Slowdown bites advertising; corporates cut ad spends
India has slowed down and companies are cutting back on spends on marketing and advertising. In its mid-year forecast, GroupM has revised the adex growth in FY'13 to just 8.5 percent.
September 18, 2013 / 22:35 IST
The slowdown has officially hit the media industry. Group-M, India's largest media buying company, says ad spends will grow by 8.5 percent this year. In January, it had forecast a 9.9 percent growth rate. It is a serious downward revision.
Advertisers, especially in sectors like FMCG (fast moving consumer goods), telecom and banking and financial services have cut back their spends reports CNBC-TV18’s Animesh Das.
Also Read: Media space sees low deal volumes in 2013; outlook brightIf the screaming headlines haven't been proof enough these empty hoardings should be. India has slowed down and companies are cutting back on spends on marketing and advertising. In its mid-year forecast, GroupM has revised adex advertising expenditure) growth or the rate at which ad spend will grow in FY'13 to just 8.5 percent. That's because ad spends from July to December 2013, are projected to grow only by 4.7 percent as opposed to the expected 7.3 percent first predicted last year. CVL Srinivas, chief executive officer, GroupM South Asia said, "To stay away from inflationary options is the general mood right now amongst clients and agencies. Stay away from inflationary media options, look at digital, look at emerging media and invest there and keep your brands salience going."Print, that has the second largest share of the ad pie, will see the biggest decline, growing at a measly 0.7 percent in the second half of 2013 as opposed to the original, expected 4.8 percent. While TV, Radio and Cinema have been hit, Digital and Out-Of-Home advertising are expected to live up to initial projections. As always, media planners are looking towards the festive season for a rescue. Srinivas said, "The sentiment is pretty okay when one looks at smaller towns and one looks at rural India. One is like you said the good monsoon that has happened. The other is the lot of money which is flowing down to smaller towns through all the central schemes etc. So, there is a bit of buoyancy in that sector, that space especially. On the opposite side if you look at the larger metros, if you look at organized trade and so on whatever we are picking up from our clients, things seem to be kind of slowing down there". If you are looking for a silver lining in those predictions then it is this. With elections on the horizon, political parties will increase spends and both the auto and media industry are expected to continue with new launches. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
