Dip in corporate sales: What it means for media/advertising?
With slowing of revenues, marketers are re-looking their media allocations and striving for more bang for the buck
India Inc.’s revenue growth in April-June 2012 (Q1FY 13) is likely to be the weakest in the last six quarters as demand moderates in the current quarter. Revenue growth in the first quarter of current financial year 2012-13 is forecast to drop to around 14 per cent from 17.5 per cent in Q1 FY12, given the slowdown in economic activity and gross fixed investments, said Crisil Research.
Marketers have been cautious from the beginning of this year in terms of budget allocations and have reduced their planning cycle because of the uncertainty in the market. And now with slowing of revenues, they are re-looking their media allocations and striving for more ‘bang for the buck’ and reducing budgets in relatively expensive mediums.
“I think the environment in general has been a wait and watch. There has been an air of caution and the decline is not entirely unexpected as well. The marketers have been vary and are optimising spends, which have been on a tight rope already. At the same time they are investing and spending on categories that are essential,” said Mahesh Chauhan, Co-Founder, Salt Brand Solutions.
Auto sector sales growth is expected to dip to five to seven per cent for Q1 as compared to 12.5 per cent growth last financial year, said Crisil Research. This sector had tried to beat the slowdown in the second half of last year by launching more models and advertising more. With the recent issue of fuel pricing and increase in petrol prices the diesel percentage of vehicles that are sold in the passenger car segments had steadily increased to about more than 40 per cent. In fact according to Crisil, in the first quarter (April-June FY13), the numbers had even crossed 50 per cent. But suddenly because of the uncertainty on what will happen to diesel prices going forward, we are seeing that the waiting period for diesel cars coming down, in the last one and one and half months. And unless there is clarity on how the government is going to go about on the fuel pricing issue, we may see the numbers slowing.
Marketers in turn are recalibrating their response to various models within their portfolio. “As of now there are no plans to truncate our marketing and advertising budgets, what we are doing is continuously assessing the market and recalibrating our response to various models. Maybe the plans that we made at the beginning of the year need some modification; where to spend money optimally, what kind of efficiencies can be built up…we are thinking on those lines. The overall intervention in terms of spends; we haven’t talked of a cut back as of now. What we are discussing is how to utilise the money and what intervention can work in such a situation. The situation is very fluid while we have long-term and mid-term plans; we are critically analysing short-term plans because there is a lot of dynamism in the market. We are also tightening up our planning cycles,” said Nalin Kapoor, Group Head Marketing, Hyundai Motor India.
During last slowdown, sectors such as real estate and financial services had cut advertising budgets. And since these sectors have remained muted in the past few years, a further de-growth in revenues is not expected to hit ad spends any further.
Rajeeb Dash, Marketing Head, Tata Housing said, “These are challenging times for a lot of sector and the ripple effect is evident across the board. The dip in sales of real estate / consumer products / services is also a reflection of the conservative state of mind of consumers / businesses. But the question ahead of marketers is not about to advertise or not to advertise but is about which medium will give them the maximum bang for the buck. As a result of that, you would see marketers investing more in digital media and reduce budgets in the relatively expensive and speculative print medium.”
“One would see a lot of new product launches being delayed for the festive season when the market could be expected to react more positively. In this lean period, a lot of brands could be expected to take up more focused and cost effective brand building initiatives,” he further added.
Telecom, the star advertising sector of the last decade has seen companies squeezed of cash by multiple factors such as 3G licence costs and drying up of credit lines from lenders on back of scams that has led to a cut in ad spends. But its spending might be back soon, owing to fresh auctions for licences. FMCG is one sector which is expected to drive growth and remain a big volume spender. Even during the last slowdown, this sector didn’t cut advertising budgets but looked at more efficiency from media buys.
Further, government’s decision to allow states to go ahead with FDI in multi-brand retail might improve market sentiments. This could also bring in more investments in other sectors leading to job creation and improving economic growth.
“Slowdown in sales growth is part of business cycle. It is not the outcome of any economic slowdown as of now. It would, therefore, not depress the marketing sentiment. Rather brands will launch better offers to lure the customers and that would need communication,” said Atul Shrivastava, Chief Operating Officer, Laqshya Media.
(With inputs from Priyanka Mehra and Priyanka Nair)
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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
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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ShareSwapan Seth's new book 'COOL' is out
The book is a reflection of the author's 'eclectic taste across categories'
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 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
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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KlugKlug onboards Hemang Mehta as Country Manager for Indias
Mehta was most recently Head of Agency Relationships at Network 18 Media & Investments
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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