Indian advertising industry looks forward to 2010

Indian advertising honchos remain bullish about 2010. The signs of an economic recovery, which many are seeing, has instilled a sense of hope in them with expectations that spend levels in the new year will be better than what they were in the current year.

“2009 was one of the tougher years,” says Arvind Sharma, chairman & chief executive officer, Leo Burnett India. “2010 should be better. In my view, growth of the industry should be closer to 15 per cent next year,” he adds.

How tough was 2009 for the Rs 32,000-crore domestic advertising industry can gauged from the fact that growth in this calendar year has been pegged at just about 2-3 per cent vis-à-vis last year’s, which was over 15 per cent. The year before, the industry grew at over 20 per cent. So the come-down in spend levels this year has been significant, according to industry honchos. “The year was tough, there’s no doubt about it,” says Colvyn Harris, chief executive officer, JWT India. “Most agencies were under a lot of pressure on account of the distress their clients were undergoing. This did take its toll.”

On the whole, most agencies adopted stringent measures to rein in costs, even as they looked for avenues of growth in 2009. As Madhukar Kamath, managing director & chief executive officer, Mudra Communications, explains: “It was an interesting year. On the one hand, the focus on growth had to be there. On the other, reducing costs was also uppermost on our minds. Many were walking a tightrope, trying to balance the two.”

In the face of poor mainstream advertising for much of the year from categories such as real estate, financial services, travel & tourism, etc, agencies were left with no choice but to prune costs somehow. “Many, for instance, deferred hiring people. Most did not give increments this year,” says Sharma of Leo Burnett.

For an industry whose attrition rate is as high as 20-25 per cent, 2009 was sober in that sense. The attrition rate, according to industry executives, was below 5 per cent, implying that most had to stay put and deliver on their briefs in their respective agencies.

“That was a good sign, if you ask me,” says Sharma. “Job-hopping doesn’t allow you to be consistent. It is a loss, both for the individual and the agency. This year, people were left with no option but to stay where they were. At least that brought some consistency to their work. Agencies clearly benefited from all this. There were some good advertising works to show.”

Rightly so. The year did throw up some creative surprises. Like Ogilvy & Mather’s Zoozoos for Vodafone, Lowe Lintas’ ‘Jaago Re’ campaign and ‘Walk When You Talk’ for Tata Tea and Idea Cellular respectively, and JWT’s work for Birla Sun Life Insurance — consumers clearly had a lot to choose from this year. Agency honchos expect the creatives juices to flow into the new year as well, with categories such as telecom and FMCG — big spenders in 2009 — leading the charge in 2010 too.