advertising industy in india

PROJECT ON ADVERTISING INDUSTRY

Group members

AEGIDIUS SAVIO MONDOL

ANUSHREE MAZUMDAR

CYRIL VICTOR

POUSALI MUKHERJEE

PRABAR RAKSHIT

RANJEET SINGH

SUMAN KUMAR DEY

SUSHMITA MUKHEREE

INTRODUCTION

In the world of rat racing competition in respect of marketing of different goods and services

market research has been an integral part of the management of any newly promoted company

to evaluate the promotional prospective in the perspective of demands to the customers in the

market. Since last couple of years, India has been marked as an area of business promotion to the

upcoming business houses catering different kinds of goods and services.

Now in order to promote their goods and services the first thing they need to do is to give

advertisements. Advertising is multidimensional. It is a form of mass communication, a powerful

marketing tool, a component of the economic system, a means of financing the mass media,

social institution, an art form, an instrument of business management, a field of employment and

a profession.Advertsing in India was pioneered by Dattaram and Company in 1905 from

Girgaon, an area in Mumbai. Advertising in 2005 completes 100 years of its existence in India. It

has shaped and has been shaped by the environment. In its long journey from the street peddlers

to its present format on TV and Internet

.

The Indian advertising industry is talking business today. It has evolved from being a small-

scale business to a full-fledged industry. It is now considered to be 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. The creative minds that the Indian advertising

industry incorporates have come up with some very innovative concepts and work that can be

considered 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.

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.

Keeping in mind the current pace at which the advertising agencies are growing 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. With all this there is definitely no looking back for the

Indian advertising industry that is all set to win accolades from the world over. In India about 40

advertising agencies are handling about 80 percent of business which stands at a staggering Rs 10,000

crore. The rest of the business is shared by about 700 advertising agencies. Indian advertising has grown to

its maturity and become very professional. The Adverting Club of Mumbai is the Mecca of Indian

Advertising, contributing about 60 percent of the total billing of the advertising industry.

The Indian advertising industry has been evolving at a fast pace over the years owing to an increase in

the forms of media and communication and the emergence of new distribution channels. Currently India

has a low advertising spend to GDP ratio compared to other economies. Competition for the outsourcing

business and creativity leakage represents the major issue and implications. However the television

advertising is expected to register high rates of growth, with India expected to become Asia’s largest cable

market by 2015.

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 2012: Rs 427 billion; CAGR: 24%

Filmed entertainment :Current size: Rs 68 billion :Projected size by 2012: Rs 153 billion; CAGR:

18%

Print Media: Current size: Rs 109 billion :Projected size by 2012: Rs 195 billion; CAGR: 12%

Radio: Current size: Rs 3 billion: Projected size by 2012: Rs 12 billion; CAGR: 32%.

Music Current size: Rs 7,000 million crore projected size by 2012: Rs 7,400 million; CAGR: 1%.

Live entertainment :Current size: Rs 8,000 million, Projected size by 2012: Rs 18,000 million;

CAGR: 18%

Out-of-home Advertising: Current size: 9000 million, Projected size by 2012: 17,500 million;

CAGR: 14%.

Internet Advertising: Current size: Rs 1.6 Billion, Projected size by 2012: Rs 7.5 billionCAGR:

50%.

However in reality

Total advertising spend across media was Rs 327.4 billion in 2012. In light of continued economic

slowdown, advertising revenues saw a growth of 9 per cent in 2012 as against 13 per cent in 2011 and 17

per cent in 2010. Print continues to be the largest beneficiary, accounting for 46 per cent of the advertising

pie at Rs 150 billion.

Industry dynamics

Marketers majorly use television, print and internet for marketing their offerings. Key statistics pertaining

to these sub-segments is enumerated below-

The Indian media and entertainment (M&E) industry grew from Rs 728 billion (US$ 11.91 billion)

in 2011 to Rs 820 billion (US$ 13.42 billion) in 2012; marking a growth of 12.6 per cent.

Total advertising expenditure (AdEx) across media stood at Rs 327.4 billion (US$ 5.36 billion) in

2012 while advertising revenues increased by 9 per cent.

Print continued to be the largest beneficiary, accounting for 46 per cent of the advertising pie at Rs

150 billion (US$ 2.45 billion).

Furthermore, television continued to be a dominant segment in the M&E industry while new media

sectors (like animation/VFX) and Films and Music segments recorded strong growth. Radio is

expected to witness great emancipation, post the roll-out of Phase 3 licensing, at a compounded

annual growth rate (CAGR) of 16.6 per cent over 2012-17.

OVERALL

INDUSTRY

SIZE ( INR

BILLION)

2007 2008 2009 2010 2011 2012

Television 211 241 257 297 341 389

Print 160 172 175 193 211 231

Film 93 104 89 83 91 98

Radio 7 8 8 10 12 15

Music 7 7 8 9 9 11

Out of

home

14 6 14 17 19 22

Animation

and VFX

14 17 20 24 28 33

Gaming 4 7 8 10 13 17

Digital

advertising

4 6 8 10 13 18

Others 516 579 587 652 738 834

Source: KPMG analysis and industry interviews [FICCI-KPMG Report 2012]

FORECASTS:

Source: afaqs! News bureau, report by Magna Global Enterprise, August 2013

Television and print will contribute over two-thirds of all ad revenues generated in India in 2015.

The advertising market in India is expected to grow by 7.8 per cent in 2015, with television and print

contributing over two-thirds of all revenue, as per Magna Global's advertising forecast.

According to the forecast, digital media will grow by 31 per cent, faster than any other category, with

mobile and video outgrowing traditional display. Television will grow by 6.6 per cent. While print's story is

still relevant in India and will continue, the newspapers category expanding in language and regional

pockets is estimated to grow 6 per cent; magazines, however, will remain flat.Radio and out of home

advertising will grow by 8 per cent in 2015. With the investment climate expected to warm up and demand

from external economies backed by solid domestic consumption, Magna forecasts the advertising revenue

to grow 11.9 per cent in 2016.

Growth prospects of Advertising Industry:

The Indian advertising Industry is one of the talking business today. It has become a full-fledged industry

from a small-scale industry. Indian advertising industry in very little time has carved a niche for itself and

placed itself on the global map.

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 of capturing the market. Growth in business has led 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.

Keeping in mind the growth of Indian advertising industry the industry is expected to witness a major

boom in the times ahead. If the experts are to believed then the industry in the coming times will form a

major contribution to the GDP.

Sources: Industry estimates and PwC analysis

MAJOR PLAYERS IN THE INDUSTRY:

OGILVY AND MATHER LIMITED

Branches: Delhi, Kolkata. Bangalore, Hyderabad, Coimbatore.

Gross income: 1258.74 million.

Major clients: SBI mutual fund, Pantaloons fashion India limited, Hindustan Unilever

Limited, UTI, ITC Limited, Tata Communications TVS Suzuki etc.

J WALTER THOMPSON INDIA

Branches: Delhi, Kolkata, Kolkata, Chennai

Gross income: 2074.3 million

Major clients: Apollo Hospital, Indian Army, Indian Navy, Star TV Network, Hero

Motor Corp, Timex Watches, Parle agro, ESPN etc.

MUDRA COMMUNICATION PRIVATE LIMITED

Branches: Ahmedabad, Delhi, Bangalore, Mumbai, Kolkata, Chennai, Cochin


Major clients: Indian Express, Godrej Foods, Indian tourism, Honda Siel Power, Hindustan

Motors Limited, Satyam Computers Service Limited etc.

FCB-ULKA ADVERTISING LIMITED

Branches: Delhi, Bangalore, Kolkata, Chennai, Cochin, Hyderabad


GREY WORLDWIDE (I) PVT LIMITED

Branches: Ahmedabad, Delhi, Bangalore, Kolkata,

Gross income: 425 million

Major clients: General Motors, Oracle India, Britannia Industries, The Hindustan Times, ITC

Foods, Philips Communications etc.

LEO BURNETT INDIA PVT LIMITED

Branches: Delhi, Bangalore, Kolkata,


Major clients: Birla Sun Life Insurance, La Opala, Somany Tiles, Bajaj Electricals, Linc Pen and

Plastic, Fiat Auto etc.

CONTRACT ADVERTISING INDIA LIMITED

Branches: Delhi, Bangalore, Kolkata,


Major clients: Bajaj limited, Sony India, Grasim Industries, M.P.Jewellers, Luxor, Cadbury India,

Dabur Foods etc.

REDIFFUSION DY&R

Branches: Delhi, Bangalore, Kolkata, Mumbai, Chennai


Major clients: Tata Tetley, ING Vyasa, Haldia Petrochemicals, Ericsson Mobiles, Godfrey

Philips, Citi Bank, Sail, Cannon etc.

McCANN ERICKSON INDIA LIMITED

Branches: Delhi, Bangalore, Kolkata, Hyderabad, Mumbai


Major clients: Gillette India, Times Fm, Coca cola, Nestle, TVS Suzuki, Khaitan, Johnson and

Johnson India, Goodyear India etc.

RK SWAMY/BBDO ADVERTISING INDIA LIMITED

Branches: Bangalore, Kolkata, Hyderabad, Mumbai


Major clients: Mercedes Benz, Cisco Group, Wipro Group, MTNL, VISA International, GE

Countrywide etc.

APPLICATION OF THE FOUR CHARACTERISTICS OF SERVICES TO THE

ADVERTISING INDUSTRY:

INTANGIBILTY:

The services of conducting advertisements for promotions is intangible. It cannot be seen.

It cannot be experienced unless it is consumed.

One is unable to determine the quality of the service immediately and it cannot be touched or felt

.One needs to experience any advertising service.

An advertising agency cannot readily display or communicate its services and pricing is this case

is complex.

INSEPARABILITY:

Services are typically sold first, then produced and consumed simultaneously. Similarly in case of

the advertising industry an ad is created first and then it is used for promotional purpose.

The delivery and consumption of such a service is inseparable as there has to be interaction

between the client and service providers which tells the service provider the needs and the

requirements of the client (what exactly he is looking for).

Interaction between the business client and the advertising service provider is necessary in this

case.

Mass production does not take place in this type of industry.

Employees as well as the clients affect the service outcome.

Customization takes place in the advertisement industry.

HETEROGENITY:

There is a high probability that the same level of advertising service is not delivered all the time.

It may vary from one employee to another.

Service offered by same employee may be different at different time of the day.

Service offered at one branch may differ greatly from the service offered at another branch.

Even the requirement and the needs of the business clients may differ depending upon the types

of promotional tools they are focusing upon. So there is heterogeneity in the advertising industry.

PERISHABILITY:

Advertisement campaigns and promotions cannot be stored.

It cannot be resold

It cannot be saved for future use or future requirement as it is produced for the present and needs

to consumed immediately after production.

It cannot be returned even if the advertisement fails to create an impact in the minds of the

customers.

7P’s of the services marketing

Successful marketing depends upon addressing a number of key issues. These include: what a

company is going to produce; how much it is going to charge; how it is going to deliver its

products or services to the customer; and how it is going to tell its customers about its products

andservices.

Traditionally, these considerations were known as the 4Ps — Product, Price, Place and

Promotion. As marketing became a more sophisticated discipline, a fifth ‘P’ was added —

People. And recently, two further ‘P’s were added, mainly for service industries — Process and

Physical evidence. These considerations are now known as the 7Ps of marketing, sometimes

referred to as the marketing mix.

PRODUCT

An advertising agency is a firm that specializes in the creation, design and placement of

advertisements, and in the planning and execution of promotional campaigns for products and

services of their clients.

Services rendered by advertising industry are generally intangible in nature. Initially the clients

have to be present in order to avail the services provided by an advertising agency because they

need to make face to face interactions in order to take decisions which help them to enjoy the

benefit in future.

PRICE

Pricing depends on which kind of service company needs and how many times it will be necessary to

achieve the work. Prices have always been a point of discussion and negotiation among

advertising firms and its clients.

PLACE

Place in advertising agency includes not only the place of delivery but also the various channels

of delivery too. initially the clients (customers) has to meet up personally to analyze the kind of

services provided by the ad agencies.Hence the meeting place is referred to as a 4th p in this

service marketing mix.

PROMOTION

Promotion in an advertising industry mainly includes presentations. An advertising agency has to

give presentations to their clients through which they can promote their works . Various kinds

events are also organized as well as campaigns are organized for promotions

PEOPLE

In an advertising industry people refer to the employees who are working in this particular industry. Employees

comprise of creative director, creative manager, copywritersVisualizers, Skilled labors

Graphic designers.

People not only include employees it also consists of the clients who are receiving the service

from this industry.

PROCESS

Introduction of our services to the client

Client briefing about product/service

Brief discussion with creative director

Media work begins

Creative work begins

Proposal presented to the client

Discussion with brand team

Client’s approval

Printing and output presented to the client

Final display of ad campaign

PHYSICAL EVIDENCE

In advertising industry physical evidence can be the corporate offices, their visiting cards or cd’s

which they mainly provide to their clients.

SERVICE APPLICABLE TO THE INDUSTRY

MENTAL STIMULUS PROCESSING

Ethical standards required when customers who depend on such services can potentially

be manipulated by suppliers

Physical presence of recipients not required

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advertising industy in india

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