Economic headwinds have been waning to some extent and inflation has been softening over the past few months. But many advertisers in India are being tight-fisted with their budgets despite the Indian Premier League and the upcoming T20 World Cup, advertising industry experts told e4m.
“Brands are adopting a cautious approach, preferring to wait for the electoral dust to settle before splurging on advertising campaigns,” says Vishal Chinchankar, CEO of Madison Digital and Madison Alpha.
He added that the brands’ conservative stance is likely to continue till the main budget is tabled by the elected government. Some brands have plans to spend on the results day, although it would largely be on TV & digital with FCT/Non-FCT packages.
Results for the general elections are due on June 4. The government formation may take a couple of weeks. The main budget is expected in August and industry is hoping for new policy measures to be announced.
Even though the budget would be for the rest of the 9 months of the current fiscal, there's optimism in the industry that it could pave the way for increased consumer spending and market activity.
Shradha Agarwal, Founder and CEO of Grapes, says, “Marketers are divided. One group is holding the money back, while the other is spending as per need.”
However, some marketers insist that they are spending as usual. “Consumer products demand isn’t dependent on elections,” says Rajiv Dubey, Media Head, Dabur India.
Shashi Sinha, CEO of IPG Mediabrands, India, echoes the sentiments.
Dull H1
India’s advertising market is roughly Rs one lakh crore big. However, the first four months of calendar year 2024 have been quite dull compared to last year, industry insiders say. Characterized by widespread challenges including weak consumption in rural India, the A&M industry’s growth has been sluggish.
"Many of our clients are adopting a wait-and-watch approach," remarked a senior executive at a leading advertising agency. "They're reluctant to allocate significant funds in the first quarter of the new fiscal year, preferring to reserve resources for what they anticipate to be a post-election bonanza."
A section of advertisers is banking on a victory for the BJP, led by Prime Minister Modi, envisioning a scenario of market stability, developmental initiatives, and pro-industry policies that could stimulate consumer demand. Lead sectors for advertising FMCG (Fast-Moving Consumer Goods) and Automobile are expected to reap the benefits of such policies.
However, some marketers hope that the alliance of opposition parties (INDIA) could put up a good fight and may even win the elections, even if it is a thin majority. They would also open their purse strings once things are clearer.
"Regardless of the election results, advertisers are optimistic about the potential for economic growth in the country," noted a marketing expert, adding that “Whether it's the return of the BJP or a resurgence of the INDIA alliance, pro-people policies could translate into increased disposable income, fueling growth in advertising expenditure.”
