The turmoil in global financial markets and a slowdown in demand will soon have a major impact on the Rs 18,000 crore Indian advertising industry, predict ad gurus. In fact, the global meltdown has already affected the financial services advertising sector in India as many brokerage firms and financial institutions have slashed their ad spend to handle the downturn.
On the impact of global economic slowdown in India, Colvyn J Harris, chief executive officer of JWT India said, ?Yes, it will have an impact on the Indian ad industry -especially in the financial services advertising sector. I think automotives, real estates and other sectors which rely on funding will be affected. Interest rates will go up and this will affect consumption levels too. In essence, consumer sentiment is no longer as bullish as it was.?
Echoing similar sentiments Pratap Bose, chief operating officer (COO) of the Mudra Group said the global meltdown would have a negative impact on the Indian financial services sector to start with. ?In the short term, I see advertising for financial services on the slow burner. I would expect things to stabilise mid next year,? he added.
According to Arvind Sharma, chairman and managing director, Leo Burnett India many financial brokerage firms that had started an advertising blitz are now cutting down their ad spends. ?I am already seeing the impact of the global meltdown in the ad industry. With rising input costs other sectors such as FMCG and consumers durables will be affected. After financial services ads, travel & tourism advertising will be affected,? he said.
Sam Balsara, chairman of Madison World observed that the Indian financial sector would be definitely affected by the global meltdown. ?Now, financial institutions will be far more cautions in their approach and would come up with less adventurous schemes relying on aggressive promotions. On the other hand, this would be partly off set with corporate image building campaigns,? he added.
In sharp contrast to above views, Bharat Patel, chairman of Procter & Gamble India said Indian consumers would not be directly affected by the recent global meltdown. ?I do not think India in terms of its consumption, sales and advertising will be affected by this slow down,? he said.
Sharing similar views, Ashish Bhasin, chairman India & CEO South East Asia, Aegis Media Asia Pacific said, ?So far it has not impacted the Indian ad industry. But if the slowdown does continue it will have a negative impact in the medium term. However, the Indian ad industry will be better placed than most countries during the downturn.?
