Advertising and Marketing Industry in India

Last Updated: November 2013 Introduction The chances of achieving objectives and goals are greater when a company has an effective marketing strategy in place. Though there is always room for traditional strategies such as targeting the audience through television or radio, the modern consumer is progressively using other methods (the Internet, mobile phones, etc.) to access information. Here, social media marketing is vital, especially in a country like India which is one of the youngest in the world demographically and has a growing broadband market. It is not far-fetched to suggest that marketing strategies are the blood line of any business and that a companys long-term goals are dependent on their efficacy. Marketing Industry Dynamics Marketers in India typically utilize television, print and the Internet for marketing their offerings. Some key figures related to these sub-segments are given below:

The Indian media and entertainment (M&E) industry grew from Rs 728 billion (US$ 11.74 billion) in 2011 to Rs 820 billion (US$ 13.22 billion) in 2012, a growth of 12.6 per cent. Total advertising expenditure (AdEx) across the media sector stood at Rs 327.4 billion (US$ 5.28 billion) in 2012, while advertising revenues grew by 9 per cent. Print continued to dominate, accounting for 46 per cent of the advertising revenue at Rs 150 billion (US$ 2.42 billion). Television led in the M&E industry while new media segments (like animation/VFX) and Films and Music segments also recorded discernible growth. Radio is projected to record a compounded annual growth rate (CAGR) of 16.6 per cent in the period 201217, post the roll out of Phase 3 licensing.

Advertising and Media & Entertainment Industry The Indian M&E industry is expected to grow 11.8 per cent to garner revenues worth Rs 91,700 crore (US$ 14.79 billion) in 2013, according to an industry report. Traditional media such as television, print and radio continue to dominate. However, other segments such as animation, visual effects, films and music are quickly gaining acceptance due to their content and the advantages of digitization. Conventional media such as television and newspapers remain the masses preferred source for information and entertainment; they account for over four-fifths of the advertising revenue. However, the Internet has gradually been increasing its share in the advertising pie. Spends on digital media hovered just above 1 per cent of the total advertising expenditure in 2005; in 2012, it stood at a respectable 7 per cent. Search advertising catered for about 38 per cent (Rs 850 crore [US$ 137.14 million]) of the total online advertising spend while display advertising formed a significant 29 per cent (Rs

662 crore [US$ 106.86 million]) by March 2013, according to the findings of Digital Advertising in India report conducted by the Internet and Mobile Association of India (IAMAI) and IMRB International. Advertisements on mobile phones and tablets have increased from a 7 per cent share in FY 201112 to 10 per cent of the online advertisement market in FY 201213, which amounts to expenditure of around Rs 230 crore (US$ 37.17 million). Social media, email and video advertising comprise 13 per cent, 3 per cent and 7 per cent of the online advertising market, respectively.

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Overview The Media & Entertainment Industry in India is expected to reach Rs 1,457 billion by 2016 as per the FICCI-KPMG report. The industry achieved a growth of 12% in 2011 and is projected to grow at a CAGR of 15 percent over the next five years. The spends on leisure and entertainment are greater than the economic growth, this is a result of favourable demographics and increasing disposable incomes. The Indian Media & Entertainment (M&E) sector is growing rapidly, especially with new age technology and the rapid rise of digital media. Digital media includes cable digitisation, wireless broadband, direct-to-home (DTH), digitisation of film distribution and internet usage. Some of the key factors that have driven the growth of the M&E industry are: rise in digital content consumption, launch of innovative content delivery platforms, higher penetration in tier II and tier III cities, greater reach of regional media and regulatory shifts. Key players The media industry can be categorized into the following categories; films, television, music, radio and print. Television remains the dominant medium in this sector. However new media as animation & VFX, digital advertising, and gaming - are fast grabbing a larger share of the market. Radio is estimated to continue at a good growth rate. Print, though on a decline in terms of growth rate, continues to be the second largest medium of this industry. Also, the film industry has witnessed multiple movies go beyond the Rs 100 crore mark in domestic theatrical collections, and Rs 30 crore mark in Cable & Satellite rights. Advertising spends across media amounted to Rs 300 billion in 2011, which was 41 percent of the M&E industrys revenues. Advertising revenues saw a growth of 13 percent in 2011, versus 17 percent witnessed in 2010. Television Valued at Rs 329 billion (US$ 5.76 billion) in 2011, the television (TV) industry is expected to expand at a compounded annual growth rate (CAGR) of 17 per cent through 2011-16 to touch Rs 735 billion (US$ 13 billion), according to report by FICCI-KPMG. Radio The radio industry with around 36 FM radio operators, is estimated at Rs 1,200 crore (US$ 210 million). The Government plans to increase number of private FM radio channels to around 839, from the present 245, through e-auctions starting Dec 2012 over next three years. This plan would cover 227 cities with population of over 0.1 million.

All India Radio (AIR) proposes to set up 385 new FM transmitters, under the Twelfth Plan, so as to provide FM coverage to 90 per cent of the population. Currently AIR reaches out to about 41per cent of the population. Digitisation Flourishing DTH, cable digitisation and launch of new digital platforms for content delivery have completely changed the face of media distribution over the last 5 years. These media along with other online platforms have made digital advertising a major player in the market. Digital advertising is expected to grow at a CAGR of 30 per cent during 2011-16. Print Print media is being driven mainly by growth in the regional markets, with an increasing literacy rate in this market. An estimated growth of 10 per cent is anticipated till 2015. In conclusion: Many aspire to join this industry due to the high visibility and glamour associated with many of the top jobs. The opportunities are many and varied, such as in the areas of mass communication, content development, animation, production and event management.

INDIAN ADVERTISING INDUSTRY

Size of the INDUSTRY

Television Current size: Rs 148 billion Projected size by 2010: Rs 427 billion; CAGR: 24% Filmed entertainment :Current size: Rs 68 billion :Projected size by 2010: Rs 153 billion; CAGR: 18% Print Media:Current size: Rs 109 billion :Projected size by 2010: Rs 195 billion; CAGR: 12%

Geographical distribution Output per annum Market Capitalization

All the major cities in India The Indian advertising industry is expected to grow by 13 %in 2010 to Rs 21,145 crore. Market cap of around $5 billion

History Advertising is one of the key activities for potential business and is equally important as producing something using raw material, or as capital, manpower, planning, organizing etc. products or services. Publicizing that the business offers to the targeted customers is called advertising which forms the integral part of marketing, and an essential precondition for selling. Advertising is done with vast population and requires organizing and applying human skill and talent and technology backed media.

Advertising companies use multifaceted talents and ideas to carry out successful campaigns. With huge innovative development of electronic media, advertising has grown as an organized industry, offering a lot of employment opportunities. Indian Advertising Industry has been reshaped by regulatory and technological changes over the past times as before it did not have many opportunities. With the advent of radio, TV, Print and outdoor it has been able to gain much potential. The development involved the deregulation of FM radio, Direct to Home broadband, the implementation of conditional access system (CAS) and foreign direct investment has made the industry much faster than before. Indian Adversiting industry is increasingly attracting the attention of many foreign Companies and communication agencies, by opening business avenues for the small and medium marketing agencies in India. After facing rugged recession, the Indian advertising industry must now begin to look at ways and means to rejuvenate its sagging market share, according to industry experts.After growing at nearly 20 per cent year on year for five years, the advertising market dipped in 2009 by as much as 10%. Just 0.4% of GDP is contributed by advertising market. Its time to grow now and make up for the lost time with sharp strategies and plans to develop brands, markets, creativity, media markets and research according to researchers.

Brief introduction

Indian advertising industry is talking business today and 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 a short span of time has carved a niche for itself and placed itself on the global map.
Indian advertising Industry which has an estimated value of Rs.13, 200-crore 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 of 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. In the year 2009 the industries attrition rate is as high as 20-25 % which was sober in that sense. According to industry executives the attrition rate is below 5 %, implying that most had to stay put and deliver on their briefs in their respective agencies.

The ads shown to us are sometimes innovative and sometimes they really get on your nerves, especially when they are repeated time and again and especially when they are repeated twice. This happens when there is something sponsored by them say a tennis match or an award ceremony, etc. Advertisements usually amaze people with their creativity and presentation whereas some are really horrible in the depiction of their ideas. Most of the times however we find quite interesting and appealing ads. The Indian ad agencies have some of the most creative and talented people around which is attested by the fact that global companies are approaching Indian ad agencies to handle their media campaigns.

Market capitalization
At the last Cannes Awards, the president of the Jury was Piyush Pandey, Group President and National Creative Director of Ogilvy and Mather conveyed that India, is quickly becoming a viable online advertising center. There is expectation that the online advertising market in India to heat up. As Lionel Lim, Sun's VP and MD (Asia South), recently stated, "Over the next three to four years, we want to help create up to 100 dot-com companies in India, each with a market cap of around $10 billion. That is, perhaps, the biggest investment we can make in this country.

Size of the industry

The size of Indian Advertising Industry depends on the following factors and industries.

Television Current size: Rs 148 billion Projected size by 2010: Rs 427 billion; CAGR: 24% Filmed entertainment :Current size: Rs 68 billion :Projected size by 2010: Rs 153 billion; CAGR: 18% Print Media: Current size: Rs 109 billion :Projected size by 2010: Rs 195 billion; CAGR: 12% Radio: Current size: Rs 3 billion: Projected size by 2010: Rs 12 billion; CAGR: 32%. Music Current size: Rs 7,000 million crore projected size by 2010: Rs 7,400 million; CAGR: 1%. Live entertainment :Current size: Rs 8,000 million, Projected size by 2010: Rs 18,000 million; CAGR: 18% Out-of-home Advertising: Current size: 9000 million, Projected size by 2010: 17,500 million; CAGR: 14%. Internet Advertising: Current size: Rs 1.6 Billion, Projected size by 2010: Rs 7.5 billion; CAGR: 50%.

Total contribution to the economy/ sales

The turnover of Indian Advertising Industry is less than 1% of the national GDP of the country as compared to 2.3% of share of US to the GDP which indicates the tremendous growth potential for India. The Indian advertising industry is expected to grow by 13 %in 2010 to Rs 21,145 crore. According to the PITCH-Madison Media Advertising Outlook 2010 analysis, the Indian advertising pie is expected to be worth about Rs 21,145 crore this year, a 13 % increase over the previous one. The Indian media and advertising industry clocked a size of Rs 18,670 crore in 2009 and that saw a dramatic drop of 10 percentage points compared to 2008, where the industry was worth Rs 20,717 crore.Total advertising market grew 17% in 2008 and is projected to increase.

Top leading Companies

Ogilvy and Mather J Walter Thompson India Mudra Communication Pvt. Ltd FCB-Ulka Advertising Ltd Rediffusion-DY&R McCann-Erickson India Ltd RK Swamy/BBDO Advertising Ltd Grey Worldwide (I) Pvt. Ltd Leo Burnett India Pvt. Ltd Contract Advertising India Ltd

Employment opportunities
There are tremendous opportunities in Indian Advertising Industries in the country and abroad. The opportunities include that of account planner, executive, copywriter, visualizer, creative art director, animator, multimedia expert, photographer, printer, TV producer, media planner, web developer jobs, web planner, and marketing professional. Candidates qualified in Commercial Art have great opportunities. MBAs can also play a significant role in client servicing. However, individual creativity and ability for innovation are more important than academic degrees. The advertising industry always has a perennial demand of talent.

Latest developments
The global Advertising Industry as far as scale of operations and scope is concerned the

turnover is close to USD 450 billion annually. Indian Advertising Industry contributes less than 1.5% which is next to China and Russia. The Global Ad Industry is expected to reach a growth rate of 2% in 2010 which is better than 2009 while Indian Ad Industry in contrast estimates to reach the growth rate of 10% figuring about Rs.23700 crores. The reasons are because of the IPL, Foot ball World Cup and the Commonwealth Games. India contributes to 17 % of the world population but is only 0.7% of the world advertising market so it has huge potential to grow in future. Experts reveal that total advertisement spending by the political parties would be around Rs 800 crore. The Congress and the BJP alone could spend over Rs 400 crore on ads on television, radio and newspapers. Most of the ads appear on going to general entertainment and regional TV channels and hardly a small proportion in News channels. Worldwide Partne rInc are the Ninth largest global network of more than 90 marketing and communiation agencies in about 50 countries which has recently tied up with Indian Pressman Advertising and Marketing Ltd following repeated enquires about India . Indian advertising spends as a percentage of GDP -- at 0.34% which is comparatively low, as opposed to other developed and developing countries, where the average is around 0.98%, which requires a lot space for development and enhancements in the Indian Advertising Industry.