The Hindu Business Line : Advertising by AC cos may heat up this year

A report by TAM Media Research, which tracks advertising trends, says industry ad spends dropped in '02 and '03 after peaking in '01. But top companies say they plan to spend more to lure consumers this year. Also, spends are likely to be higher this year as more market players seem to be advertising, and heavily at that, on TV, says Mr Amit Doshi, Vice-President (Marketing & Service Operations), Hitachi Home & Life Solutions India.

The industry, according to TAM, upped ad spends by around 30 per cent to Rs 39.6 crore in 2001. But in the next two years it could clock only around Rs 33 crore per year. Television, which contributed Rs 16.4 crore in 2001, saw its share fall to around Rs 13.6 crore in 2004. Print too saw a fall from Rs 23.2 crore to Rs 19.5 crore during the same period.

The industry has a ready explanation for this fall. According to Mr Doshi of Hitachi, it is not the industry has cut down on advertising but has made "judicious decisions" about it.

He says that in the last two years, AC manufacturers have realised that advertising on niche channels would pay off as most decision makers watched those channels and not those which merely "accumulated eyeballs." So out went the `mass' channels and in came niche ones, such as Discovery, HBO, Star Gold and National Geographic. Also, the rates on these channels were more viable, all the more so after negotiations, and for the AC companies, it was a win-win situation — advertise heavily despite paying less, narrow targets and get the message across.

The TAM report indicates that more than "60 per cent of the air-conditioner spends are seen across news/bulletins, cricket and feature films."

In Hitachi's case, the company also resorted to smaller but sharper (in terms of impact) advertisements that would stick in the viewer's memory, he says.

LG's Country Head (Air-conditioner Division), Mr Salil Kapoor, reckons that "overall, there has not been a decline in advertising for the ACs, for the simple reason that many new players have entered the market since 2001, including Onida, Whirlpool, Electrolux, Videocon, Voltas (in a bigger way). These companies have invested considerably to create awareness for their products."

The company, which heads spends on television, with Hitachi and Samsung being number two and three, increased its advertising budget from Rs 6-7 crore in 2001 to Rs 15 crore in 2004 (expected).

Mr Kapoor says LG doesn't advertise "much on mass channels, as AC market has a very specific consumer — generally the SEC A, 30+ years male. The skew is more towards news channels. For very high end ACs, we advertise on channels such as CNN and CNBC."

A Samsung official says the company has "invested significantly this year on television because of the Samsung Cup. In addition, this is a growing category. We are looking at an increase of 35-40 per cent this year."

(With reports from Sravanthi Challapalli & Neha Kaushik)

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