Stuttering ad revenues

Business Today
© Living Media India Ltd.

First the bad news: for the F first time since 1998, advertising revenue in the Asia Pacific region (APAC) will fall by 1.1 per cent in 2009. It could, however, recover to a 5.3 per cent growth in 2010.Now the better news: Despite the gloomy picture in the rest of Asia, ad revenues will continue to grow in India albeit at a much slower 7.7 per cent, compared to the 17 per cent increase in 2008. Media Partners Asia, a Hong Kongbased Media Research firm, has come out with a study that says ad revenues will crash this calendar year. The gap between perception and reality deteriorating in key markets, says Vivek Couto, Executive Director, MPA. A sustained recovery is unlikely without a strong pick-up in the global economy, which is expected to occur next year. In 2008, ad revenues in the region gained 3.4 per cent, versus 6.7 per cent in 2007. The picture for India has always been brighter. But this year, even India will feel the heat as key categories reduce spends.

Earlier, a Pitch-Madison study on the advertising industry in India had shown a 17 per cent increase in revenues in 2008 over 2007. The previous year’s study had forecast the advertising spend in 2008 to be Rs 21,314 crore, a 20 per cent growth over 2007. But a slowdown in the second half of 2008 led to lowering of ad spend to Rs 20,717 crore. Small wonder then, that both studies caution media owners operating in India to prepare for a major slowdown in growth. Sam Balsara, Chairman & Managing Director, Madison World, says: While we are disappointed at the low growth rate projected for the current year, I am hoping that market sentiment will change over the next few months. However, he warns that things could get worse in 2009, with some media buyers indicating that the TV ad market in India will grow only between 5 and 6.7 per cent at best.

Continue Advertising to Ensure Brand Recall When the market begins to look up, those who continue advertising despite a fund crunch will benefit, says Jan Hofmeyr, international director of R&;D at Synovate India, in an interview to Anamika Butalia. Excerpts: How badly is the advertising world hit in these market conditions? Everyone is cutting costs and it seems that external costs like advertising are the first to face the axe. However, if brands continue to advertise, their recall and loyalty will only increase when the market begins to pick up.What’s the connection between advertising and brand loyalty?My quick tip to advertisers is that if you satisfy a set of emotional needs of your prospective customers like friendship, family and self-esteem, your ad campaign will be successful.Is the conversion model you developed in the 1980s relevant today?I realised that any choice made by an individual adheres to his or her psychological pattern. That’s how the conversion model came about. Now with so much advertising, a client’s attention-span is short. Therefore, instead of literal advertising, I would advise innovative ways to advertise.