With various trading companies and manufacturing industries adopting cost cutting measures, scaling down the advertising budget being one of them, leading advertising agencies have recorded a sharp downfall in their annual turnover.[break]
"A downturn in real estate and automobile business, which are the largest advertisers, has led to a sharp decline in the revenue generated by the advertising industry this year.
Besides, other sectors too are revising their marketing strategy and are implementing radical cost cutting plans," said Raj Kumar Bhattarai, president of AAN.
Fast Moving Consumer Goods (FMCG) industries have almost halted the yearly budget they spend on advertising.
Sudeep Thapa, managing director of ANS Creation, said multi-national companies (MNC) have started using direct trade channels rather than spending on advertisement. "Media houses are also at saturation point as they are not able to implement innovative ideas and marketing plans," said Thapa.
According to AAN, the volume of ad business drops by 15 to 20 percent every year from mid-November to mid-March but this year the figure has gone up to around 25 percent on average. Print media ads declined by 20 to 25 percent while radio and television ads has declined by 15 to 20 percent.
"The economic crisis has hit the ad industry not only in Nepal but also worldwide since 2009 after the global financial crisis," said Nirmal Raj Paudel, CEO of Welcome Advertising. According to a study, global ad spend growth forecast for the year 2010 is hardly 1 percent.
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