No Festive Frenzy

In a sense, this is what is happening in the Rs 4,000 crore advertising industry. Ad spends across corporate India are being pruned this festival season. Media planners, media owners, software producers and retail stores are admitting that the festive frenzy is missing. It may not be happening in real terms but factor in inflation and you have a downturn, says Amit Khanna, head of software house Plus Channel. With five of their programmes currently on air, Plus expected a 25 per cent spurt in spending. This just might not happen, adds Khanna.

This skepticism is shared by all. The last quarter of every year, the print medium sees a 10-15 per cent surge in advertising over the previous year. According to Meenakshi Madhvani, head of media buying house Carat International, this year it could be stagnant. Clients are not thinking twice about slashing budgets, she says.

 

In fact, for most clients, the last quarter of the year is the most active. They spend 35 per cent of their ad budgets during this period. But they all claim that 1997 is going to be different. By all accounts, they plan to spend only 20 per cent of their ad budget this season.

For soft drink manufacturer Cadbury Schweppes, it is an even bigger cut. It launched Crush, Canada Dry and Schweppes last year backed by a Rs 10 crore ad budget. From a spend of Rs one crore last Diwali, it plans to spend around Rs 30 lakh this quarter. Thats because the offtake of soft drinks is poor, says Ashok Jain, managing director of Cadbury Schweppes. It is also because the 150 million cases Rs 2,000 crore soft drink industry has plateaued.

At the six-year-old Shoppers Stop, the Rs 75 crore shopping mall in suburban Mumbai, group general manager, operations A Krishnamurthy claims that the crowds are conspicuous by their absence this year. The absolute frenzy during Diwali is not there, he says. Last year, average daily sales one month before Diwali was 45 per cent of the annual offtake. This year, however it is down to 30 per cent.

The trend is particularly evident in the consumer durable industry. A major multi-brand white goods retailer in Mumbai says that although he stocks nearly eight brands of refrigerators, washing machines and television sets, only two are moving marginally. This is the time when disposable incomes are splurged on such products, but it isnt happening, he says.

With products refusing to budge from shelves, durable advertising has been low key. In 1996, cellular phones and televisions figured prominently in the top 10 brand advertised. According to Lintas advertising estimates, the two categories toge-ther spent Rs 120 crore on mass media advertising. Media analysts claim that the figure could be down by half this year. They point out, that except for Videocon and Voltas, the category spend is virtually nil.

This cascading effect is taking a toll on publications as well. With consumers holding back on spends, advertisers are spacing out their releases. Even a leading national daily is aggressively promoting its classified columns. Like most brand promotions, the classified in the English language paper is relying on a range of freebies to generate revenue. The desperation to sell is evident in the kind of ads that are being released now. Even festival specials are supported by the next-door retail advertiser than real big names, says an advertising manager of a leading daily.

Vikas Joshi, vice president marketing of Sandesh, the second largest Gujarati daily claims there are no colour bookings. This is the first time ever that we are facing such a situation, he says. Joshi claims that high profile regulars like paint major Asian Paints, Dulux and certain public sector units (PSUs) are increasingly ignoring the second line publications.

Even promotions are failing to lure consumers. The 20 per cent discount is no longer the magical bait to ensure purchase. Some months ago, Reckit & Colman launched Mortein mosquito repellents. The company has just launched a promotion. The

Rs 40 pack now comes with a freebie -- a 75 gm cake of Dettol soap worth Rs 12.50.

But what has brought about this situation? There is recession in the economy. But in a fractured market, there are many more claimants to the pie which hasnt got bigger, says Plus Khanna. Adds Krishna-murthy of Shoppers Stop, People have become value conscious and they are looking for essentials.

As a result, money is moving away from mainline advertising, feels M Suku, vice president media planning at Colgate Palmolive. Money has moved from print space to television time and schemes, he says. Television channels like Doordarshan, Sony, Star and Zee are full during prime time claim media managers.

With money gradually shifting from print to television, publications have hiked ad rates. Leading political weeklies like India Today and Outlook have increased rates early this month. And as more publications revise rate cards, the ad rupee is becoming even more dearer.

It is taking a toll on publications. With consumers holding back on spends, advertisers are spacing out their releases