Indian advertising industry
There have always been power struggles in the advertising and promotion industry: brand versus brand; one agency against another agency; agency versus Media Company; big advertiser with lots of money versus big retailer with lots of money. But those old-style power struggles were child’s play compared with the 21st century power struggle going on now. Consumers are tired of the barrage of ads and are looking for ways to avoid most of them. So, the big power struggle now is about how the advertising industry can successfully adapt to the new technologies that consumers are willing and, in fact eager to use to gain more control over their information environment. Stated more directly, how can the ad industry overcome the fact that none of us is eager to have a 30- second television ad interrupt a television program we are really enjoying? So consumers, who have been the target of advertising and promotion for decades, are discovering technologies and media options that give them more control over the communications they see and hear. Change in the advertising industry is nothing new but the pace of change and the complexity of the change is more challenging than any the industry has ever faced. Overview of Advertising Industry in India The structure of the advertising industry in Asia Pacific has been affected by globalisation and international alignments creating a smaller number of very large agencies and the growth of independent major media buying houses. Very sophisticated software optimization and planning systems are now integral to the industry, enabling agencies to offer a unique positioning in the market place to attract new business. American companies are discovering the appeal of marketing their products in India. With a population of approximately one billion, and a middle class that's larger than the total population of the United States, there's definitely money to be made. Local retailers in apparel, food, watches and jewellery have all increased their average ad spending by almost 50% in the past two years. Coupled with many other local players big retailing brands are spending to the tune of Rs 12,000 crores annually on advertising and promotional activities. This figure, according to industry estimates, was less than Rs 400 crores about 3 years ago, which means the growth has been a whopping 40%. The local firms are using all the available advertising tools from electronic to print, outdoor advertising and even models. The advertising and promotional spending by local brands is substantial during the festival season AIET, Mijar Page 1
The Current Indian Advertising Industry and almost 70% of the spending is done between September to January. The advertising industry in India is growing at an average rate of 10-12% per annum. Over 80% of the business is from Mumbai and Delhi followed by Bangalore and Chennai. The Indian advertising industry is talking business today. It has evolved from being a small-scale business to a full-fledged industry. It has emerged as one of the major industries and tertiary sectors and has broadened its horizons be it the creative aspect, the capital employed or the number of personnel involved. Indian advertising industry in very little time has carved a niche for itself and placed itself on the global map. Indian advertising industry with an estimated value of 13,200 crores has made jaws drop and set eyeballs gazing with some astonishing pieces of work that it has given in the recent past. The creative minds that the Indian advertising industry incorporates have come up with some mind-boggling concepts and work that can be termed as masterpieces in the field of advertising. Advertising agencies in the country too have taken a leap. They have come a long way from being small and medium sized industries to becoming well known brands in the business. Mudra, Ogilvy and Mathew (O&M), Mccann Ericsonn, Rediffussion, Leo Burnett are some of the top agencies of the country. Indian economy is on a boom and the market is on a continuous trail of expansion. With the market gaining grounds Indian advertising has every reason to celebrate. Businesses are looking up to advertising as a tool to cash in on lucrative business opportunities. Growth in business has lead to a consecutive boom in the advertising industry as well. The Indian advertising today handles both national and international projects. This is primarily because of the reason that the industry offers a host of functions to its clients that include everything from start to finish that include client servicing, media planning, media buying, creative conceptualization, pre and post campaign analysis, market research, marketing, branding, and public relation services. Keeping in mind the current pace at which the Indian advertising industry is moving the industry is expected to witness a major boom in the times ahead. If the experts are to be believed then the industry in the coming times will form a major contribution to the GDP. AIET, Mijar Page 2
The Current Indian Advertising Industry With al this there is definitely no looking back for the Indian advertising industry that is all set to win accolades from the world over. Trends affecting the Advertising industry Often advertisers struggle with whether to use traditional mass media, like television and radio, that have wide reach or whether they should use newer, highly targeted media like personalized e-mail, Web films, podcasting or other forms of promotion. But in the end what is important is not the web and new opportunities to communicate that technology has to offer, but rather the critical need to focus on the brand, its image, and a persuasive, integrated presentation of that brand to the target market. It might be the web, it might not be. It might be television, it might not be. The point is that the right medium needs to be to achieve the right persuasive impact. Some of them are:•
The “Undoing of Agency Consolidation and Globalisation-or Not? Media Proliferation, Consolidation and “Multiplatform” Media Organizations. Media Clutter and Fragmentation. Consumer Control: From Blogs to TiVo.
Indian advertising industry looks forward to 2010
Indian advertising honchos remain bullish about 2010. The signs of an economic recovery, which many are seeing, has instilled a sense of hope in them with expectations that spend levels in the new year will be better than what they were in the current year.
How tough was 2009 for the Rs 32,000 crores domestic advertising industry can gauged from the fact that growth in this calendar year has been pegged at just about 2-3 per cent vis-à-vis last year’s, which was over 15 per cent. The year before, the industry grew at over 20 per cent. So the come down in spend levels this year has been significant, according to industry honchos. “The year was tough, there’s no doubt about it,” says Colvyn Harris, chief executive AIET, Mijar Page 3
The Current Indian Advertising Industry officer, JWT India. “Most agencies were under a lot of pressure on account of the distress their clients were undergoing. This did take its toll.” On the whole, most agencies adopted stringent measures to rein in costs, even as they looked for avenues of growth in 2009. As Madhukar Kamath, managing director & chief executive officer, Mudra Communications, explains: “It was an interesting year. On the one hand, the focus on growth had to be there. On the other, reducing costs was also uppermost on our minds. Many were walking a tightrope, trying to balance the two.” In the face of poor mainstream advertising for much of the year from categories such as real estate, financial services, travel & tourism, etc, agencies were left with no choice but to prune costs somehow. “Many, for instance, deferred hiring people. Most did not give increments this year,” says Sharma of Leo Burnett. For an industry whose attrition rate is as high as 20-25 per cent, 2009 was sober in that sense. The attrition rate, according to industry executives, was below 5 per cent, implying that most had to stay put and deliver on their briefs in their respective agencies. “That was a good sign, if you ask me,” says Sharma. “Job-hopping doesn’t allow you to be consistent. It is a loss, both for the individual and the agency. This year, people were left with no option but to stay where they were. At least that brought some consistency to their work. Agencies clearly benefited from all this. There were some good advertising works to show.” Rightly so. The year did throw up some creative surprises. Like Ogilvy & Mather’s Zoozoos for Vodafone, Lowe Lintas’ ‘Jaago Re’ campaign and ‘Walk When You Talk’ for Tata Tea and Idea Cellular respectively, and JWT’s work for Birla Sun Life Insurance — consumers clearly had a lot to choose from this year. Agency honchos expect the creatives juices to flow into the new year as well, with categories such as telecom and FMCG — big spenders in 2009 — leading the charge in 2010 too. Advertising Industry Firms in the advertising and public relations services industry prepare advertisements for other companies and organisations and design campaigns to promote the interests and image of their clients. This industry also includes media representatives-firms that sell advertising space for publications, radio, television, and the Internet; display advertisers-businesses AIET, Mijar Page 4
The Current Indian Advertising Industry engaged in creating and designing public display ads for use in shopping malls, on billboards, or in similar media; and direct mail advertisers. A firm that purchases advertising time (or space) from media outlets, thereafter reselling it to advertising agencies or individual companies directly, is considered a media buying agency. Most advertising firms specialize in a particular market niche. Some companies produce and solicit outdoor advertising, such as billboards and electric displays. Others place ads in buses, subways, taxis, airports, and bus terminals. A small number of firms produce aerial advertising, while others distribute circulars, handbills, and free samples. Groups within agencies have been created to serve their clients’ electronic advertising needs on the Internet. Online advertisements link users to a company or product’s Web site, where information such as new product announcements, contests, and product catalogue appears, and from which purchases Online Ad Spending in India Online advertising spending is holding its own and will continue to grow steadily over the next several years. Marketers are responding to the economic challenges with new techniques and strategies, along with research data to prove their effectiveness. According to statistics, online ad spending has reached $23 billion. Nonetheless, nearly three-quarters of web advertising space goes unsold and more than 99.7 per cent of banner ads are not clicked on. may be made.
Scope of Advertising Industry in India The advertising industry in India has several competitive advantages:
India has a rich pool of strategic planning, creative and media services personnel: Indeed, Indian advertising industry has been exporting senior-level talent to many countries, particularly to the Gulf, South-East Asia, China, the UK and the US. Indian talent is recognized and respected in global agency networks.
No other country has access to so many trained management graduates who can provide strategic inputs for brand and media planning. Indians are multicultural: we learn at least two languages and that gives us a head start in understanding cultural diversity.
The Current Indian Advertising Industry
Most of the top 20 agencies in India have a global partner or owner, which should provide an immediate link to global markets. Our production standards in TV and print have improved: With a vibrant animation software industry, we have access to this area of TV production. India's advanced IT capabilities can be used to develop Web-based communication packages for global clients.
The Indian advertising industry is a very upcoming and promising sector. However there is severe competition and survival is for the fittest and the best. In this sector what matters the most is knowledge and experience of the work and the industry and its functioning. The more the knowledge you can provide the better the productivity you give. Exchange4media is an ad agency that has the knowledge as well as experience that will be a big benefit in making your ad campaigns run successfully. Learning from the Indian Advertising Industry and the latest survey
1. Total advertising market grew 17% in 2008 and is projected to increase 2% in
2009. While the growth projection may sound depressing, these numbers serve as a good benchmark. Also, could a lower growth in advertising mean that corporates will increase their focus on PR.
2. Print Media continues to dominate with 47% share. It may have lost 1% share
compared to 2007 but its still strong. Same is the case in the PR Industry where maximum efforts are made in the Print Media program execution.
3. Internet vs Television: While it is expected that Internet spending will overtake
television spend globally, the situation in India is and will continue to be very different. TV had a 41% share in 2008 compared to 1.7% for internet. Thus, in the Indian advertising world internet is still not a very important media. In the Indian PR world however, the importance given to internet focused programs will certainly be much much higher in 2009. Because apart from reaching the target audience, discussions on internet have a spiraling effect as they may form an input for the stories featured in the traditional print media and television.
The Current Indian Advertising Industry Role Of Advertising Agencies In The 21st Century In the beginning of the 21st century Advertising Agencies are playing a very important role in the business of advertising. A lot of water has flown past the Ganges during the last 5 decade since the foundation of the first professional agency in India in 1950's by JW Thompson & DJ Keeymer. Gone are those days when advertising agencies were only playing a vital role in Planning the campaign for their clients, preparing the campaign and placing it in suitable media on behalf of their clients. In today's competitive situation it is evident that reputed ad agencies are not restricting themselves to the above services but are also willing to offer something extra to their clients in the areas of marketing research, Sales promotion & Merchandising activities and Public Relation oriented services.
National and reputed Advertising Agencies are increasingly going for 360 degree approach in their com audience effectively and efficiently. Reputed agencies like O and M, Mudra Communications, JWT strategy to reach the target audience. With the passage of time along with the concept of 'FULL SERVICE AGENCY', specialized MEDIA AGENCIES like, Madison; Carat etc. have come up to take care of the client's special media requirements. We also see CREATIVE BOUTIQUES like Aloke Nanda Communications, Vyas G Creative etc. just offering creative service to their clients. Advertising Agencies being prime facilitator in the business of advertising have rightly understood the need of the hour and are playing a key role in the business of Advertising. Online Advertising Market in India is expected to Cross $219 Million By 2011 Bubble of ‘Dot Com’ seems to be blowing again and, this time, in a much comprehensive manner. Social Media, E-commerce, Cloud computing and Dot Com acquisitions are surging like never before. Online Advertising Market is no exception and holding promising business scenarios for amid marketers who are yet to freeze the future initiatives on online advertising. Online Advertising Market is expected to reach $220 Million by the 2011 in India as advertisers and marketers both are gaining filtered and significant ROI from such marketing AIET, Mijar Page 7
prepared to walk the extra yard to understand their client's business in a better manner in order to commu
treated as 'PARTNERS' in their client's business and are always trying to suggest the best and cost effe
The Current Indian Advertising Industry mix. As per the latest report, published by “Internet And Mobile Association of India”, some of the biggest industry veterans like BFSI, Retail and FMGC are biggest online spenders ( in India) and going to remain so. Though, FMGC is relatively new to online marketing industry but with the phenomenal growth in 2010 this industry is expected to increase its charm towards online spending in next couple of years. Education industry can be another valuable contributor as it’s witnessing major transformation from last couple of years in India. Interestingly, while segregating Online Advertising Market in Display & Text ads, a constant decline has been recorded in market share of Display Ads against Text as biggest advertisers like BFSI continue to repel from Display Ads ( from 25% in 2008 to 17% in 2009 and 13% in 2010). However, such trend may not continue by next year. As new advertisers like FMCG and Education sectors are banking big on Display ads, 2011 is going to witness 28% growth in display ads compare to 26% growth of text ads.
Report also showcases the comparison & future of Social media marketing, email marketing and other marketing ( Search engine, Banners, SEM, SEO). Apparently Social media is going AIET, Mijar Page 8
The Current Indian Advertising Industry to be the biggest gainer of Online marketing in 2011 with estimated 17% market share compare to 11% last year. Others and Email Marketing are subsidizing the growth of social media as they may witness decline in market share to 77% and 6% subsequently compare to 82% and 7% last year. The major contributor and investor in Online Advertising is going to remain long standing BFSI Industry. Though BFSI is leaning towards text ads compare to display, still the major chunk- 39% of online advertising market share- is going to come from BFSI.
Travel, Auto, online publishing, IT Industry, Telecom, FMCG, consumer durable and Education Industries are few other major contributors of 2011 online advertising market share. However, apparently all of them are having more confidence in Display Ads than Text Ads. Overall with, with the micro level situation in India also upbeat, companies are much more confidence and committed towards online advertisement spending in next year. With the phenomenal growth of social media, internet and education exposure in India, business advertisers are gearing up to next version of their business marketing module with the help of online advertisement. Certainly this will boost up the confidence of publishers and marketers in India. AIET, Mijar Page 9
The Current Indian Advertising Industry The Changing Face of Advertising Industry In India When the world renowned ice-cream brand Haagen Dazs announced that Indian passport holders are not allowed to enter its outlet in one of the places in Delhi, a huge furore followed. Raised eye-brows demanding explanations regarding this openly discriminating and insulting restriction were met with apologetic clarifications from the company saying it was merely a strategy for brand promotion. Whether or not it was a promotion tactic, it managed to engrave in the minds of the media and the public what Haagen Dazs was. This is one of the countless examples that can be cited to bring forth the changing face of the advertising industry of India. From huge billboards and hoardings to irresistibly alluring offers – the advertising world has fast fine-tuned itself to appeal to the representatives of the changing face of modern India. From a modest beginning of a few lines spoken on the radio to the flashy world of internetthe advertising world has come a long way. Initially, when the deodorant brand Rexona stepped into the Indian economy, it was faced with a mind-boggling problem of not being able to reach the youth through newspaper and television advertisements. This problem was extensively thought over and after a number a surveys the conclusion reached was to advertise about deodorants on sites which encounter heavy traffic. It was suggested that the target customers were more likely to be internet surfers than television viewers. The idea, earlier thought to be ridiculous, worked wonders for the company and was one of the most instrumental steps in helping the company create a consumer base in India. The newest transformation observed in the world of advertising is how it is aligning itself to draw the attention of the youth towards the brands. The advertisements are designed such that the youth identify with the brand and relate instantaneously to it. Blackberry- one of the leading mobile companies has lately been trying to change its public image from being a phone for use by office-goers to a phone for everyone’s use. The tag-line clearly states- “Not just for the office boys”. The Cadbury advertisements which were earlier targeting the general audience have now shifted gaze and are keenly concentrating on the young. The most recent commercial shows an exchange between a young boy and girl over the chocolate. These newcomers replaced the
The Current Indian Advertising Industry Indian superstar Amitabh Bachan in these ads- and THAT goes to say a lot about what the companies are thinking. The sudden change in the target audience of brands is considered to be a conscious decision following data expressing that majority of Indian audience is between 16-25 years of age. The idea that India is seen to be an upcoming economy with a lot of potential is utilized by the makers in promotion of their brand. By projecting India as an imminent super-power, the brands give the consumers a feeling of being potent, sovereign and powerful. Another arena tapped upon by the advertisers is the social networking sites which are the most hyped and read about matter in these times. Facebook and Twitter are the most popular sites. On Facebook, the brands start by creating a page, “liking” which promises “exclusive gifts and goodies”. The suggestion that a simple click could win you things which you would have to think about twice before shelling out money for, is both fantastic and tempting- and thus, manages to thrive successfully. The big boss of the web world, Google, launched a ground-breaking idea for advertising- the Google Adwords. These are Pay-Per-Click advertisements. The advertiser pays only when a user clicks on the advertisement to visit the site. This adds to the inducement that an advertiser gets to endorse their products on Google- besides the fact that Google is the most popular search engine and sites registered with Google have nearly double the amount of traffic than others. In order to make the offer more charming, Google has offered to give detailed information regarding how many clicks an ‘ad’ received and how many of these got converted to actual sales. This path-breaking step by Google is all set to change the advertising world in more ways than one. Advertising has been an immensely crucial aspect of business- for what the society doesn’t see, it doesn’t buy. The advertising world has always been extremely dynamic and everevolving, but with the re-vamping of advertisements as per the economic situation of the country guarantees it to be more vibrant and vivacious than ever before.
India’s ad industry to grow 11% in 2011: study
India will outperform most markets in 2011, key growth to come from the mobile domain says Zenith Optimedia AIET, Mijar Page 11
The Current Indian Advertising Industry Mumbai: A new study by media agency Zenith Optimedia, part of the French advertising conglomerate Publics Group SA, has forecast 11% growth for India’s advertising industry for this year. The survey said the Indian economy withstood the test of global slump and grew at 6-7% in 2010. However, the advertising market reacted sharply to the downturn and grew only at 1% during the year. But recovery has been swift and India’s advertising industry will outperform most other markets in 2011. According to Zenith Optimedia, the total ad expenditure for India is projected to touch Rs23,631.9 crore this year. In 2009, the ad expenditure was Rs21,602.5 crore.
Newspaper advertising, which grew 5% in 2009, is likely to see 7-8% annual growth this year. Rising literacy levels and better distribution in the regions are steadily improving the reach of newspapers. The survey also predicts a healthy 11-12% growth for television in India riding on the digital wave and advertising opportunities offered by the new “larger than life” entertainment formats. Sports are growing in popularity, thanks to the success of the
The Current Indian Advertising Industry Indian Premier League (IPL), and this trend is likely to continue as the country hosts the Commonwealth Games this year. The study stated that Internet advertising in India will be driven by social media. The survey pegs Internet advertising growth at an annual 25% in the coming three years. Satyajit Sen, chief executive officer, Zenith Optimedia, said most of the growth story will come from digital properties, especially those in the mobile domain. Other key contributors will be cricket and reality content apart from rising ad rates. “Print, especially English newspapers, which have suffered in revenues because of the downturn, will emerge out of it. There will be a correction,” Sen said. At least two other advertising surveys have predicted 12-13% growth for Indian advertising. A recent Pitch-Madison report said the ad industry will see 13% growth in 2010 to touch a turnover of Rs21,145 crore. R. Gowthaman, leader, mindshare, GroupM India Pvt. Ltd, said that his company projected 12% growth for India in 2010. “The global figures are almost in the same league as Zenith’s. Last year, the global advertising industry was at minus 1%. This year, the total ad expenditure is likely to grow by 1 or 2%.” According to Gowthaman, there are several factors that are contributing to growth in India. Around “6-7% of India’s ad expenditure growth comes from rate inflation alone. The rates for IPL, for instance, have gone up considerably. Also, it comes from broadcasters investing in a lot of high-cost, tent-pole programming,” he said, adding that categories that were silent in 2009 are bouncing back. This includes banks and other financial services as well as tourism. The survey said that globally the worst-hit markets are stabilizing and will return to growth in 2011. The Internet’s share of ad expenditure will rise from 12.6% in 2009 to 17.1% in 2012 globally.
Advertising Companies of India The Current Indian Advertising Industry Ad expenditure fell 23.1% in central and eastern Europe, with drops as steep as 42% in Russia, 44% in Latvia and 48% in Ukraine in 2009. Zenith forecasts a 5.7% ad spending growth in central and eastern Europe in 2010, and 8.5% in 2011. Advertising is a big business in this era in India. Indian Advertising industry has witnessed a prominent globalisation. With the inception of various divisions,the advertising industry has undergone a sea change. Indian consumer's deepening pocket and blooming markets for ad-spends have touched new heights in India. The Indian Advertising Companies are creating stories and brand experiences in a way that engages and involves. The Best Indian sites offers the names of the top Advertising Organizations In India. Here is a list of the top Indian websites and a quick glance at them will help you to get the required knowledge about the websites Top Advertising Companies of India: Ogilvy and Mather: This is one of the leading advertising company in India. This organization believes that devotion to the brand defines the profile of their company. This company has offices across the globe. The objective of the company is to build brands. I t is a subsidiary of WPP Group plc.The headquarter of the company is in NewYork. J Walter Thompson India: One of the most popular companies in the advertising industry is J Walter Thompson India. Their objective is to make advertising a part of the life of the consumers. This is also world's best advertising brand with about 200 offices in 90 countries.
Mudra Communication Pvt. Ltd: This is one of the renowned advertising company of India. This advertising organization was founded in the year 1980 at Mumbai. Recently the Ad company declared the addition of public relations,rural marketing,events etc. The head office of the company is in Bombay Area. AIET, Mijar FCB-Ulka Advertising Ltd: Page 14
One of the best company in India in the advertising arena is FCB-Ulka Advertising Ltd. In US ,this advertising company ranks third and tenth in the world having about 188 offices in