It's not just property values that are experiencing a decline; the advertising industry is also feeling the impact of the slowing real estate market.
As reported by industry insiders, leading developers such as DLF, Omaxe, Ansals, and Parsvnath have opted to reduce their advertising expenditures by approximately 5 percent. The advertising market in India is valued around Rs 10,000 crore.
Analysts deem this shift to be a reflection of the dampened enthusiasm among potential buyers, while real estate firms view it as a necessary recalibration of their marketing budgets. An analysis by Adex India, part of TAM Media Research, has revealed that the proportion of real estate advertisements in print media saw a decline of 2 percent in 2007 compared to the previous year. Adex noted that last year, real estate advertisements accounted for 4 percent of the total print advertising and 1 percent of TV advertisements.
S K Sayal, CEO of Alpha G Corp, commented: “Infrastructure and real estate companies have primarily been responsible for the advertising industry sustaining its double-digit growth rate. However, in general, companies and brands have been increasing their expenditure on advertising. But a recent dip in the realty sector has made things worse for the advertising industry. Many real estate companies this fiscal have cut down on their advertising budgets.”
The Adex report indicates that the top 10 advertisers held a combined market share of 16 percent of total real estate advertising volumes in print during 2007. This roster includes prominent names like DLF Group, Parsvnath, Sahara, HDIL, and the Omaxe group. Notably, the South Indian publications captured the largest share of real estate ads, followed by North and West publications, which accounted for 32% and 26% of the total in 2007.
“This is because all real estate companies want a national footprint. Also, these companies are now turning professional. They’re setting standards when it comes to managing their A2S (advertising to sales) ratio,” explained Jagdeep Kapur, CMD of Samsika Marketing Consultants.