The Indian ad market faces flat growth in 2001 and contraction in 2002, says Sorab Mistry, ceo of McCann-Erickson Worldwide in India.

Multinationals account for over half the country’s advertisers, 70% of them US-based, making India’s ad industry more vulnerable than most to the global downturn. In addition, a majority of its leading agencies are units of US or UK-based networks.

Furthermore, the threat of military action so close to India has lowered 2001 ad growth expectations from sluggish to flat. “The sentiment is negative and mindsets scared,” explained FCB Ulka managing director Anil Kapoor. “Before, ad industry growth was 4% to 5% on average, but now it’s anyone’s guess how low it will get.”

Although no scheduled campaign launches have yet been postponed by major advertisers, the anticipated cuts in ad budgets are expected to leave no sector unscathed.

News source: Advertising Age - International Daily