Advertisers, confirmed that the company's business had fallen by 60% since the beginning of 2012.

"We have a mix of retail, real estate, banking and finance clients. Most of them are not advertising much," he added. "Retail and real estate, in particular, are not doing well at all."

Data sourced from Business Standard; additional content by Warc staff