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Economic crisis hits ad agencies

Jayajit Dash  |  Kolkata/ Bhubaneswar 

With companies adopting cost cutting measures like scaling down the advertising budget in the wake of economic downturn, some leading city-based advertising agencies have recorded 30-50 per cent fall in their revenues in the past two months while others have been somewhat insulated.

Hemraj Advertising Agency, which has a clientele base of around 100 in the state has witnessed about 50 per cent decline in its revenues in the past two months. Our revenues have dipped by nearly 50 per cent in the past two months due to the economic recession, said LN Agarwal, managing partner, Hemraj Advertising Agency. The advertising agency recorded a turnover of about Rs 3 crore in 2007-08.

“We have recorded around 30 per cent dip in our business in the past two months in the wake of economic recession. There has also been a delay up to two to three months from our corporate clients in payments for the advertisements”, said Shreedhar Dash, chief executive, Display Line. “Though we had set a turnover target of about Rs 5 crore for 2008-09, we are going to scale it down to Rs 4 crore. Last year, we clocked a turnover of Rs 3 crore”, he added.

However, the prevailing economic slowdown has failed to impact the operations of the other noted advertising agencies like Sanket Communications, Alaknanda Advertising Limited and Pressman Public Relations.

“Our advertising revenues have not been impacted due to the economic meltdown as our clients are going ahead with their previously approved advertising budget. As most of our clients are in the public sector, our operations have been somewhat insulated but we do foresee a possibility of declining advertising revenues if the economic situation does not look up in the next few months”, said a senior official of Sanket Communications.

Sanket Communications posted a turnover of Rs 14 crore in 2007-08 and the advertising firm has recorded an average business of over Rs 1 crore in the past two months. The advertising agency handles 45-50 clients in the city.

Ravi Kumar, branch head (Bhubaneswar), Alaknanda Advertising Limited said, “Our advertising operations have not been on the downside despite the prevailing recession as nearly 70 per cent of our clients are in the public sector and we bank on the tender advertisements from these public sector undertakings.” The advertising firm records an average revenue of over Rs 3 crore per annum from its Orissa operations.

Our agency’s advertising revenues have been normal despite the prevailing economic crisis and on an average, we record a revenue of Rs 2 crore per annum from our operations in the state, said Lingraj Barik, branch in charge (Bhubaneswar), Pressman Public Relations.

First Published: Mon, December 22 2008. 00:00 IST