It is a well known fact that we had a splendor time in Pakistan’s banking industry during recent years. We all witnessed the fact that banking sector was the most expanding and growing sector of Pakistan (along with Telecom). First time in the history of Pakistan, consumer products were launched and banks were offering easy and small loans to every employee of the Government and private sector.
However, the global economic downfall has impacted our local banks as well, even with the 7.5 billion US $ International Monetary Fund injection couldn’t do much. The banking sector has yet to reach the moment of relief.
Increasing terrorism, instable political situation, lawyers’ strikes, protests and panic created by media happen to be the killing factors for the economy. All this created a new situation where even Bank al Falah was short of cash. From MCB to NBP every bank has become very careful in offering loans and credits to its customers. A recent report of SBP has revealed that slowdown was also seen in auto finance which was the salient product of the last 5 years. Higher profit rates and dollar price were the other factors which were pushing car sales to lower direction. Mortgage finance and advertising were also seen the slow trend.
According to some facts and figures, during the 4th quarter of 2007, print and electronic media advertising were dropped by 25 % from 375 million to 280 million by banks. During that period HBL was the leader with 50% shares in advertising among all the banks. Do you remember what I am talking about…..yes, you are right…. I am talking about “Main Haoon Younis Khan and aur mian HBL ka hisa hoon”. That was a huge corporate campaign, run by HBL.
In first quarter of 2008, banking sector was under pressure and most of the attention was ATL advertising (Above the line). Over all print and TV advertising remained at lowest level and was only 80 million during that period. However during the 3rd quarter of 2008, banks tried once again to generate interest in the market and regained the momentum. As a result TV and print advertising reach to Rs.400 million. Once again HBL contributed the most of it with 30 % share in the whole budget. Standard Chartered and Bank Al Habib remained other major players with 15% SOV and UBL with 10% share.
The last quarter of banking advertising was not so promising due to aggravated political situation in the country. One big launch was the Phelay Munafa Scheme of the Bank of Punjab. The budget of the campaign was 50 million alone. Before this launch, ABL launched the same campaign with 10 million budget. These schemes were offering advance profit.
By the way, another bank, I mean SME Bank (Small and Medium Enterprises Bank) is just going to launch a similar scheme.
What we expect this year….
With some foreign banks like Barclays, Royal Bank of Scotland (RBS) and Samba, we are expecting some big advertising campaigns especially during the cricket tournaments. These banks have already taken over the operations – RBS for ABN Ambro, Samba from Crescent bank. However, the Barclay Bank has to start from scratch. RBS has sponsored a 20-20 cricket tournament shortly after its emergence in Pakistan. They branded bridges in all big cities i.e. Karachi, Lahore, Islamabad and Peshawar. Barclays have been trying to show its presence in Karachi city.
It looked that both these banks were initially troubled by global crisis, but I expect them returning back to advertising in 2009. It is expected that these banks will launch consumer products in the second quarter of this year.
A dangerous situation could arise if the banks were to adopt a go-stop-go approach to advertising in order to save the cost. It has already been seen that banks are focusing on BTL advertising (Below the line), which is more lasting then the print and electronic. You could see billboards, hoarding, bridge branding in your city. All these are mostly giving you a message of banks.
On 7th avenue and 9th avenue and Islamabad Expressway, there are more then 20 hoardings and bridge brandings, offering banking products and services. BTL is also not cost affective, but this mode is more lasting and easy. In general, a bridge branding cost 1 million for a year while hoarding has an estimated cost of 10 to 30 million on main Murree road and Islamabad Expressway (formerly Islamabad Highway). This cost varies from place to place. If any hoarding is at the most important and central place, its cost will be higher accordingly.
Some sources are sure that National Bank of Pakistan will launch a massive media campaign during May and June to show some economic stability and good performance of the present government.
So, be happy that the transitional period for this government is over now. The market and businesses will once again move ahead not in a big way but a slowly and gradually.
The good news is that we have seen too bad situation already and now is the time to move ahead. With new administration in the US, the world economic situation will be changed gradually and business will be gearing again the world over. These will definitely push the advertising in this part of the world as well.