Column : Spot the deal in downturn

Written by Alokananda Chakraborty | Updated: May 2 2009, 04:55am hrs
We have been looking for that silver lining in the dark cloud for some weeks now. So, is this bad news or not-so-bad news Data on the Indian media advertising market released earlier this week by GroupM, the media investment arm of the WPP conglomerate, shows growth, but also slowing growth.

The industry has posted double-digit growth in 2008. Thats good news. But 2008 also saw the industrys worst performance in the last five years. Against 20%-plus growth in 2007, the Indian advertising industry has logged about 14% in 2008, to stand at Rs 22,683 crore. The agency says the negative sentiment will continue for quite some timeit forecasts the industry would grow at 4.7% in 2009 to reach Rs 23,755 crore.

Among the recession impacted categoriescategories that have cut spends drastically anticipating hard times the survey lists real estate, infotech, financial services, retail, apparel, corporate and automobiles. FMCG, telecom, education and entertainment have been dubbed recession unaffected categoriesthose that have kept the faith.

Nothing surprising till you spot the pattern. Its FMCG and telcom, and to some extent, education and entertainment that have posted robust growth last year, despite the overall gloomFMCG at around 12-14%, media and entertainment at 12.4% and in telecom, operators are said to be adding some 10 million subscribers on an average per month. Get the drift Segments that have continued to invest in marketing among other things have held on while those that have cut back are in the dumps. Lets face it. As consumers batten down the hatches, one of the first line items to be cut is the ad/marketing budget. It sits on the Excel worksheet as a pure expense with no profit directly attributed to it. For many bottomline-oriented CEOs, that decides it. Yet that is a potentially dangerous reaction. Advertising in such times becomes less expensive because fewer of your adversaries are purchasing spots. In short, deals are waiting if you are willing to negotiate. So there is opportunity even in a downturn.

alokananda.chakraborty@expressindia.com