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Now TV hit by demonetisation

News, 24 November 2016

MUMBAI: After consumers and retailers, broadcasters are now feeling the effects of the government's decision to withdraw large denomination banknotes as advertisers shelve campaigns, with print likely to be hit as well.

"Some advertisers are postponing activity especially among the FMCG sector," CVL Srinivas CEO South Asia GroupM, told Exchange4Media.

"As per current indications, about 20-25% of the total ad spend in the next few weeks could get impacted due to clients rescheduling campaigns," he said.

But even if these are run later when the demonetisation storm has blown over, "it is bad timing as the last quarter accounts for 35% to 40% of spends, this being the festive season", noted Ashish Bhasin , Chairman & CEO South Asia, Dentsu Aegis Network, adding that it was fortunate the development had come after Diwali.

"In general advertising will be impacted in the short term," he said, a period that is likely to extend to the end of the year.

"In the mid-term to long term it will have a positive impact," he added, "as advertising is dependent on GDP growth and these steps should reduce black money, interest rates will fall and growth will be stimulated."

While certain categories have reined in their spending – FMCG, impulse purchases, real estate and jewellery are most affected – others have increased it. "Categories like payment wallets, banking, financial services and insurance, and others have stepped up ad spends in the past few weeks and this is expected to sustain over the next few months," said Srinivas.

The government has also spent Rs 10 crore on advertising in support of demonetisation, but much of this has gone on outdoor, print and radio rather than television.

TV companies themselves are experiencing mixed emotions, as news channels, at least, have seen ratings increase as ad revenues dip.

Data sourced from Exchange4Media, Mint; additional content by Warc staff