note demonetisation

A dull December: How demonetisation is hitting the advertising industry

With product sales dropping across industries, companies are pulling out of marketing campaigns planned for the next month.

With Christmas and New Year to cash in on, December is usually a busy – and profitable – month for the advertising sector. But this December is likely to be a dull one. If the cash crunch caused by demonetisation has led to a slump in business across sectors, advertising is the one industry that ends up feeling its collective pinch.

In the three weeks since currency notes of Rs 500 and Rs 1,000 were demonetised, advertising agencies and other media companies have seen a marked decrease in the advertising expenditure of companies, particularly those producing fast-moving consumer goods. By the end of December, some media agencies are expecting to see advertising cancellations worth Rs 600-Rs 700 crore, while others estimate a 25%-30% drop in advertising spend in the short term.

While this would mean a definite gloom in the third quarter of the financial year (October to December), advertising experts are unsure if these effects of demonetisation will spill over into the next quarter.

Pulling out of product launches

Since advertising both influences and reflects consumer sentiment, the industry serves as a sensitive barometer of the mood of a country and its consumers. “The moment a chill sets in, it [the ad industry] is one of the first sectors to catch a cold,” said Anvar Alikhan, senior vice president and strategy consultant at JWT, a prominent advertising agency.

With the government suddenly invalidating 86% of the India’s circulating currency, and the Reserve Bank of India still struggling to push new, valid currency notes back into circulation, demonetisation has had a direct impact on consumers’ ability to buy commodities. This, in turn, has brought down sales of almost all goods that are discretionary, or not essential to people’s lives. These include real estate, durable goods like vehicles and gadgets and a host of retail and fast-moving consumer goods. For instance, Britannia Industries – known for its biscuits and processed food products – is expecting its sales to be hit by 15% to 20% in the next six weeks.

The drop in sales in the past three weeks has led to a clear drop in the advertising expenses companies are willing to make. “If consumer demand is going to be significantly lower, then advertising spends will also be correspondingly hit,” said Anant Rangaswami, editor of CNBC TV18’s Storyboard, a show on advertising, brands and entrepreneurship.

Since FMCG companies are among the biggest advertisers in India, particularly in the sector of television commercials, they are now cancelling or postponing ad campaigns and product launches that were planned for December.

“Companies are categorically postponing product launches, which will affect the revenues of general entertainment channels,” said Rangaswami. “December and Quarter 1, 2017, are likely to be dry months.”

At several advertising agencies, senior client servicing executives confirm this unexpected slowdown. “One of our clients, an FMCG brand, had a whole ad campaign ready for the launch of a new product, but they have paused it for now because this is not the right market environment for a product launch,” said the client servicing head of a leading advertising agency in Mumbai.

At another prominent agency, a senior executive claimed that campaign launches have been deferred for “cash offtakes”, or products that are usually always paid for by cash. “One quarter is definitely going to be washed out,” said the executive, who did not wish to be named. “A lot of marketers are sitting on the fence, waiting and watching to see how things play out.”

A long wait?

Most companies and advertisers have no option but to wait and watch, because of the widespread uncertainty about the medium and long-term impact of demonetisation.

“From November 8 till today, the government has made so many changes on demonetisation, it is difficult to predict what the next quarter will look like,” said Rangaswami.

So far, says Alikhan, advertising spends had been reflecting the country’s GDP growth in recent months, which was clocking 7%. “But now suddenly the mood has turned frosty, and the big question is how much of a hit the economy will take in the coming six to 12 months,” he said.

Since there is almost no precedent to the kind of demonetisation that the Indian government is now attempting, what happens in the next few financial quarters will depend on how the government is able to manage the current liquidity crisis, says Alikhan.

We welcome your comments at letters@scroll.in.
Sponsored Content  BULLETIN BY 

In a first, some of the finest Indian theatre can now be seen on your screen

A new cinematic production brings to life thought-provoking plays as digital video.

Though we are a country besotted with cinema, theatre remains an original source of provocative stories, great actors, and the many deeply rooted traditions of the dramatic arts across India. CinePlay is a new, ambitious experiment to bring the two forms together.

These plays, ‘filmed’ as digital video, span classic drama genre as well as more experimental dark comedy and are available on Hotstar premium, as part of Hotstar’s Originals bouquet. “We love breaking norms. And CinePlay is an example of us serving our consumer’s multi-dimensional personality and trusting them to enjoy better stories, those that not only entertain but also tease the mind”, says Ajit Mohan, CEO, Hotstar.

The first collection of CinePlays feature stories from leading playwrights, like Vijay Tendulkar, Mahesh Dattani, Badal Sircar amongst others and directed by film directors like Santosh Sivan and Nagesh Kukunoor. They also star some of the most prolific names of the film and theatre world like Nandita Das, Shreyas Talpade, Saurabh Shukla, Mohan Agashe and Lillete Dubey.

The idea was conceptualised by Subodh Maskara and Nandita Das, the actor and director who had early experience with street theatre. “The conversation began with Subodh and me thinking how can we make theatre accessible to a lot more people” says Nandita Das. The philosophy is that ‘filmed’ theatre is a new form, not a replacement, and has the potential to reach millions instead of thousands of people. Hotstar takes the reach of these plays to theatre lovers across the country and also to newer audiences who may never have had access to quality theatre.

“CinePlay is merging the language of theatre and the language of cinema to create a third unique language” says Subodh. The technique for ‘filming’ plays has evolved after many iterations. Each play is shot over several days in a studio with multiple takes, and many angles just like cinema. Cinematic techniques such as light and sound effects are also used to enhance the drama. Since it combines the intimacy of theatre with the format of cinema, actors and directors have also had to adapt. “It was quite intimidating. Suddenly you have to take something that already exists, put some more creativity into it, some more of your own style, your own vision and not lose the essence” says Ritesh Menon who directed ‘Between the Lines’. Written by Nandita Das, the play is set in contemporary urban India with a lawyer couple as its protagonists. The couple ends up arguing on opposite sides of a criminal trial and the play delves into the tension it brings to their personal and professional lives.

Play

The actors too adapted their performance from the demands of the theatre to the requirements of a studio. While in the theatre, performers have to project their voice to reach a thousand odd members in the live audience, they now had the flexibility of being more understated. Namit Das, a popular television actor, who acts in the CinePlay ‘Bombay Talkies’ says, “It’s actually a film but yet we keep the characteristics of the play alive. For the camera, I can say, I need to tone down a lot.” Vickram Kapadia’s ‘Bombay Talkies’ takes the audience on a roller coaster ride of emotions as seven personal stories unravel through powerful monologues, touching poignant themes such as child abuse, ridicule from a spouse, sacrifice, disillusionment and regret.

The new format also brought many new opportunities. In the play “Sometimes”, a dark comedy about three stressful days in a young urban professional’s life, the entire stage was designed to resemble a clock. The director Akarsh Khurana, was able to effectively recreate the same effect with light and sound design, and enhance it for on-screen viewers. In another comedy “The Job”, presented earlier in theatre as “The Interview”, viewers get to intimately observe, as the camera zooms in, the sinister expressions of the interviewers of a young man interviewing for a coveted job.

Besides the advantages of cinematic techniques, many of the artists also believe it will add to the longevity of plays and breathe new life into theatre as a medium. Adhir Bhat, the writer of ‘Sometimes’ says, “You make something and do a certain amount of shows and after that it phases out, but with this it can remain there.”

This should be welcome news, even for traditionalists, because unlike mainstream media, theatre speaks in and for alternative voices. Many of the plays in the collection are by Vijay Tendulkar, the man whose ability to speak truth to power and society is something a whole generation of Indians have not had a chance to experience. That alone should be reason enough to cheer for the whole project.

Play

Hotstar, India’s largest premium streaming platform, stands out with its Originals bouquet bringing completely new formats and stories, such as these plays, to its viewers. Twenty timeless stories from theatre will be available to its subscribers. Five CinePlays, “Between the lines”, “The Job”, “Sometimes”, “Bombay Talkies” and “Typecast”, are already available and a new one will release every week starting March. To watch these on Hotstar Premium, click here.

This article was produced on behalf of Hotstar by the Scroll.in marketing team and not by the Scroll.in editorial staff.