Can Indian adland battle the prolonged economic downturn?

Agencies could lose not just revenue but also talent if the slowdown extends, say industry observers.....!!!!!!!!!!!!!!!!

e4m by Abhishek Gupta
Published: Feb 26, 2020 11:33 AM  | 4 min read
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Just when everyone thought that the worst slowdown to hit the economy was behind us, global credit rating agency Moody's Investor Services lowered India’s GDP growth rate estimate for 2020 to 5.4 per cent as against the 6.7 per cent estimated earlier.

The agency further said that with a weak economy and depressed credit growth reinforcing each other, it is difficult to envision a quick turnaround of either, even if economic deceleration may have troughed. It is an oft-quoted truism that the first reaction of managers to a business slowdown is to cut expenses and advertising is the first to feel the axe. The question that begs to be answered remains: Does the ad agency business seem positioned to weather the prolonged downturn?

The pain points

The pressure to keep costs under control and maintain liquidity during a credit crunch make marketing and communication budgets look like a dispensable luxury that should be jettisoned without a debate.

According to Jigar Fernandes, Founder & Creative Head, tiqui-taka, it's a vicious cycle we're caught in at the moment and signs of recovery seem bleak. “News of our terrible economy is driving down consumer confidence who is now not spending at all. Companies are feeling the heat. Agencies are in turn amongst the first to be told the bad news. Not a pretty time to be in. And there are no signs of a recovery.”

In a first, the Pitch Madison Advertising Outlook Report 2019 downgraded its advertising expenditure forecast for the year from 16.4 per cent to 13.4 per cent. As per the report, the chaos in the television industry resulted in degrowth of 5 per cent in television adex for the first time in many quarters.

A senior agency hand said agencies could lose 3 per cent to 30 per cent of their revenue if brands continue shifting to more project work. “There’s likely to be a greater squeeze as we move forward,” he warned.

From minor cutbacks to major losses

As if plunging margins after advertisers chose to be frugal post the slowdown wasn’t enough, companies are increasingly opting for in-house expertise. A creative director from a leading agency on the condition of anonymity shares that a couple of campaigns have in fact been withdrawn by a major BFSE client which is otherwise a big spender on advertising.

“In-housing is a crisis that the agency business is dealing with today, more than ever. Additionally, agencies are compelled to do more in less and there has been a lot of stressing on workflow efficiency,” he remarks.

Meanwhile, Sumanto Chattopadhyay, Chairman and CCO, 82.5 Communications, says client budget cutbacks have been costing agencies in a big way as the client saves costs in the short run, but both the advertising and marketing industries lose in the long run. “Agencies are being squeezed due to client cutbacks and have no choice but to freeze hiring. This results in the loss of talent to sectors like OTT and Bollywood where they see better prospects. In fact from a marketing perspective some of the greatest brands have been built during recessions. When its competitor decides to cut back during a major recession, Kellogg’s decided to go all out and spend. You can see the iconic brand they managed to build with that decision, leaving its competitor far behind. People want instant solutions and in-housing does work for hygiene stuff but ultimately it is not equipped to deliver meaningful brand-building solutions.”

We shall overcome...

In 2016 and 2017 as well, demonetisation and the implementation of the GST regime led companies to clamp down on ad spend. The industry saw a revival in 2018 after two consecutive years of low growth, achieving 14.6 per cent growth and witnessing a total ad spend of around Rs 60,908 crore.

Anand Bhadkamkar, CEO, Dentsu Aegis Network (DAN) India, feels the situation should stabilise over time. “From an advertising perspective, when we released our DAN digital report earlier this year, we had predicted that Indian advertising would grow at 10.9 per cent. Nonetheless, the Coronavirus issue has been a headwind to businesses as international travel has slowed down and if this continues for a long time, supply chains for businesses may get affected. Overall, it is not a negative sentiment though growth at present is not as much as it could have been. However, growth is expected and things should be picking up as compared to the last year."

According to Heather Gupta, Group HR Director, MullenLowe Lintas Group: “It is true that the advertising business is going through tough times, but we at MullenLowe Lintas Group do not believe in taking hasty, knee-jerk decisions. We are still hiring. We believe in investing in talent with an eye to the future. To that end we are aggressively upskilling to ensure that we remain relevant.”

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E4M Our strategy is to target younger audiences through Sports: Rajiv Dubey, Dabur

The Head of Media at Dabur India spoke exclusively to exchange4media on the World Cup, associating with Indian Idol, the company’s digital spending and much more

e4m by e4m Staff
Published: Oct 27, 2023 6:15 PM  | 1 min read
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With quirky campaigns, memes and moment marketing, timed with the ongoing World Cup and particularly the India-Pakistan matches, Dabur India has got considerable consumer attention for its popular brands – Red Paste, Cool King Hair Oil, Chyawanprash, Dabur Vita and the recently launched Bae Fresh Gel toothpaste.

The 140-year-old company is going big on key sporting events, World Television Premiere (WTP) movies and reality shows. It is now gearing up to become the title sponsor of popular talent show ‘Indian Idol’ on Sony TV for the first time, shared Rajiv Dubey, who leads the media strategy at Dabur.

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Swapan Seth's new book 'COOL' is out

The book is a reflection of the author's 'eclectic taste across categories'

e4m by e4m Staff
Published: Oct 27, 2023 6:07 PM  | 1 min read
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Advertising professional and art collector Swapan Seth has announced the launch of his new book COOL. The book is described as "a ready reckoner to the hip and the happening, of the known and the very unknown."

The book is a reflection of the author's "eclectic taste across categories: from boltholes to exotic hideaways."

COOL has been published by Simon & Schuster India and is available on Amazon.

Seth is an ad veteran with a long and illustrious career in the industry. He became the youngest-ever Creative Director at Clarion at age 24. He was VP at 26 at Trikaya Grey. Two years later, he started his agency Equus.

He writes for publications such as The Economic Times, Hindustan Times and India Today. This is his second book and he has previously published THIS IS ALL I HAVE TO SAY.

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Disney Star signs 9 sponsors for Asia Cup PAK

Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up come on board

e4m by exchange4media Staff
Published: Aug 26, 2023 11:48 AM  | 1 min read
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e4m Staff Disney Star has signed nine broadcast and digital streaming sponsors for the upcoming Asia Cup.

Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up have come on board for the upcoming tournament.
As reported earlier by exchange4media, Disney Star has sought Rs 26 crore for the co-presenting sponsorship on TV and Rs 30 crore for Disney+ Hotstar.

According to industry sources, the associate sponsorship on Star Sports has been priced at Rs 19.66 crore, whereas for the ‘powered by’ sponsorship on Disney+ Hotstar, the broadcaster is seeking Rs 18 crore.

As per the information available with exchange4media, Disney+ Hotstar has three sponsorship tiers-- co-presenting (Rs 30 crore), powered by (Rs 18 crore) and associate sponsorship (Rs 12 crore). The broadcaster is offering an estimated reach of 120-140 million for co-presenting sponsors, 90-100 million for powered by and 60-70 million for associate sponsorship.

A spot buy for 10 seconds has been priced at Rs 25 lakh for the India vs Pakistan matches, while for the non-India matches, the ad rate for 10 second is Rs 2.3 lakh. The India matches plus the final for ODIs has been priced at Rs 17 lakh per 10 seconds.

Asia Cup is scheduled to be held from 30 August, 2023, to September 17, 2023.

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Sorted 360 wins creative & social media mandate of Reliance Mall

The agency will manage offline and online campaigns for Reliance Mall

e4m by exchange4media Staff
Published: Aug 26, 2023 10:54 AM  | 1 min read
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Sorted 360, an integrated creative and social media agency, has won the mandate to providing brand solutions for Reliance Malls across India.

“Sorted 360 is set to enhance Reliance Malls' market presence with their unparalleled creative prowess and strategic thinking,” read a press release.

“Sorted 360's commitment to pushing the boundaries of creative communication aligns perfectly with Reliance Malls' ethos. With a pan-India presence spanning across 19 cities and growing, Reliance Malls has consistently captivated customers by offering an array of Reliance brands and third-party fashion & lifestyle brands. The mall has established an unparalleled connection with its patrons through superior quality, a remarkable value proposition, and an unmatched shopping experience,” it read further.

"We are thrilled to welcome Sorted 360 as our trusted partner in advancing our brand presence across the nation," said the Head of Marketing at Relaice Malls. "Their proven expertise in retail, shopping center management, and innovative creative strategies make them the perfect fit for our vision."

"Partnering with Reliance Malls is a testament to our commitment to shaping extraordinary brand experiences," remarked Prerana Anatharam, Co-founder of Sorted 360. "We are excited to leverage our strategic and creative acumen to further elevate Reliance Malls as the epitome of convenience, choice, and excellence."

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e4m by exchange4media Staff
Published: Aug 25, 2023 4:39 PM  | 1 min read

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e4m by exchange4media Staff
Published: Aug 25, 2023 4:38 PM  | 1 min read

KlugKlug onboards Hemang Mehta as Country Manager for Indias

Mehta was most recently Head of Agency Relationships at Network 18 Media & Investments

e4m by exchange4media Staff
Published: Aug 24, 2023 3:35 PM  | 1 min read
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KlugKlug has appointed Hemang Mehta as its Country Manager for India.

Mehta will play a pivotal role in driving KlugKlug's growth and expansion within the Indian market and be responsible for Sales & GTM Strategy

Prior to that, he has also represented organisations like Exponential (now VDX.tv), India Today Digital and Rediff.com. His expertise spans various domains including digital media sales, mobile marketing, media planning, and buying, social media marketing, and more.

Hemang Mehta expressed his enthusiasm about joining KlugKlug, saying, "I am thrilled to be a part of KlugKlug, a forward-thinking platform that is reshaping the influencer marketing landscape. As much as I look forward to collaborating with the exuberant team at KlugKlug, I am super excited to interact with the brands to deliver powerful data-backed Influencer solutions that will guarantee business outcomes."

Commenting on the appointment, Kalyan Kumar, Co-Founder and CEO of KlugKlug, stated, "We are excited to welcome Hemang Mehta to our team as the Country Manager for India. His extensive experience in digital media sales and marketing will be instrumental in driving our efforts to provide influencer marketing solutions to our clients. We believe Hemang's leadership will be key in scaling our operations and expanding our reach within the Indian market."

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