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| Financial advertising melts down |
| Seema Sindhu / New Delhi Nov 19, 2008, 00:59 IST |
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The ongoing downturn has forced firms to cut back on advertising expenses. The banking, financial services and insurance segment (BFSI) has cut advertising budgets by nearly 40 per cent.
An analysis of AdEx data, a comparison of the volume growth over the June-October period in 2007 with the corresponding period in 2008 , shows that bank advertising on TV decreased by 3 per cent, advertising for loans went down by 39 per cent and mutual fund advertising was down 84 per cent.
The account for June-October 2008
Bank advertising spend decreased by 3%
Loans advertising spend decreased by 39%
Mutual funds advertising dpend decreased by 84%
Insurance spend has increased by 74%
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However, insurance grew by 74 per cent. So the decrease in advertising spend from the financial sector is countered to an extent by the insurance advertising increase to some extent.
BFSI sector contributes 5 per cent to the total advertising on TV. This financial year the estimated contribution is 350 crore.
Insurance has seen a drop in sales from 70-80 per cent to 30-40 per cent in the last quarter, but it hasn’t deterred companies’ spend on advertising. Debashis Sarkar, senior director and CMO, Max New York Life, says: “Insurance is a need rather than investment. Who can do without financial planning? In a downturn, while advertising is the first thing to bear the brunt, I believe otherwise. Brand building is a strategic investment.” Max’s advertising budget for this year is around Rs 60 crore.
Insurance sector advertising is growing for a host of reasons. Three new players entered have the sector this year: AEGON Religare, Sahara India Life Insurance and Canara HSBC Oriental Bank of Commerce Life Insurance.
Chandradeep Mitra, president and head, Mudra MAX (media buying arm), Mudra, says: “Earlier insurance companies used to advertise in the tax saving period of January to March. Now the ads run throughout the year. Companies have also added a slew of new products.”
Sarkar adds: “Tax-saving period does not need advertising, it just requires a more aggressive sales force. Advertising is done to attract people ltowards real saving from a long term perspective.”
Max alone contributed half of the total insurance advertising on TV, which is a very unusual spend from an insurance company. Max was the exclusive telecast sponsor of the IPL.
Sujit Ganguly, senior vice-president and head-marketing, ICICI Prudential, says: “For us the trend is not new. We have always been communicating that insurance is not a tax saving tool, it’s a long-term saving goal. On the back of strong advertising, we have reached a market share of 13.5 per cent from the last year’s 12.7 per cent. Our advertising budget is intact this year.”
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