Advertising spend LY at Rs.161 b though economy crashed – Dr Rohantha Athukorala
View(s):Even though the economy shrank by -7.8% last year, the advertising spend at rack rates registered last year was 161 billion rupees at a +14% growth which means that Sri Lankan organizations yet believed in the country even with all the challenges, governance issues and poor policy planning like the management of the current drought said Dr Rohantha Athukorala the Country Head for Clootrack Sri Lanka, Maldives and Pakistan. He was the Guest Speaker in the MBA a programme, PIM, University of Sri Jayewardenepura.
From the Rs 161 billion spend there must have been contract deals by large spenders and media stations hence exact spend might be lower but the point is the optimism that exists he said. It is estimated that 2023 will have a spend of Rs.190 billion given the current trend of marketing spend as at end July.
Dr Rohantha Athukorala at alma mater PIM, University of Sri Jayewardenepura
The top the two channels Derana and HIRU absorbed half of the TV spend and registered a growth of 17% on the medium making it the choice of the business community for awareness building and brand equity building. Normally, we see a similar spend on below the line activity like sponsorships, consumer promotions and trade marketing said Athukorala. The best time build brand equity in a consumers mind is due to a recession as the share of voice is low in categories.
The key burning issues cited by the corporate sector as per the recent Nielsen study are Spiraling electricity prices, increasing costs of raw Material, import restrictions, the high price of petrol and diesel, difficulty to obtain suppliers to procure raw material, exchange rate fluctions and the inability to achieve targets due to the contracting disposable income. But the increase share of voice is encouraging. Press as a category remains important as it helps form opinions in society whilst the rest are fleeting mediums opinioned Athukorala.
There are 4.8 million TV households in Sri Lanka with 14.6 million people who are above the age of of 15 years of age. The challenge is how to sustain this given that first quarter,2023 saw a -11.5% GDP decline and research reveal that seventy three per event of households have reduced consumption in food, beverage and grocery items this year. When exports are estimated to drop by -22%, it means that disposable income is going to shrink, hence the only way to come out of the economic crisis is by driving Free Trade Agreements( FTA’s) so that exports can be 28 billion dollars from the current twelve billion said the Former Director and Chairman of Sri Lanka Export Development Board. This was the model that Bangladesh and Vietnam modeled whilst driving Tourism must target a 7 billion dollars within the next two years he commented. We have to get out of the crisis by reform and not only just restructuring debt be it domestic or international said Athukorala.
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