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Indian Advertising Industry – An Overview

Indian advertising industry is well recognized all over the world for its creative output and high quality advertisements. The performance of Indian agencies and advertisement & marketing campaigns has been well noted and awarded at various global stages such as Cannes Lions. The industry is continually evolving to give better returns to clients and memorable ads for the target audience. Who doesn’t remember advertisements such as Surf’s Lalitaji, or the old Maggi Noodles jingle? Does the name Karen Lunel ring a bell for you? If it doesn’t, the original waterfall girl in the Liril soap certainly will! Such is the power of Indian advertisement – that these ads have become true legends, and will remain etched in the minds of viewers and readers for a long, long time. The Indian advertising industry has also given such worthies as Alyque Padamsee (the man behind Lalitaji and Liril campaigns) and Piyush Pandey ( the man behind the original ‘Mile Sur Mera Tumhara’ and Cadbury’s Dairy Milk chocolate ads).

Indian Advertising Industry

What the Indian ad industry has managed to achieve become more significant if you realize the challenges before it. The industry caters to a really huge populace, though the real challenge lies in addressing the stunning diversity. The ads have to cater to the different tastes and preferences of hundreds of languages, dozens of religions, diversity of regions, age groups and castes, and churn out advertisements that appeal to ALL of them, without offending ANY of them! Perhaps it is because of this reason that India oriented campaigns of even giant MNCs are handled separately by India based agencies, and have largely localized content.

The Indian market is also unique in the sense that TV advertising is actually increasing and set to overtake print advertisements over the coming years. Leading ad planners believe that the Indian audience still loves watching TV, and is very receptive to TV ads. In addition, the TV ads are very audio visual in nature, and can easily overcome any barriers of illiteracy, which is a major impediment for print advertising and marketing in India.

Another notable trend on a global level, that still evades the Indian advertising industry is the mass migration of ad spending to online and digital media. In highly developed ad markets such as US and UK, the ad spending on digital and online media has increased exponentially, and has actually exceeded ad spending on print advertising. Now, online ad spending constitutes almost 15% of overall ad spending in these markets. In India, online advertisements are still to take off. This trend will continue for at least the medium term, unless something on the lines on the mobile phone revolution happens, and more Indian get access to reliable internet access.

Indian Advertising Industry – Facts and Figures

  • The turnover of Indian ad industry is less than 1% of the national GDP of India. In contrast, the share of US ad industry in national GDP of USA is 2.3%. This indicates a tremendous growth potential for the Indian advertisement and marketing industry.
  • The Indian ad industry is still evolving, as far as the scale of operations and scope are concerned. The global ad industry turnover is close to USD 450 billion annually, while India contributes less than 1.5 % of that figure. However, Indian ad industry is one of the fastest growing all over the world, perhaps next only to China and Russia.
  • The global ad industry is expected to clock a growth of about 2% in 2010, which is a major recovery over 2009. The Indian ad industry, in contrast, will grow by an estimated 10% to reach a figure of about Rs 23,700 crores. The major growth factors for 2010 will be the increase in ad spends focused on events such as IPL and football World Cup.
  • In 2009, the Indian ad industry had suffered a major setback, and had shrunk, primarily due to a drastic decrease in print advertising spending – which suffered a massive cut of Rs 2,000 crores.
  • The leading advertisement medium are newspapers and television, with an almost equal share totaling 75% of the total pie. Magazine advertising constitutes a very small 3%, while online and digital advertising spend is substantially less than 1% of the total ad industry turnover. Nevertheless, the spending on digital and online advertisements is increasing at a fast rate of 25%.
  • In addition to print and television, the other popular advertisement and marketing media are radio, cable TV, direct mail and outdoor advertisements and publicity.
  • The biggest ad spenders are FMCG companies such as Unilever, P&G, ITC and Pepsico and automotive companies such as Maruti and Hero Honda. These companies have huge ad budgets running into hundreds of crores of rupees, and therefore, wield tremendous bargaining power over their ad agencies.
  • The biggest ad agencies in India are the subsidiaries and arms of their foreign principals, such as Ogilvy, JWT and Lowe. Very few indigenous ad agencies have managed to make a mark, and most of them have been acquired or merged by foreign ad agencies.
  • The emerging advertisement and marketing media in India are mobile advertisements, internet, direct calling (especially for financial services) and FM radio (for local businesses).

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  1. never thought about our Ad industry in such a manner…1% of GDP and it can grow to 2% …Huaaaahhh More ads coming our way