EEMA-E&Y report predicts 25% growth for Event & Activations in 2 years

01 Aug,2012

By A Correspondent

 

The Indian event and activation industry in the organized sector is expected to grow at an average rate of 25 per cent from its current size of Rs2,800 crore to Rs4,375 crore in 2013-14. Out of Home (OOH) and radio segments are said to be one of the key growth drivers of the event industry over the last three years. The next phase of growth in activations is expected to come from ruralIndiaas the metros are said to have reached a saturation point; hence the need to tap the large consumer base in the rural belt. These are some of the findings from the EEMA (Event & Entertainment Management Association) and E&Y (Ernst & Young) white paper on the ‘The Business of Experience – The Indian Events and Activations Industry’.

 

In addition to these findings, 57 per cent of the surveyed respondents are of the opinion that the share of the total marketing spends attributed to BTL (Below the Line) activities (including events and activation) is expected to grow around 10 per cent over the next two to three years to reach nearly 20 per cent of the total marketing spends. The respondents also believe that on the road ahead, profit margins of the events and activation companies will grow at an average of around 15 per cent.

 

The respondents were also asked to list five most critical issues they expect to face over the next few years. Inadequate event infrastructure; Talent acquisition and retention; Poor image/ Lack of transparency; High competition levels and Inability to demonstrate ROI’s were the top five issues that were a cause of concern for the respondents.

 

In conversation with MxMIndia, Brian Tellis, President, EEMA talked about the two areas of growth for the event and activation industry in the near future. According to Mr Tellis, the unorganized part of the industry is estimated to be as large as the organised sector, if not larger: “The industry will grow from two areas. First, the industry will start getting a larger share of the existing marketing pie. The existing marketing budget of the brand is estimated to grow by 10 per cent as far as experiential marketing is concerned. The second area of growth will come from the bits of the unorganized sector which will become organized. So yes, it is time for high growth.”

 

On the takeaways for the industry from the white paper, Mr Tellis said that the industry should first start developing its own Intellectual Properties (IP’s) because the ROI on Intellectual Properties is very high. He also pointed out the need to develop a calculation matrix and ROI matrix as this would enable marketers to confidently spend more money on BTL or experiential marketing.

 

Talking about the challenges and opportunities for events and activation industry in the long run, Mr Tellis said: “There is a need to convert the unorganized sector into organized sector and the to develop Intellectual Properties (IP) because that will ensure sustainable revenues in the long run.”

 

MxMIndia also spoke to other industry players and marketer for their views on the challenges and opportunities facing the event and activation industry and its effectiveness in brand building.

 

According to Mr Girish KJ, vice president-Wizcraft International, over the years as the economy expanded rapidly, so did the need for brand activation, and experiential marketing has become a key value driver in the marketing mix: “In certain sectors, we find that  experiential marketing is what delivers high value to brands. We find a lot of first time clients simply being overwhelmed by the value they derive from investing in brand activation. Eventually, brands that invest in creating meaningful experiences will have a much better reason to be in the customers’ consideration set. In terms of engagement with communities, branded experiences deliver the best return on investment. We have seen that branded events and activation delivers among the highest return with a carefully thought out strategy and a well planned and executed branded experience.”

 

On the challenges and opportunities facing the events and activation industry, Mr Girish KJ said that investing in and creating experiential marketing professionals for tomorrow; and attracting and retaining the best and the brightest talent will always be a challenge. “To today’s digitized, desensitised, over-communicated customer, the power of the brands experience cannot be over-emphasised. Globally, customers are shunning main stream, talk-down communications and clamouring to be involved with their brands. That is the opportunity for our industry to embrace.”

 

Yogesh Nambiar, Head, Events Operations, TransStadia felt that events and activations industry is expected to grow in the future, but the real growth is however expected only post January 2013: “Currently we are witnessing a downslide from the event management side of the business, because most of the marketers are more or less looking at the Intellectual Property (IP) side of the business and not the event management companies or agency. Today marketers are looking at events and activations as an extension of their marketing arm, so you have to have good ideas to increase ROI’s for brands. From an ROI basis, I believe activation or BTL plays a large role for marketer or brands.”

 

Kamal Nandi, Executive Vice President (Marketing and Sales), Godrej Appliances observed: “With more and more brands give experiential experience to consumers, I believe events and activations are only going to increase because that allows consumers to experience the products. Yes, marketers are spending more on activations. But, if you compare ATL and BTL spends, you will find that BTL spends have been constantly increasing over the years, and more money is being spent on experiential marketing. In our industry, events and activations are gaining momentum; however more and more spends are increasingly shifting towards BTL activities. So we definitely see this as an effective way of connecting with consumers and therefore as an industry we are spending more in this area.”

 

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