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Firms' austerity steps to hit event mgmt industry

Sapna Agarwal in Mumbai | January 02, 2009 11:30 IST

Big-ticket events are likely to witness a 50 per cent drop in 2009 as corporates have cut down on sponsorships and marketing spends. And, its impact is being felt across all advertising segments television, print and events.

The Rs 1500-2000-crore (Rs 15-20 billion) events industry will see a slowdown in growth to 10-15 per cent in 2009, from 25-30 per cent in 2008, said Sabas Joseph, director, Wizcraft International, which holds properties like IIFA and Apsara awards.

The October to December quarter and the January to March quarter are the most crucial period for the events industry, accounting for close to 60 per cent of the overall industry revenues.

The October-December quarter is the festive season and there are a lot of events and this accounts for close to 20-25 per cent of the entire industry revenues whereas the January-March quarter see all the annual awards functions and the Meeting Incentive Conference Events (MICE)  like annual conventions for banks, insurance, financial companies and trade shows and is a more important quarter, accounting for close to 30-35 per cent of the industrys revenues, shared Manuj Agarwal, chief operating officer of Percept D Mark (PDM).

Whil the annual events like Filmfare, IIFA and Apsara will continue, sponsorships for concerts and performances in events like the Indian Premier League (IPL) and one-off events, trade shows, conventions have become difficult. Concerts and celebrity events is a Rs 150-200 crore (Rs 1.5-2 billion) industry.

Each of these events can cost anywhere between Rs 2 crore (Rs 20 million) and Rs 4 crore (Rs 40 million) and there will be a drop of up to 50 per cent in such events in 2009, said Joseph.

Additionally, events that happen will be less hyped and will comparatively cheap to as event management companies struggle to find sponsors.

There is a pressure on spends and corporates have changed their entire outlook to sponsorships. They are no longer happy with just reach and backdrop banners.

They want to know how they can create a connect between their brand and the customers through a programme, said Otis Dsouza, director, Fountainhead.

As sponsorships are declining, event companies are looking at different forms of revenue generation. We are considering different forms of revenues like ticket sales, merchandising and even selling of parking space, said Dsouza who is planning on holding an Open Sky Music festival in February with sponsorships from companies like Diageo.

The silver lining for the industry is the small scale events, which focus on brand activations at the point of sales or point of contact. Industries like telecom, FMCG, insurance, white goods that have a mass appeal are looking at greater customer outreach.

Brand activations and promotions will grow from Rs 250-300 (Rs 2.5-3 billion) crore in 2008 to Rs 350-400 crore (Rs 3.5-4 billion) opportunity in 2009, said Joseph. For Wizcraft, promotions and brand activations account 30 per cent of its the Rs 250 crore revenues. We expect promotions and brand activations to grow from 30 per cent to 40-50 per cent in financial year 2009-10, said Joseph.

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