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Purvita Chatterjee

Mumbai, Nov. 24 Broadcasters are bracing themselves for sluggish ad growth rates in the next few quarters. In the current slowdown, lowered ad spends are likely to lead to unsold inventories and broadcasters are looking at declines in the coming quarters.

“In the first two quarters of this year, our ad revenues have grown by 55 per cent and 60 per cent but for the next two quarters we have lowered our projections and expect growth between 25 per cent and 30 per cent. It may be still higher but this prediction is based on the current market situation today,” states Mr Barun Das, CEO, Zee News.

With advertisers backing out of certain sectors such as automobiles, real estate and financial services, filling up ad inventories has become an issue and broadcasters admit to it. Says Mr Shantonu Aditya, Executive Director, UTV Global Broadcasting Ltd, “Today, we have to be realistic and no channel can claim to have filled up inventories, including the sports channels.

“While our ad revenues have not shrunk, at the same time, we are looking at improving efficiencies and rationalising our workforce. We believe in being proactive in the current economic scenario.”

In fact, not being a general entertainment channel (GEC) is expected to have its advantages in times of slowdown as advertisers look at niche channels to get to the right audiences.

“Advertisers are getting choosy and need more bang for their buck today. They are looking at buying into channels which deliver a specific set of loyal audiences unlike a GEC channel which does not necessarily have so much of viewer loyalty,” says Mr Aditya.

However, the market leader in the GEC space does not feel likewise.

For Star India, its flagship GEC channel (Star Plus) has remained immune to the vagaries of the market place and has sustained itself primarily by advertisers in the FMCG, telecom and insurance sectors who have not yet trimmed their ad spends in times of a slowdown.

Explains Mr Kevin Vaz, Executive Vice-President, Advertising Sales, Star India, “The GEC genre has been the least hurt as the majority of advertisers have been from the FMCG, telecom and insurance categories. These are sectors whose growth has been 22 to 55 per cent over the last few quarters and have so far not faced any slowdown pressures.”

So while categories such as real estate, financial services and automobiles have been facing a downturn in their respective businesses, the GEC channel has sustained its regular set of advertisers primarily from the FMCG industry.

At the same, Star does not believe in resting on its laurels.

“The slowdown is imminent and we have to come up with bigger and better solutions for our advertisers,” adds Mr Vaz.

In fact, the slowdown impacted categories such as real estate and financial services have been resorting to print as a medium more than television and these sectors have typically never formed the core set of advertisers for television in general.

“Print is still considered to be the cheapest media in terms of cost per eyeball,” observes Mr Rohit Gupta, President, Network Sales, Multi Screen Media.

However, the real test for broadcasters will be the first quarter of 2009 when new campaigns are expected to get unleashed.

“In the past few weeks, we have seen the Diwali campaigns and once this period is over, the real challenge will be faced by broadcasters.

“The way ahead for us is to get more aggressive with clients who are trying to cut costs and assure them that television is still the most accountable medium.

“We will have to take a call if there is a dip in the business which would be felt only during the first quarter of 2009,” added Mr Gupta.

More Stories on : Advertising | Radio/TV | Economy

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