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Media inflation challenges advertising growth

The local advertising industry has recorded a marked growth in the recent past, an advertising expert said.

On the average the growth of the local advertising industry has been about 26 percent over the last 10 years which is primarily driven by media inflation. Creatively the industry has grown but in terms of business value, it has not grown as no new categories have emerged.

There have not been any significant competitive challenges for any big brands, which generally fuel the industry. The professional standards are also growing, slowly but surely. The need for integrated communications is also developing, Leo Burnett Solutions, Managing Director Ranil de Silva told Daily News Business.

“The advertising industry targets 20 percent growth. Although the post war period has seen many industries record rapid growth, our industry will take some time to register this growth as money must get into the hands of consumers and consumer spending has to enhance for advertising investments to grow. Today the disposable income of the average person has not increased, therefore he does not have the ability to indulge, thus the opportunities for marketeers is still limited due to the limitation in the size of the pie, he said.

There has been little or no change in how the self-regulatory responsibility has evolved. The International Advertising Association (IAA), which is an international organization with a chapter in Sri Lanka was taking up an initiative to address the subject but this effort is still to be implemented, he said.

India is a power house and they have a very strong base in the region. We at this are not on par with the Indian industry and their standards specially in terms of their production resources, people and standards. The leading agencies in Sri Lanka are multinational agencies, which is the norm in this industry in almost every country. Our networks do have a strong presence in India. Our source of strength comes from the Indian operations, which have had a head start to us in this industry, he said.

“Some marketeers are using Indian advertising to support their brands. This is done for two reasons, one being a multinational client requirement, wherein the principals insist that the brand is promoted with the foreign material as the Sri Lankan market is too small to warrant creative executions locally and may not fulfill their quality expectations. The other is that there is a lot of Indian products entering the market and therefore the distributors find it easy to use the Indian advertising to support their brand, as they are possibly checking out the potential for the brand and the category in the market. We as an agency would love to produce local work for every possible client rather than use foreign material but circumstances sometimes necessitate it to be otherwise, he said.

“There is an on going effort to improve our standards at Leo Burnett. We invest extensively in training as well as send our people overseas to get exposure with the sole ambition of improving our own standards. In my capacity as the representative for the Cannes Lions, I have also played the role of giving opportunities to young Sri Lankan professionals to attend global and Asian programs to expose themselves to world standards. During the brief period I have been doing this task, we have provided 20 young people the opportunity to attend many different advertising forums, competitions and festivals, he said.

“The local advertising industry faces challenges such as ensuring ethical and fair practices in the industry, gaining fair compensation for our services as professionals, developing our talent and retaining them. It is important to attract talented young people into the industry.

“It is also vital to help improve creativity to gain its place as the means to achieve the results pursued by a brand, managing the tripartite partnership and to ensuring a fair playing field,” he said.

SJ

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