×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Ad spending set to fall sharply in ’09

Ad spending set to fall sharply in ’09
Comment E-mail Print Share
First Published: Wed, Apr 15 2009. 11 04 PM IST
Updated: Wed, Apr 15 2009. 11 04 PM IST
Mumbai: Two leading forecasters have revised down their projection for advertising expenditure in India this year as Asia’s third largest economy slows after growing around 9% for four years.
Media specialist ZenithOptimedia has predicted in a global report released on 14 April that ad spending in the country will grow by 6.4% in 2009, half the 13% growth it had predicted in December.
WPP Group Plc’s global media specialist GroupM recently said India’s ad spending growth in 2009 is likely to be 6%, sharply down from its December prediction of 8.9%.
The revisions are in line with international trend of declining advertising outlay. Globally, ZenithOptimedia expects advertising expenditure to actually decline by 6.9% in 2009. GroupM expects it to fall by 4.4%. For India, ZenithOptimedia said advertising expenditure expanded by 18.9% to Rs214 billion in 2008. The decline it now predicts for 2009 could have been worse without increased spending on account of the general election, it said. Print ads will be the worst affected, likely to grow by a mere 1.2%.
Online and radio ads are set to gain, with expected increases of 30% and 16.6%, respectively, in 2009, ZenithOptimedia said. The forecaster also expects education and telecom advertising to grow.
“The 2008-09 period is now a more serious advertising recession in scale, duration, and relative to the global economy, than the extraordinary 5.1% real-term, post-dot-com global advertising correction of 2001,” said Adam Smith, futures director at GroupM, the largest single buyer of media in the world. Its figures are based on a proprietary revenue database across media.
The figures released for India are based on findings in January, when conditions seemed to have worsened, said R. Gowthaman, leader of South Asia, Mindshare, GroupM India Pvt. Ltd.
Chief executives of advertising agencies agreed with the gloomy predictions. Some said the first half of the year will be better than the latter half, mainly due to the general election and the Indian Premier League cricket tournament, both being held in April-May.
“The big question is the second half, which if things carry on as they are, could be flattish for big agencies and tough for the small agencies,” said Ranjan Kapur, country manager, WPP Group.
The uncertainties are not just economic. Shiv Sethuraman, chief executive of TBWA India Pvt. Ltd said there is also uncertainty over internal security and political scenario.
Nirvik Singh, chairman, Asia Pacific, Grey Group, said ad spending growth will be at best 5% this year, since people are in a wait-and-watch mode.
The 5% growth prognosis was also held by L.S. Krishnan, president of Radar, Mudra Communications Pvt. Ltd, who, however, said public sector enterprises are likely to spend more on advertising this year. Lowered advertising rates could also see more business from small and medium-sized firms, Krishnan said.
marion.a@livemint.com
Comment E-mail Print Share
First Published: Wed, Apr 15 2009. 11 04 PM IST