India’s advertising industry eyes a gloomy Q1

India’s post-festive season always sees an advertising slowdown, but agencies and media companies are more than usually concerned this year as maco-economic and geopolitical factors start to bite. 

Why it matters

While some of these factors aren’t exactly new – the effects of war in Ukraine and China’s COVID-19 lockdowns have been playing out for many months now – India’s advertising industry had largely managed to avoid feeling their impact. The final quarter of 2022, for example, was boosted by the festive season and the ICC T20 World Cup.

But as economic growth stalls and brands rein in their advertising spending, “things look quite bleak for us in this quarter”, one senior agency executive told e4m. Indeed, things are so gloomy that some in the industry don’t expect even IPL 2023, which starts in April, will turn the situation around.

Factors at work 

• Increased raw material prices have led to a reassessment of business costs and ad budgets have been a casualty.
• Fears of recession have prompted advertisers to rebalance spending away from more expensive traditional media formats and towards lower-cost digital formats.
• Start-up clients are reported to have slashed ad budgets to almost zero, in large part a consequence of venture capital funding being scaled down.

A media expert says 

“Indian media companies may have to adapt to the new economic reality by finding ways to reduce costs, diversifying their revenue streams, and focusing on digital platforms. They may also have to be more creative and innovative in order to attract and retain customers.”

Sourced from e4m