Challenges in Nepal keep agencies and marketers at bay

At present, Nepal’s biggest advertising agency is JWT, the only multinational agency with a presence in the market. Other leading players include Nepal’s oldest advertising agency, Echo advertising, and the 8-year-old Outreach Nepal.

Jostled between India and China, Nepal’s economy is expected to grow 4.2 per cent in 2012. Indian multinational companies like Hindustan Unilever, Dabur, Emami and Marico are some of the biggest advertisers in the region.

The advertising industry is growing, with television recording a growth of 20 per cent in 2011 while print grew 47 per cent, according to the website of the Advertising Association of Nepal.

But reach is still limited, with just 66 per cent of the population having access to a television while 62 per cent own a radio—even as 14 new television channels and 100 FM channels have cropped up in the last five years. There are frequent disruptions during the winter months when power supply is cut for 12 hours a day. Print’s penetration is even less, at 34 per cent owing to low literacy rates. Digital media is still in its infancy.

As a result, companies aren’t investing very much toward advertising and marketing in the region. Joydep Chakravarty, JWT’s managing director in Nepal, estimates that multinational companies spend just 5 per cent of revenue on advertising while local companies are known to spend about 10 per cent. Globally, multinational companies spend anywhere between 12 and 15 per cent on advertising, on average.

“The moderate reach of traditional media coupled with low quality media content means it becomes expensive to have sustained marketing programs, thus affecting brand-building activities,” Chakravarty said.

According to Chakravarty, the lack of trained marketing professionals poses another challenge, with much of the population involved in family businesses and trading. "Today, there is a growing realization that brand-building and advertising is an investment," he said. "However, trained professional manpower still remains a major challenge." 

Ujaya Shakaya, founder and managing director of Outreach Nepal, agrees: “We’re still in an era of art directors and copy writers."

As such, creative agencies typically double up as media agencies too. On top of that, there are no media monitoring and measurement agencies. Measurement firms like Peoplemeter and the audit bureau of circulation are conspicuous by their absence. Market research company Nielsen does a handful of syndicated media studies that marketers use. But apart from that, worthwhile media databases don't exist, according to marketers. JWT, for instance, relies on its own proprietary database for planning purposes.

“There is no scientific research firm in Nepal who can carry out a survey and come back with coherent and meaningful insights,” said Budhaditya Mukherjee, country director of Asian Paints. “Hence, a lot of time, strategies are created based on intuition or basing it on a limited stakeholder’s opinion.”

Image Credit: Adrian Sulc, used under a Creative Commons Attribution 3.0 license.