Things are not as bad as they seem. Group M chief executive officer, Vikram Sakhuja, is, as he calls it, cautious. But he’s optimistic as well. Considering the slowdown in the economy, Sakhuja’s prognosis should make for a happy start to the year.
“Looking at 2009, we are cautious and are projecting a much sharper drop in ad spend growth than in ‘08 -- but we are still looking at 9% over ‘08 , and that’s without taking elections into account -- and they are a contributor. We expect to close ‘08 at 15% over ‘07.”
He adds, “Typically when its 8%-9% market growth, agencies and clients spend less because a large part of the growth is normally fuelled by emerging sectors, and the new economies, by which I mean SMEs. Even if you are looking at 15-18% growth, that growth comes not so much from the established companies as much as from the smaller ones”. Growth will come from smartness, says Sakhuja. “We have to be a whole lot smarter. I’m hoping that people who are well organized are going to be in a better position to handle growth in 2009, because clients in general will be looking to actually make the money work harder,” he adds. Sakhuja says margins will continue to be under pressure. “ Clients look at cutting costs, I am hoping that we can establish value,” he adds.
Sakhuja is happy with Group M’s 08 performance. “While we have seen some pressures towards the fag end of the year, we have had very aggressive growth in the first nine to ten months. Growth has come from organic business, as well as new clients that we have won, and diversified businesses in the area of content, business planning and sports consulting,” is his 08 wrap up.