In India, Bollywood to Slash Ad Budgets; BBH Takes Blame
The recession in the Indian advertising business will be led by Bollywood studios who are poised to cut their marketing budgets by 10-15 percent. Bartle Bogle Hegarty and McCann both opened shops in India in the last few days, so you’d be forgiven for thinking that things are going great over there. Not so:
Television marketing for films makes up for approximately 60% of the [Bollywood studio] budget … However, according to Rajesh Jain, Head Information, Communication and Entertainment KPMG India Pvt Ltd and Sandip Tarkas, President, Customer Strategy Future Group this is likely to fall by 10% over the next 5 years. Similarly advertising in newspapers, magazines (print media) is also likely to fall from 15% to 10%.
Renewal of existing contracts is getting postponed in several cases, leaving PR firm owners on the tenterhooks. Senior PR professionals said companies now want to work on a project-based model, instead of the popular retainership model.
But in a kind of curry-flavored deja vu, the web ad economy is likely to keep growing because it’s so darn cheap:
Online advertising, radio and Out of Home (OOH) will increase from the current 3% to as much as 15%. Other avenues likely to open up soon will be advertising directly on mobile phones, via broadband etc.
The web is still in a relatively nascent state in India:
Despite its advantages, Internet advertising constitutes a very small chunk of the overall ad pie in India, due to low penetration levels.
What caused the Indian recession? John Hegarty (pictured) says he did:
“We started BBH in 1982, and there was a dreadful recession that time as well … When we started in New York, in 1999, within a year, the dotcom boom had crashed.”
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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