Global crisis melts down firms’ ad budgets too

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Mumbai, Oct 14: Global financial crisis and economic slowdown seem to have a major impact on many Indian corproates’ media and advertising budgets. While leading airlines, retailers and financial brokerage firms are cutting down their ad budgets, there are others who are reviewing the grim situation before taking any action. Even as FMCG major Parle Products Ltd is planning to cut its ad budget by 20%, major brokerage firms are slashing their media and ad budgets to tide over the economic downturn.

On Parle’s revised ad budget, Praveen Kulkarni, general manager, Parle Products said: “With the global meltdown, people have become very price -conscious. We plan to cut down our ad spend by 15 to 20% to counter the slowdown.” Meanwhile, other FMCG players are cautiously looking at short-term media and advertising plans to promote their brands in competitive markets.

According to industry sources, aviation major Jet and Kotak are planning to cut their advertising and media budgets to combat the economic downturn. Ranjan Kapoor, country head of WPP India observed that the Indian ad industry is not immune to the global meltdown. “There will be some impact on the Indian ad business. As compared to western countries, the impact is a marginal,” he said.

According to Chandra Deep Mitra president, Mudra Max, many companies are now conducting comprehensive analysis to review the current market conditions. “No one is making long-term plans. In certain categories like financial services and retail, companies are reducing their ad spend. FMCG and telecom sector have opted for wait-and-watch mode,” he added.

Sharing similar sentiments, Sandeep Lakhina, MD, Starcom MediaVest, India said that companies would be very prudent while planning their ad budgets in the next few months. “With the liquidity crunch, companies are now reviewing their ad budgets. Their main concern is to maximise the value of their media investments during the slow down,” he explained.

According to Punitha Arumugam, CEO, Madison Media Group, the agency’s clients have not taken any immediate action to counter the economic slowdown. “Our clients are now cautiously watching the situation in financial markets,” she said.