The first sector to suffer a jolt in uncertain times is advertising. With India reeling under inflation and lower economic growth, advertisers, like consumers, are cutting back. This is reflecting in the growth of advertising, which industry estimates say will be about 6-7 per cent this year. But adman and McCann Worldgroup South Asia's president, Prasoon Joshi, who is also chairman and chief creative officer of the India unit, says the advertisers' attitude in this phase should be one of confidence rather than diffidence. He spoke to Viveat Susan Pinto on the slowdown and its impact on advertising. Edited excerpts.
How different are advertisers today, compared to a year ago? Very different. I see a short-term approach to advertising rather than a long-term one. It’s more about being here and now. So, yes, duration of campaigns is shorter, budgets tighter. The emphasis is on promotional schemes. While at one level it is understandable, in my view, when times are uncertain, the focus should be even more on brand-building rather than consumer promotions. Of course you need promotional schemes to lure consumers to the marketplace, especially when sentiment is weak and inflation is eating into household budgets. But when active brand-building is abandoned, even temporarily, it sends the wrong message to consumers. They begin to wonder what is keeping the brand silent. This may not augur well for the long-term health of the brand.
Should advertisers then set aside their fears when times are tough? I know it is a challenging exercise. All too often advertising remains among the frontline sectors that face the axe when a slowdown looms. Yes, there are advertisers who have brought down their budgets this year. There are some who haven't. It is heartening when you withstand the pressure to slash your ad budgets, because that gives you the leeway to indulge in long-term brand-building, which I believe can go a long way in improving sentiment. Why do I say this? Because when you continue with your advertising exercise irrespective of the climate or environment around, it conveys a feeling of confidence. That has a positive rub-off, not only on the brand but also on the people the advertising targets. They begin to feel confident.
Do you see the tide turning? Possibly when the environment gets stable.
And that, in my view, will happen after the new government comes to power. The current government is trying, yes. Last week's announcements were a step in that direction. A move towards coming out of policy paralysis. And the prime minister articulated that during his address to the Planning Commission on September 15. But coalition politics is a reality you cannot escape. Taking all these diverse interests along is never easy. The result is that one man is happy, the other is not. One party choosing to walk out, others threatening to do that. It is a challenge to manage all this.
How is India positioned vis-à-vis the rest of the world from an advertising point of view? India is still better off, compared with the rest of the world. I travel abroad frequently and what I see in the international market instills in me a sense of hope about India. Yes, we subject ourselves to much debate. This can lead to delays in implementing policy and can cause uncertainty, which makes advertisers as well as consumers nervous. But I remain optimistic that India will bounce back.
Internationally, the slowdown has pushed advertisers online. Digital is the big medium there, unlike here. It is true that digital is very big abroad. But digital is growing in India, too — albeit on a small base. It will get bigger. In my view, when the times are tough, the media that benefit the most are those where you can have a more targeted approach. This includes radio and digital. In line with that, digital is growing, whether here or abroad. As far as India is concerned, digital is also a cost-effective medium when compared to media such as TV. Having said that, TV advertising remains strong in India because it is one of the most effective ways of reaching a mass of consumers in one go. And there are many advertisers who still prefer that.