75% advertising drop in Q1, trend needs to be reversed to push economic growth
GN Bureau | August 7, 2020
Advertising veteran Sam Balsara has lamented the lack of support from the government to the industry and said that it has completely ignored the sector.
Balsara, the founder, chairman and managing director of Madison World and Madison Communications, said that the government needs to provide a stimulus package to the advertising industry and push consumer demand. “Perhaps they think if they gave a concession to advertising, then it would be considered like concession to the sector itself. It is not a concession, it is a stimulus package to revive demand and that is how it should be seen by the government and positioned and not as a sop to the media industry,” he said.
Balsara was speaking with Kailashnath Adhikari, MD, Governance Now, on Thursday in the latest installment of the Visionary Talk series, on ‘Impact of Covid-19 on media and entertainment industry and the role of governance in the media sector’.
For more from the Visionary Talks Series, click here: http://www.governancenow.com/visionary-talks-series
He said that the advertising industry has faced an overall steep drop of almost 75% in the first quarter of the FY 2020-21 adding that in April it was about 95%, improved slightly in May and recovered well in June, especially in the TV and digital media. “Print, radio, outdoor and cinema are totally in the dumps and will only see some semblance by the Diwali, provided the government allows suburban railways in metros and majority offices to open. The industry was expecting TV to recover 80-90% of last year’s levels in Q2 of the FY,” he said.
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Responding to a question if the government has responded well to the stakeholders’ recommendation of allowing amortization of advertising expenditure to companies to help the economy come back on track and create demand, Balsara lamented lack of support from the government and wondered why it has completely ignored the sector. “Perhaps they think if they gave a concession to advertising, then it would be considered like concession to the sector itself. It is not a concession, it is a stimulus package to revive demand and that is how it should be seen by the government and positioned and not as a sop to the media industry,” he said.
He said that work-from-home (WFH) is a huge setback to the economy as it could work well for individuals and companies but not create consumer demand. “When advertising is widely recognized as the engine for a large number of consumer companies and drives demand, in its absence the economy goes in a downward cycle. To spin out of this de-growth and perk up, a massive dose of advertising is required in July, August, September,” said the veteran adman.
Balsara also came down heavily on Indian news channels and said that he was disappointed at what they repetitively put out and they have to break out of the current rhythm of content. He was referring to the daily headlines of the new high numbers of Covid-19 cases and deaths being reported by news channels which he said looked identical every day now as they did four months ago.
“There are many opportunities for news channels to innovate, be more humane and capitalise news intake intelligently. But repetitive news content is bringing the viewership down. When in the first week of lockdown the viewership of news channels had shot up 300%, today it has come down to February levels,” said Balsara.
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