An industry with vast potential appears to lack order with various unresolved issues brimming under the surface

Kathmandu

With the country in dire need of post disaster economic recovery, it is expected that governing bodies address the concerns of major contributors to the GDP. The advertising industry is one such sector with the potential to help with economic recovery; and could provide a significant push towards an economic boom, just as the country needs it the most.

Advertising helps create successful businesses, which then lead to employment opportunities. Even media, the driving force behind growing economies, benefits from stability in the industry, as advertising is the chief source of revenue for mass media like newspapers, television, radio, print magazines and websites. Research has consistently shown that countries with larger investments in the advertising industry are more developed than other countries. For instance, the advertisement industry in the United States creates 18.2 million of the 126.7 million jobs. However, back home in Nepal, the predicament of the advertising industry is such that the government is yet to give due recognition to the industry.

According to the Advertising Association of Nepal (AAN), the total annual revenue of the advertising

industry is Rs 5.5 billion. While it is an industry with vast potential; it appears to lack order with various unresolved issues brimming under the surface.

The present scenario

Although at a very slow pace, the industry was witnessing growth before disaster struck. Post earthquake, the scenario looks far from encouraging. Is there a noticeable difference in the industry before and after the earthquake? Ranjit Acharya, CEO of Prisma Advertising says, “Before the earthquake, the industry was in its growing stage. Growth was rather slow but it was growing

nonetheless. Post earthquake, advertising agencies had to cut down on budgets, as it was the need of the hour. With no help from any quarter it was a necessity to cut down costs.” According to him, most businesses had to cut down on advertising budgets, which led to stagnancy in the industry. He says, “A person must seek medical help when ill and not cut down on medicinal costs. The same is with

advertisements.”

Deependra Tandon, Director of Business Advantage says, “In the first few months after the disaster in April/May we did not have any business. We have gradually recovered now and we hope that the business will revive in the festive season.” He adds that the business is still in its infancy and there is room for improvement.

Ahimsa Yonjan, Managing Partner at TBWA\Benchmark Nepal, says, “The earthquakes led to a rather disturbing slowdown for a month or two, but considering everything that has happened, the industry looks to have weathered the storm rather well”. He adds, “However, as an industry, we do not seem to have learned much from the experience, as there is actually very little difference in communication styles or brand behaviour before or after the earthquakes.”

The mushrooming of advertising agencies

AAN has 298 advertising agencies on its member roster, but there still exist several hundred more agencies that are not registered with the association. With so many advertising agencies operating in the market, it is still generally accepted that most of the advertisements that are produced in Nepal are not satisfactory. On this, Santosh Shrestha, President of AAN says, “Because there is no entry barrier to this industry, anyone can register and have an agency up and running in no time. While this opens a lot of doors for newcomers it leads to compromise on the quality. It becomes a tough job to monitor quality.” He further says, “The world of advertising is creative and fascinating. In Nepal, the industry has an estimated growth of 10 to 15 per cent annually. If we focus on quality control, nothing can stop this industry from growing in the coming years.”

Advertising agencies and advertisement standards

On the compromised quality of advertising and agencies not being up to the mark, Shrestha says, “The quality of advertisement depends of the level of awareness of the society, resources, budget and the economy. Advertisements reflect the attitude of the society. The market is small and the economy is not

progressive. The current focus is on production of effective advertisements rather than creative ones.”

He adds that they are responsible to cater to the mass with limited budget. He says, “Suppose there are three kids who study in grade three, six and eight. Now, all of them must be explained to in a similar manner, in a language they can comprehend. The teacher explains in the easiest way so that every one can understand. The same goes with advertisement.”

Joydeb Chackravarty, Managing Director, JWT - Thompson Nepal has a different view on this subject. He says, “Nepali consumers are exposed to creative advertisements, if not from within the country, but definitely from the world outside. They are intelligent and they know exactly what they want.

Advertisers should not underestimate their level of awareness and should not doubt their intelligence.”

He says that it is high time for the industry to push the envelope in terms of standards and creativity.

Yonjan says, “While I do agree that the overall quality of advertising could be a lot better, I think it is quite unfair to generalise and say that the quality of advertising agencies is not up to the mark. There are a few agencies doing good work locally, so we must give credit where it is due.” He further says, “As with any other industry however, a combination of many factors; such as, lack of industry knowledge and processes, timelines, an unwillingness to provide proper compensation on the side of all parties involved, leads to a large proportion of work being of poor quality. It is the same with art, music and movies. Much of what is produced is quite terrible, but there are those that stand out.”

The clean feed debate

For almost eight years now, AAN has lobbied with the government to introduce a Clean Feed Policy. This policy will ensure content filtering systems that can be used to block foreign commercials aired through foreign channels from reaching the Nepali audience. The main purpose of this policy will be to eliminate the trend of dubbing and encourage multinationals to produce and develop advertisements through local agencies.

Nirmal Raj Poudel, CEO of Welcome Advertising and Marketing, says, “Multinational companies dub foreign advertisements and broadcast them in local channels.  Further, the paid channels also include commercials. This results in quality compromise.”

However, some industrialists claim that clean feed is an uphill task in Nepal. They argue that competition will be killed with the introduction of this policy. A Clean Feed Committee has meanwhile been formed by AAN that has been doing research on the topic and is under dialogue with the government for a quick implementation of this policy.

The right way of doing things

According to some, one of the biggest challenges the industry currently faces is the lack of vision and leadership within the industry. Only self- regulation and quality checks can turn the industry around. Tandon says, “The change must start with the industry itself. Introducing policies is not enough for the development of the industry.” Yonjan has similar views, he says, “We cannot introduce laws to control or fix what are inherently industry problems. What is more necessary is an independent regulatory body that can develop and enforce a code of conduct/best practice model in place for the overall advertising market.”

Although the advertising industry is currently facing an uphill battle, this is still an industry that has enormous potential. With the industry only just beginning to mature, and mediums like digital and new age media opening up, there appears to be much to look forward to for the industry. For the rest of us, it remains the industry to watch.

In parting, it is perhaps Chakravarty who sums it up best — “The next five years are going to be challenging for the advertising industry in Nepal. However, if we follow the right way of doing things and remain honest and integrated there are chances that we can recover soon.”