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Purvita Chatterjee

Mumbai, Oct. 14 Slowdown in credit disbursals could lead to a 25 per cent dip in ad spends this festive season, especially of big ticket categories such as automobiles, real estate and consumer durables. “Loans are not going to be easy to get, there is a possibility of advertisers of big-ticket items such as real estate, durables and automobiles slashing ad spends between 20 and 25 per cent this season,” says Mr Chandradeep Mitra, President and Executive Director, Mudra Max.

However, traditional spenders of categories during the festive season like FMCG, fashion and jewellery, would continue to advertise their brands irrespective of any kind of slowdown expected in consumer spending. “Large spends would not stop in categories such as jewellery and clothing and this would represent traditional consumer behaviour every festival season,” added Mr Mitra.

However, at present ad spends have come down by more than 30 per cent for categories such as mutual funds and IPOs. “Financial services advertising has slowed down a lot and could be pegged between 30 and 40 per cent this quarter compared with the previous quarter,” said Mr Mitra.

However, the PSU banks have compensated for the drop in ad spends by releasing mega corporate and product-based campaigns unlike the private and multinational banks. Observes Mr Gopinath Menon, Vice-President (Media), TBWA India, “In the last six months, private banks such as ICICI Bank have cut down on their ad spends and so have multinational banks such as HSBC and ABN Amro. While low-ticket items in the FMCG category have not been impacted by the slowdown, big-ticket items such as consumer durables and household appliances have been going the BTL (below the line) way and have been resorting to some amount of promotional advertising this festive season.”

At the same time, the credit squeeze is likely to be faced more on the manufacturer’s side than having an impact on the consumer. As Ms Sudha Natrajan, Chief Operating Officer, Lintas Media Group, says, “The impact on ad spends will be felt once this season gets over. Most advertisers would spend on promotional offers this season but in the long term, it may become a bit of an issue. But the credit squeeze is likely to affect manufacturers more than consumers.”

Meanwhile, consumer durables companies seem ready to cash in on the festival season. Mr Vivek Sharma, Chief Marketing officer, Philips India, said, “So far, we have not had any cut backs during the festival season. Our long-term view is to build the Philips brand and currently our festival campaign is on for the season.”

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