Advertising industry news-Hard hit by COVID 19, seeks govt support

A pandemic is enough to stir up the economy of significant nations like the USA. All sectors are struggling to meet their daily needs. Advertising industry news shows that marketing agencies are no alien to the crisis. Crashing markets and lack of investments have resulted in bad shape for this field. The Advertising Agencies Association of India (AAAI), in a letter to the ministry of Information and Broadcasting, has raised their issues concerning the same.

The problems

Most companies that would have otherwise invested heavily in promoting their products are now frightened to make a move. The first costs that any company decides to cut are to its marketing. In such a problematic situation, ad agencies are not able to function. These agencies are in grave danger as they are unable to provide the salaries to their employees. The Advertising Agencies Association of India (AAAI) which accounts for 80% of advertising spends in the country has added that many ad firms are on the verge of bankruptcy due to a lack of income and cash flow.

The demand

This Advertising industry news also states that the association supports the government’s decision to eliminate personal contact because of the pandemic. That being said, they also added although the steps are necessary, they attach considerable costs to them. They have requested for some practical solutions such as:

Amortisation benefit- In the letter, the AAAI has urged the government to allow for these benefits and treat the same as an investment. This will help in gaining an increase in consumer demand, which can help boost the economy. Ads are one of the most effective ways of increasing demand. They have stated that these benefits should be allowed for a tenure of 3 years so that companies spend more on advertisements.

Weightage to ads in tax benefit- The letter also gives a simple solution of giving enough weightage for the money spent on ads. An increase in the ad paid can happen in this way.

Tax return and GST-It has also been conveyed that ad agencies have not received their due amounts from It refunds. They stated that the industry has always had to pay higher amounts than the profits they made. The letter stated that PSUs and the government had not cleared their payments too. This has also been hampering the functioning.

Ashish Bhasin, the president of AAAI, said that they only wanted the money that is rightfully theirs. They have also demanded that further, there should not be any TDS deductions on the payments received as the profits would hardly be existing.

Additional credit limit from banks-Pointing out that the government should see the advertising industry’s role essential in reviving the economy, the credit limit should be increased.

Conclusion- This Advertising industry news shows that all industries are hard hit by the ongoing crisis. Immediate relief from the government is needed to allow the economy to bounce back. Concrete steps as suggested by this association could help increase the

Consumption by consumers.

Faqs

• Whom do advertising agencies serve?
• Advertising agencies are creative agencies that produce ads and serve all types of clients for marketing purposes.
• What is the Advertising Agencies Association Of India?
• It is a self-regulating body for reforms associated with advertising agencies.