Indian Advertising 2008 Growth Rate Slumps Budget Shrinks

According to a story in Livemint due to ongoing credit crisis and recession the advertising budgets have been cut drastically and growth rate of advertising in India is expected to slump from 24.5% last year to 4.5% this year however next two years are supposed to be better with expected growth rates of 13.5% and 12.9% according to estimates by Zenith.According to a recent poll by marketing consultancy firm R3 of at least 50 marketers who manage around 100 of Asia’s top 500 brands, 25% are planning on reducing their expenditures.R3 however also says that at least 40% of Indian marketers said they were going to spend more than originally planned on digital media, direct media and promotions.According to story

This Diwali season has definitely been lacklustre compared to last year. October 2008 overall ad spends has been approximately 14% below October 2007 spends,” said Chandradeep Mitra, president of Mudra Max.A large number of categories which typically spend heavily during this season have cut their budgets this year, said Mitra.These categories include cars, two-wheelers, televisions, cellular phone services, ready-made garments, paints, life insurance firms, airlines and retail firms

Predictions for 2009:

Real estate advertising will dry up completely in 2009. Financial advertisers will slash their spending by 30-40%; aviation firms will reduce their spending by at least 40%; and automobile companies by 15%.Only consumer product and telecom companies would maintain their budgets at 2008 levels. However with next year being election year ad spends from poltical parties will be a big  boost