Industry chamber Assocham said that the private sector will spend up to 35 per cent less on advertising and entertainment remuneration this fiscal due to the global financial meltdown putting severe pressure on demand and production.
"India Inc's advertisement expenses for brand promotion and entertainment remunerations for its executives to cement liaison with their clients will witness a decline of nearly 32-35 per cent in the current fiscal," Assocham President D S Rawat said, adding that the situation would be similar in the public sector.
According to the Assocham survey, corporates in automobile and FMCG sectors, during boom time, would spend 10-12 per cent of their total earnings on advertisements through electronics, print and periodicals.
Despite the electronic and print media having curtailed advertisement cost by nearly 25-30 per cent, corporate earnings have declined so much in 2008-09 that majority of them are still dithering to fix allocations for advertisement, it said.However, promotion activities and enhancement in entertainment and other allowances would pick up after the turmoil in the economy gets over, which will consume nearly 10-12 months, it added.
It sounds sensible considering the present condition as advertisement as a medium to attract consumers cannot magnetize its role as it used to.The key reason being the "money".When people dont have jobs, from where will they earn and how will they spend.Advertisement does play a role but considering the cut in its cost is a logical move by the association.
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