The overall advertising market has decreased by almost 50-55 percent in the past 3 years

Times are challenging for the Nepali advertising industry. After going through a disastrous period during the Covid-19 pandemic, Nepali advertisers and marketers have found themselves surrounded by a deep economic slowdown in the country. The market demand for goods and services has slumped sharply which is also reflected in the reduced advertising expenditure and activities in the country. Ranjit Acharya, CEO of Prisma Advertising, observes that almost all categories of businesses are in the ‘survival of the fittest’ mode. The veteran marketer and motivational speaker, who is in the advertising business for over the last three decades, also says that social media platforms have provided advertisers with cheaper alternatives to reach out to target audiences. In a conversation with the HRM, Acharya talked about the current problems surrounding the advertising market, new trends, the rise of social media, the implementation of the Clean Feed Policy, and the formation of the Advertising Board, among other topics. Excerpts:

How do you observe the current state of the market of advertising and marketing in Nepal?
Nepal’s advertising and marketing industry was steadily growing till 2020, due to increasing globalization and the rise of digital technologies. While traditional forms of advertising, such as TV, outdoors, and print ads, still played a significant role in the Nepali market, digital advertising slowly emerged as a rapidly growing segment.

However, the advertising industry in Nepal is still relatively small compared to other countries, and many companies are still hesitant to invest in marketing due to various challenges such as a lack of skilled professionals, limited infrastructure, and the country’s unstable political and economic environment. However, the market has become highly competitive and companies trying to find unique ways to stand out in the crowd.

Social media sites like Facebook, Instagram, TikTok, and YouTube are increasingly becoming popular among Nepalis, especially younger people, and have become key platforms for advertisers to reach their target audience. The trend is expected to continue in the coming years as more Nepalis have access to the internet and mobile devices.

Overall, the advertising and marketing industry in Nepal has significant potential for growth, but it also faces various challenges that need to be addressed for the industry to thrive.

How has the economic downturn affected the advertising sector?
The ongoing economic crisis after the Covid-19 pandemic has further brought a drastic slump in the Nepali advertising industry. The overall advertising market has decreased by almost 50-55 percent in the past three years. Due to the liquidity crisis, major businesses like infrastructure, manufacturing industries, and automobiles which are the major advertisers have suffered a lot. The non-availability of funds and the decrease in consumers’ buying capacity have impacted the overall advertising industry. Traditional forms of advertising like print, TV, and radio are suffering amidst all this.

How are marketers and advertisers coping with the challenges?
Marketers are struggling to sustain their businesses and almost all categories of businesses are in ‘survival of the fittest’ mode. First, cost-cutting measure for all the advertisers has been marketing activities. Most of the big advertisers are just sustaining their visibility with bare minimum budgets. The focus of advertisers has shifted to digital platforms which are cheaper mediums.

Q: How marketers should take a different approach in difficult times like these?
Marketers in Nepal should prioritize empathy and authenticity, leverage digital channels, be creative and innovative, collaborate with others, and monitor and adapt their marketing strategies to succeed during difficult times.

During tough times, consumers are looking for brands that they can trust and relate to. Marketers should focus on creating authentic and empathetic messages that resonate with their target audience’s current concerns and struggles. With more people staying online, marketers should increase their digital advertising efforts. Social media platforms like Facebook, Instagram, TikTok, and YouTube provide an excellent opportunity for advertisers to reach their target audience and communicate their messages effectively.

In these times, marketers need to be creative and find innovative ways to stand out in the competition. They can experiment with new marketing strategies like influencer marketing, user-generated content, or gamification to create engaging and memorable experiences for their target audience.

Marketers should consider collaborating with different brands, NGOs, or community organizations to pool resources and create more impactful campaigns that address the challenges faced by their target audience. Such collaborations can help build a sense of community and social responsibility.

Brands can leverage the discounted prices of traditional mediums like print and TV, and build top-of-mind (ToM) recall for their brands through effective utilization of available budgets.

Finally, marketers should continuously monitor their campaigns’ performance and adapt their strategies based on the changing market conditions. By tracking their campaigns’ metrics and consumer feedback, marketers can optimize their marketing efforts and ensure they are resonating with their target audience effectively.

How has the proliferation of digital and broadcast media helped the growth of new trends in the advertising market in Nepal?
The proliferation of digital and broadcast media has had a significant impact on the growth of new trends in the advertising market in Nepal. With the increasing popularity of social media platforms like Facebook, Instagram, TikTok, and YouTube, advertisers in Nepal have found new and innovative ways to reach their target audience.

One of the biggest advantages of digital media is that it allows for more targeted and personalized advertising. Advertisers can use data analytics and insights to understand their target audience’s preferences, behaviors, and interests and create more customized and relevant ads. This approach not only helps to increase the effectiveness of advertising but also minimizes ad fatigue and improves the overall user experience.

Another significant trend in the advertising market in Nepal is the rise of influencer marketing. Social media influencers have emerged as powerful endorsers of products and services, particularly among younger audiences. Influencers with large followings and high engagement rates can help brands reach a broader audience and create more authentic connections with their target consumers.

Broadcast media, on the other hand, continues to be a significant channel for advertisers in Nepal. Television and print ads are still widely used by companies to reach mass audiences. With the increasing popularity of digital media, broadcast media has also evolved to include online streaming services and podcasts, providing more opportunities for advertisers to reach their target audience.

How do you see the future of print media in Nepal in this digital age?
The future of print media in Nepal in this digital age is uncertain. With the lack of proper monitoring, and the non-availability of basic data like readership numbers, circulation, and reach, it is very difficult for advertisers to choose media outlets. As more people move towards digital platforms for news and information, print media outlets are facing significant challenges.

The transformation from print to digital formats is happening slowly but steadily in Nepal. Many traditional print media outlets have started to adopt digital formats by launching their websites, mobile apps, and social media channels. They have also started to produce more multimedia content, such as videos, podcasts, and infographics, to cater to their digital audience’s preferences.

However, there are several challenges that traditional print media outlets face in this transformation process. Some of the significant problems include limited resources and infrastructure, the digital divide, monetization, content quality, and credibility.
Traditional print media outlets can no longer rely solely on print formats, they must find a way to leverage digital technologies and platforms to stay relevant and reach their target audience effectively.

How is influencer marketing changing the landscape of advertising? 
Influencer marketing has become an increasingly popular form of advertising in Nepal in recent years. Influencer marketing involves collaborating with social media influencers who have a large fan following on platforms like Facebook, Instagram, TikTok, and YouTube to promote a brand, product, or service.

Though the trend is picking up fast in Nepal, the issue of credibility has been creating challenges for advertisers to choose the right influencers. The increasing negative publicity of influencers and celebrities has alarmed advertisers in recent times. The weak regulatory framework for influencer marketing and the limited availability of credible influencers has always been a concern for advertisers.

Despite the problems, influencer marketing is changing the landscape of advertising in Nepal by providing brands with a new way to reach their target audience, build trust and credibility, and create authentic and personalized content. It will be interesting to see how brands and influencers navigate the unique challenges and opportunities of this emerging form of advertising in the coming days.

How do you assess the two-and-a-half years of the implementation of the Clean Feed Policy? 
The Clean Feed Policy has both positive and negative impacts on the advertising industry. Though the anticipated growth in television advertising is not yet evident, if efforts are put to promote Nepal’s advertising opportunities to MNCs based in India then there is a significant opportunity to attract hundreds of brands to Nepal. Some policy changes like making compulsion to advertise imported FMCG goods can help boost growth in TV advertising.

Has this policy become a spur to the growth of innovation and creativity in the production of TV commercials?
This policy has promoted the local advertising industry, as we witness many MNC brands creating their local advertisements, and the quality of production has also improved significantly over these years. Coca-Cola’s Nepali advertisements have been used in other countries like Bangladesh, which is good news for the Nepali advertising industry. This policy has somehow helped in generating more employment in the audio-visual production sector. They have been experimenting with new storytelling techniques, visual effects, and music to make their ads more engaging and memorable.

Have the objectives of the implementation of the policy been achieved?
The objectives of the Clean Feed Policy in Nepal were to promote and protect Nepali culture, language, and the advertising industry. While the policy has had some positive impacts, it is debatable whether it has fully achieved its objectives.

One of the key objectives of the policy was to promote the Nepali advertising industry by giving local advertisers and advertising agencies more opportunities to reach Nepali audiences. The policy has indeed increased the number of local advertisers and production houses in Nepal, leading to the growth of the local advertising industry. However, it is unclear whether this growth has been sufficient to fully achieve the objective of promoting the industry.

While the policy has certainly led to the promotion of Nepali culture and language, it is unclear whether this has been enough to achieve the objective in this regard.

The Clean Feed Policy has also had some unintended consequences. For instance, advertisers are now promoting their products and brands from social media and this diversion has taken away significant advertising budgets, which get routed through India or other countries.

There is a need for the promotion of the Nepal market’s potential in major advertiser bases, basically Indian metros, the base of most of the MNCs and Indian brands. Direct one-on-one promotion led by an advertising board can yield results.

It’s been over two years since the formation of the Advertisement Board Nepal by the government. Has the board been able to regulate the advertising and marketing sector to contribute to its growth? 
The advertising board has initiated a few processes of regulation by issuing a code of conduct, by initiating the process of formalizing National advertising policy, categorization of advertising agencies, etc.

The recent ban on liquor advertising in all types of media and other platforms has once again become counterproductive. This has further helped in reducing overall growth. Somehow, the activities and strategies expected from the advertising board have not yet materialized so the broader concept of governing board is yet to mature.

It is expected that the board will make some strategic policies and moves to help regulate the industry and create positive growth in the overall market.

What shortcomings are needed to be overcome to regulate this sector properly? 
There is a need to have comprehensive advertising regulations that cover all forms of advertising, including online advertising, social media advertising, and influencer marketing. The current advertising regulations in Nepal are limited and outdated.

Similarly, even if regulations are in place, they may not be enforced effectively. There is a need to strengthen the enforcement mechanism to ensure that advertisers comply with regulations. For this, the Advertising Board will have to play a leading role.

Likewise, the advertising sector in Nepal lacks transparency in its practices, such as the use of ad targeting and data collection. Advertisers should be required to disclose their advertising practices to consumers.

At the same time, there is a need to establish an effective monitoring and reporting system for advertising practices in Nepal. This could be achieved through the creation of a regulatory body that oversees advertising practices in the country, which is the Advertising Board now.

Many consumers in Nepal may not be aware of their rights when it comes to advertising and may not know how to identify and report misleading or false advertising. So, there is also a need to educate consumers about their rights and how to identify and report misleading advertising.

There is a need for collaboration between government, industry, and civil society stakeholders to develop and implement effective advertising regulations. This can help ensure that regulations are comprehensive, effective, and sustainable. Basically, the Advertising Board will have to steer this entire segment by taking a leading role.

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