Telecom, auto ad budgets fall, sales grow: Assocham

New Delhi : Companies in the telecom and auto sectors have witnessed robust growth in turnover despite not increasing their advertisement budgets, according to the Associated Chambers of Commerce and Industry (Assocam), an industry lobby.

In a study titled “Cost-Benefit Analysis of Advertisement Campaigns”, Assocham said: “The amount spent on the marketing expenses in proportion to the sales has undergone a substantial decline in 2008-09.”

However, it added that Indian telecom and auto companies, “despite spending less on their advertisement and promotion campaigns, were able to increase their sales volume significantly”.

The chamber said that top companies in the telecom sector — “which used to be fervent advertisers in the past” – rode the 50 percent growth in the number of wireless subscribers in 2008-09 and cut their promotion budgets by 3 percent.

“Their net sales increased by 26.9 per cent despite the decline in their advertisement expenditure,” Assocham said.

According to Assocham, telecom operator Reliance Communications reduced its promotion expenditure by 26 percent in 2008-09. But still it gained 21 percent in net sales.

As per Assocham’s analyses of income and expenditure for the auto sector, top two-wheeler companies decreased their advertising expenses by 5.87 percent in 2008-09 as compared to 2007-08. However, it found the sector’s net sales growing by 2.5 percent.

For instance, TVS Motor cut advertising expenditure by 12.02 percent in 2008-09. “However, according to their net sales figures, TVS Motor registered a growth rate of 14.02 percent,” it said.

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