ASSOCHAM startles with absurd AdEx projections

I cannot believe that I read this on WARC.com, a site that I visit regularly to catch up on developments in advertising, media and marketing around the world.

"India's current economic difficulties will result in a halving of company advertising budgets during the festive months from October to December, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) has said.

[caption id="attachment_1152247" align="alignleft" width="380"] The Associated Chambers of Commerce and Industry of India (ASSOCHAM), India's premier apex chamber, covers a membership of over 4 lakh companies and professionals across the country.[/caption]

The figures were based on an ASSOCHAM survey of around 1,200 member companies in the cities of Delhi, Mumbai, Chennai, Hyderabad, Bangalore, Pune, Kolkata, Ahemdabad and Chandigarh. Most respondents said theiradvertising expenses had declined by 45% to 50%on a year-on-year basis.

Mr. DS Rawat, ASSOCHAM Secretary General, speaking as he released a paper entitled 'To Slash Or Up Ad Expenditure This Diwali?,' claimed the total ad budget for print, television and radio during the next quarter could see a cut of more than 50 per cent year on year.

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He said television and radio networks faced tough times ahead as advertisers cut back on budgets for brand marketing and promotions."

You think this is bad? Our neighborhood doomsday prophets have more in store.

"They will be spending far less and will keep a tight leash on their budgets," the survey said. "Automobile and consumer durables in particular could see a 65 per cent slump in advertising spend," the WARC article added.

"One consequence of this is widespread rate cutting, especially in print, where packages are being offered at a quarter of the normal price rate. And the paper added that as this also included the processing costs of the ads, the total cost had fallen to a fifth. TV channels and radio networks were also reported to be offering heavy discounts", Rawat noted.

And then, at the end of the WARC nutcase piece, we see this. "Earlier this month, for example, media buying agency GroupMchanged its 2013 growth forecastsfor India from 9.9 per cent to 8.5 per cent."

(All emphasis is mine).

Six extraordinary and stupid, uninformed and irresponsible statements:

1. a halving of company advertising budgets

2. advertising expenses had declined by 45 per cent to 50 per cent

3. a cut of more than 50 per cent

4. a 65 per cent slump in advertising spend

5. a quarter of the normal price rate

6. the total cost had fallen to a fifth

And the statements are not being made by some uneducated, lay commenter. They're made by the secretary-general of one of India's foremost industry bodies, ASSOCHAM.

What this article does is to make me question the quality of members that ASSOCHAM attracts. How can a survey with about 1,200 respondents throw up gobbledygook like this, unless the respondents are completely unqualified to have an opinion on the questions asked? To say that spends in auto and consumer durables will go down by 65 per cent is so much of the mark that the statement doesn't even merit contempt.

As bad as these numbers are the figures that they quote on discounts by newspapers. To day that the rate cards are discounted by as much as three-quarters is ridiculous. Is The Times of India discounting by that much? Is the Hindustan Times? Is Malayala Manorama? Is Ananda Bazar Patrika? What are these publications (if any at all exist) that have discounted to this degree?

How can ASSOCHAM figures be so much out of sync with what others think? "The media and entertainment (M&E) industry is likely to grow at a marginally lower pace this year at 11.8 per cent over 2012, and will touch Rs 91,700 crore, says a FICCI-KPMG report. Last year, the domestic M&E industry grew at 12.6 per cent to Rs 82,000 crore from Rs 72,800 crore the year before, said the report."

As is the case with GroupM's forecast, FICCI-KPMG might well downgrade their forecast as well if they had to do an updated study today. But that forecast would also show just a correction by, at the most, a few percentage points; it would be nowhere as startling as the ASSOCHAM numbers.

What is ASSOCHAM, you ask? "The Associated Chambers of Commerce and Industry of India (ASSOCHAM), India's premier apex chamber covers a membership of over 4 lakh companies and professionals across the country. It was established in 1920 by promoter chambers, representing all regions of India," they say about themselves.

What is ASSOCHAM's vision? "Empower Indian enterprise by inculcating knowledge that will be the catalyst of growth in the barrier-less technology driven global market and help them upscale, align and emerge as formidable player in respective business segment," we're informed.

If this is the quality of the 'knowledge' that has been inculcated, one shudders to think of what ASSOCHAM's members do with the rest of the 'research' that they do. How accurate are the numbers or the data in the various research papers that they present from time to time or the surveys that they conduct? Is data of this quality being used to try and influence opinion with ministries and other governmental organs?

ASSOCHAM?

Can you please check what on earth went wrong with this ridiculous survey?