This is the first time that revenue of advertising industry has posted negative growth. The industry had been growing by 10-15 percent annually in the previous years. [break]
“We are yet to calculate the exact figures. But according to our estimates, advertising revenue has gone down drastically this year,” Bharat Lal Nyachhon, executive director of AAN, told Republica.
Total advertising revenues stood at Rs 4.32 billion in the last fiscal year.
Officials of AAN pointed out ceiling on advertisement spending for insurance and education sectors, political stability, lack of industrial growth and load-shedding are the major reasons behind drop in advertisement revenue. “Downtrend in real estate and manufacturing sector are the other reasons behind the advertising industry´s negative growth,” Raj Kumar Bhattarai, president of AAN, said.
The government has fixed a ceiling on advertisement spending for insurance and education sector in a bit to end unhealthy competition amongst them.
Some agencies said revenue has dropped also because of tariff hike enforced by some media houses.
Officials of AAN also said most of the business houses are carrying out Below the Line (BTL) activities and promoting their businesses through social media which is comparatively cheaper and more effective.
“Most of the business houses are in a ´wait and see´ mood and they have reduced advertisement spending significantly. This has decreased the visibility of advertisement in media,” Sudip Thapa, managing director of ANS Creation, said.
According to AAN officials, revenue has dropped from outdoor media like hoarding boards as well. They said revenue from the segment declined after the Kathmandu Metropolitan City started a drive to remove hoarding boards from major city centers.
Nirmal Poudel, CEO of Welcome Advertising, said revenue won´t increase unless industrial activities gain momentum. “Though trading houses are doing brisk business, they don´t spend much on advertisement,” Nirmal Poudel, CEO of Welcome Advertising, said.
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