Advertising industry expects slim growth this festive season

The advertising industry is not in its normal celebration mood this festive season as agencies and media planners expect just about 7% growth during September-December, a far cry from up to 40% growth they are used to during this period. Several marketers are advertising less this season because the overall economic slowdown and prevailing high interest rates have impacted consumer demand across segments, from cars and durables to financial services and travel.

Ashish Bhasin, chairman India & CEO South East Asia at media marketing firm Aegis Group, says that while the fast moving consumer goods (FMCG) sector has increased ad spends by about 8% this year, spends by a host of industries such as real estate, consumer durables, automobiles, financial services, hospitality and travel are a bit muted this time. "My fear is this spend will taper down even further and much faster right after Diwali," he says.

The industry is used to 30-40% growth in the festive season. Last year marketers spend about Rs 7,000-8,000 crore on advertising during this season. Bhasin says that usually about 30-35% of total ad spend takes place during this time of the year. And traditionally, 70-80% advertising during this season comes from sectors like consumer durables, automobile, banking and finance, FMCG, travel and tourism and gifting.

Sam Balsara, chairman and MD at advertising agency Madison World, says consumer durables makers are more subdued than usual this year, while some FMCG brands and mobile phone makers are advertising heavily. Kartik Sharma, managing partner at Maxus media agency, says FMCG, retail, telecom, automobile and real estate are seeing an upswing this festive season. "Sectors like finance/banking, given the current economic mood, are down and cautious," he says.

Several e-commerce players too have increased ad spends significantly. "The upswing categories have increased in the range of 15-20%," Sharma said. Anita Nayyar, India & South Asia CEO at Havas Media, expects consumer durables, electronics and automobiles to stick to their spending plans, advertising special festival discounts, promotions and new products. She said the banking and finance sector, facing a liquidity crunch and cautious due to the decline of the rupee, and aviation sector will tighten ad spends.


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