A simple question that requires a profound answer. Here’s Dr Bhaskar Das in the March 10 edition of Das ka Dum. Read on…
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Q. Three more weeks in the financial year. According to you, how has the year been for the A&M industry?
A. I can’t give a uniform or homogeneous answer to a question which has both macro and micro elements. One can’t deny the repercussions of the micro environment – both global and local – on the operations of every organisation. The macro-economic factors stem from the geo-political tensions (like the Russia-Ukraine war and China’s bellicosity) affecting global power structure, the shadows of Covid-led health scare and supply chain issues, energy and food crises and the prospect of stagflation looming large for most of the economies. At a micro level, the A&M industry is not outside the operating realities and as a derived business, it also gets impacted. Having said that, I have to de-average the impact by sector and by organisation. For example, an IT company (they can be the client of an agency) might still experience growth inspite of macro volatilities, but some other sectors like FMCG and automobiles, education might experience tepid or no growth. Simiilarly, the experience in relationships-driven Tier 2,Tier 3 agencies are quite different from the metro players.
The impact is felt in some form or the other by all media formats of delivery. For instance, digital including gaming and fintech apps like PhonePe or Gpay have experienced significant growth compared to the legacy media. Given this background, my observation is that the 2022-23 financial year has seen mixed fortune for most companies albeit at different degrees of tepidness. Even those who have grown, aim for a higher percentage of growth, while others who are trying to get out of a negative growth must have been happy so long as they are neutral in their P&L statements.
In media and entertainment, when client needs (read marketing budgets) get rationalised or fragmented and dominated by performance-based marketing, the two players – viz the media company and the agencies – catch cold, as they say. With the atomisation of options in an omnichannel media amplification, the investments get fragmented and accordingly the practitioners feel that the market has been challenging to maintain a steady momentum of growth.
Hence there is no generic answer to how the financial year has been for the A&M industry. The consensus is, with my market grapevine, that the players wish that the business enviovnment could’ve been more conducive. But as they say, even this will pass and I hope that 2023-24 is not a repeat telecast of the last financial year, subject to Russia and China agreeing to a more peaceful world. Everything else will improve if that one variable could change.