- Hathway’s cable TV and broadband capex to be Rs 270 cr in FY18
- Cut in interconnect charge may boost RIL's EPS by 8%
- Package soon to boost economy; no cuts in fuel rates: Arun Jaitley
- Global child bride racket busted in Hyderabad, 20 arrested
- Tracked so far: Rs 75 crore in Dera bank accounts
- Violence in Tripura: Journalist hacked to death, sec 144 imposed
Ad expenditure could take Rs 3000-cr hit, says Ashish Bhasin
MUMBAI: The impact of demonetisation, which started with Prime Minister Narendra Modi’s announcement on 8 November 2016, could lead to a Rs 2500–3000 crore ad revenue shortfall. The revenue drop was in double digits in December. However, the situation is starting to return to normalcy.
Speaking to Televisionpost.com, Dentsu Aegis Media Network chairman, CEO South Asia Ashish Bhasin said that, for the November–December 2016 period, the ad revenue shortfall stood at Rs 1500–2000 crore.
Bhasin estimates that until the end of March, the overall loss could be Rs 2500–3000 crore.
However, the good news is that the situation is starting to get back to normal and so the loss is reducing month on month, Bhasin said. He expects the loss in January to be around Rs 400 crore.
“Print was the worst impacted and is taking the longest to recover. Television was also badly impacted and is now better but is still not as good as earlier. Outdoor felt the immediate impact, but the medium was able to bounce back relatively quickly. Digital was the least impacted. In terms of advertiser, categories like real estate and jewellery were impacted the most,” he explained.
Bhasin added that categories like mobile wallets grew their spends to leverage the situation. FMCG, which is the largest ad category on TV, was impacted in the short run but is coming back to normal.
He feels that, by the end of March, things will be back to normal. “The worst period is over,” he noted.
Bhasin further noted that television genres like sports were less impacted because deals were done in advance. “You cannot suddenly pull out of a series in the middle.” That is not the case with print where orders can happen on a weekly basis.
Lodestar UM India CEO Nandini Dias said that in December the loss of ad revenue was 15%, while in January it is around 5%. November, she said, wasn’t that badly affected as by the time people realised the implications of the sudden decision more than half the month was over. Now at least with her set of clients, things are back to normal.
“Print was badly affected. If you look at mediums that are cost effective, it is TV followed by digital. So, if you have to pullback, you will look outside them before reaching them,” she said.
Dias added that ad volume is practically back to normal, which was not the case in December when the drop reached 25%.
In terms of categories, she noted that, because the decision happened towards the end of the year, auto couldn’t pull back completely. “That is the period when they do offers to sell inventory. Their investments are high. They probably did 70% of what they normally do. FMCG pulled back more,” she explained.
This means that the likes of Unilever advertised much less. FMCG is present across the year and that one or two months of absence wouldn’t make much of a difference, she said. Also affected was the travel and tourism sector. The last 10 days of the year is when people travel. However, seeing the situation this sector probably thought that there was no point advertising, she reasoned.
Madison World COO buying Neelkamal Sharma said, “While demonetisation is seen as a good step for Indian economy in the long run, it is seen more as a distraction in the short run, which is visible in media too. Its effect has been in the tune of 20–25% in the initial weeks of its declaration but later after mid-December, it started picking up, but yet not come back to its normal operating level. It is still 10–15% lower and may continue for the next couple of months.
“The industries which have pulled back their advertising spends to some extent are FMCG, real estate, banking and the financial sector,” he added.