Kathmandu, July 25
The coronavirus pandemic and subsequent
lockdown has severely hit the advertising business in the country with
estimated losses of about Rs. 6 billion.
According to the Advertising Association of
Nepal (AAN) total value of advertising market in the country, including the
mass media and signage, has crossed Rs. 12 billion.
“The industry has lost about half of its
total annual revenue due to the pandemic. The four-month lockdown has affected
as much as 80 per cent of the total advertising business,” said Rabindra Kumar
Rijal, President of AAN.
He said that advertising spending from the
private sector as well as government agencies went down drastically and the
trend was likely to continue until Dashain, the major festival in the country.
The advertising business tumbled as low as
20 per cent during the initial months of lockdown, said Santosh Shrestha,
immediate past president of AAN.
The government imposed nationwide lockdown
on 24 March and lifted it from 22 July.
Though apparently it seems being created
and catered to the general masses, advertising is a lifeline to the media and
bridge between the producers and media outlets, generally mediated by the
advertising agencies.
As the lockdown forced majority of the
industries and businesses to shut down for an indefinite period, the producers pulled
off most of the promotion campaigns and advertising, said Shambhu Adhikari,
Chief Executive Officer of Cosmos Advertising Agency.
Advertising budget was the first thing to
cut when the companies applied austerity measures during the pandemic. Even the
businesses like banks and financial institutions, and insurance companies significantly
lowered their advertising and promotional campaigns.
Meanwhile, the pandemic wreaked havoc on
mass media channels, newspapers and magazines couldn't be distributed and some
continued only with their digital version of the publication while television
reporting and programme diversity was significantly affected due to the
difficulties in mobility and threat of infection.
Mainstream media lost about 90 per cent of
the advertisement. Large publication houses have announced the closure of their
magazines and laid off journalists en-masse. Two broadsheet dailies from
Kathmandu and hundreds from the districts are still off print.
Advertising industry insiders say that the
print media was almost bare in terms of advertisement while many television
channels continued playing the commercials free of cost as they had to fill the
time which had grown larger because of the constraints in production.
Job loss
Lack of business caused the job losses of
many advertising professionals including the creative writers and directors.
Shrestha said that although there was no specific data, a significant number of
advertising professionals and support staff have lost their jobs temporarily or
permanently. He also said that the looming fear of job loss or salary cut has
affected the creativity as well.
The largest source of advertising during
the lockdown was the government welfare advertising. However, most of it was
directly sent to the media by the government and the ad agencies were least
benefitted by it. Only a negligible number of private sector businesses created
welfare advertising or Public Service Announcement, and most of it was dealt
directly with the media, said Adhikari.
Coronavirus has taken a heavy toll on the
signage business, another important component of advertising. Most of the jobs
in the sector were affected. Signage business has Rs. 7 billion investment,
3,500 entrepreneurs and 75,000 jobs.
Rijal said that 10-15 per cent jobs might
be lost permanently. “We have been paying 50 per cent salary to the staff even for
the lockdown period,” he said.
New Year missed
Producers of cement and iron bars were the
largest advertisers in terms of the amount spent before the advent of the
coronavirus pandemic. "Since most of the small infrastructure projects and
individual construction was affected due to the lockdown, the producers pulled
off most of the advertising," said Adhikari.
Likewise, the disturbance in the supply
chain of products other than the food items and essential goods had shrunk
their market and the producers cancelled their planned advertising campaigns
and did not renew the contract with the media. Commercials of the FMCG (fast
moving consumer goods) products were also reduced drastically.
Advertising business witnessed the largest
losses as it missed the mega season during the Nepali New Year which is the
biggest opportunity for advertisers, ad agencies, media and consumers equally
as many producers and distributors announce discount on the price of goods and
services and offer prizes.
The New Year and fiscal year close period
were the two major business opportunities that they and the media channels
missed during the lockdown.
Digital growth
The COVID-19 crisis has, however, created
an opportunity for digital advertising. The access to internet and digital
platforms as well as public's hunger to get the updates at the earliest has
increased the popularity of the digital media, said Adhikari.
He said that many audiences of print media
and television were gradually shifting to the digital one.
Shrestha also said that the digital trend
in Nepal was started about a decade ago but the coronavirus had given a
significant push to its growth and development. "Now the advertisers plan
their campaign with mobile phone at the centre.”
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