The global economy has shrunk alarmingly with the spread of COVID-19 and the ensuing lockdowns and other restrictions imposed to rein in the deadly virus disease. Although no broad study has been conducted yet to know about the extent of the damage caused by the pandemic to Nepal's economy, the virus disease has battered the economy significantly. Millions of people have lost their jobs to the pandemic. As the government has recently lifted the four-month-long nationwide lockdown, the country's economic sector is now struggling hard to get back on track. However, there are still high chances of the number of virus infections being surged as the pandemic is yet to be brought under control. Several countries have gone for re-imposing lockdowns in certain areas after the re-emergence of the virus.
The COVID-19 pandemic has messed up the entire production system as well as supply chains across the nation. This has caused a huge loss to the country's advertising business as well. According to a news report carried by this daily on Sunday, the country's advertising industry alone has incurred a loss of Rs. 6 billion since the lockdown was enforced in the country on March 24. Representatives of the Advertising Association of Nepal (AAN) estimate that Nepal's total advertising market value has exceeded Rs. 12 billion. This amount covers both the mass media and signage. The advertising sector has lost about 50 per cent of its total annual revenue due to the pandemic. The four-month-long lockdown has affected as much as 80 per cent of the total advertising business. This is really a grave scenario. The advertising spending from the private sector as well as government agencies has fallen sharply during the period. The advertising business declined by about 20 per cent in the initial months of the lockdown. And it is unlikely to change the course any time soon. Advertisement agents say that the trend may continue until the Dashain festival.
Although advertising is just created for the general masses, it is a lifeline for the media industry. Advertisements work as a link between the producers and the general customers. Since most of industries and businesses remained closed for a long period due to the lockdown, manufacturers and producers were forced to suspend their promotion campaigns and advertising. Considering the looming uncertainties, manufacturing companies, and businesses such as banks and financial institutions and insurance firms reduced their promotional and advertising campaigns as they had to take austerity measures for survival. The advertising budget is the first one to be slashed in such a critical situation.
Mainstream media are reported to have lost around 90 per cent of the advertisement over the past four months. The unprecedented slump in the advertisement business has not only resulted in the closure of a host of mass media channels, newspapers and magazines but also rendered many jobless. Some of the media outlets in the Kathmandu Valley alone are now continuing only with their online version. Even some big media houses have folded up their publications, especially magazines, and laid off many journalists and other staff. The signage business has also been facing a tough time. With an investment of Rs. 7 billion, the signage sector had created about 75,000 jobs. But most of the jobs in this sector have remained affected. The advertising business can revive only with the economic recovery.