Indian Advertising Industry

22/04/2020 1 By indiafreenotes

Firms in the advertising industry prepare advertisements for other organizations and design campaigns to promote the interests and image of their clients.

This industry also includes media representative-firms that sell advertising space for publications, radio, television, and the Internet; display advertisers-businesses 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.

Advertising industry market size and growth

Advertising spends in India are expected to grow 12.6% year on year to Rs 48,977 crore for the year 2015. The ad spend in 2014 was Rs. 43,490 crore, which reflected a 12.5% increase over 2013.

The higher growth has been attributed to increase in spending due to elections (both general and state elections) and advertising from categories like e-commerce and telecom.

Between 2013 and 2018, India is projected to be the second fastest growing advertising market in Asia, topped only by China.

Indian advertising industry has changed since independence

The very first case of using advertising as a tool can be traced back to ancient Egypt. Scientists have unearthed steel carvings which are thought to be the very first advertising tool. Since those times, humans have constantly developed new ways to peddle their goods to an audience that is spoiled for choice.

During the 1500s, the printing press was invented by Johannes Gutenberg, and advertising was never the same again. Then came television and the whole industry went through a tremendous change. Now, with the advent of digital publications, there is a chance that the entire advertising industry might need to adapt very quickly.

To trace the routes of how advertising has changed since independence, we are going to break it into three different phases.

  • Phase 1 (Post Independence to late 70s)
  • Phase 2 (1981-1989)
  • Phase 3 (1991- Present)

Phase 1

When India got its independence in 1947, most of the advertising agencies operating in India were owned by Britishers. After the transfer of power, a lot of these companies were either shut down or were sold to Indians. But due to the prestigious tag attached to them a lot of these agencies continued to work with their British counterparts. One reason for this can be attributed to the fact that a lot of machinery like printing presses were manufactured abroad and import costs on them were often quite prohibitive. People exploited legal loopholes to avoid expenses and often disguised themselves as foreign subsidiaries of British businesses.

During this period, the country was still grappling with changes. Even though the first advertising agency was established in Mumbai by Mr. B Dattaram as early as in 1905, Mr. J Walter Thomson is credited with establishing an agency that could really compete with International Ad agencies.

Indians were warming up to the idea of getting their information from the television rather than going through the newspapers every day. Please note that during this time, the literacy rate in India was also quite low, and a lot of people were dependent on postmasters even to decipher the letters that they were receiving.

During this period the radio was commercialized in the year 1967, and radio ads became a big hit. Unlike televisions, radios were quite popular even in villages; radio spots became widely popular. From cricket matches to general news, everything was broadcasted through the radio.

One of the most iconic campaigns of this period was run for Amul Butter. The phrase ‘utterly butterly delicious’ will forever remain in all our hearts. Rahul daCunha was the brainchild behind this campaign. Rahul had inherited Amul from his father, and with free reign, he went all guns blazing to promote his business. The savvy businessman used all the mediums like TV ads, newspaper announcements, and radio spots to promote his product. All his efforts were rewarded as today it is one of the most recognized brands in India.

Phase 2

A lot of people were buying televisions in the eighties. Earlier, the TV was considered a luxury good, but during this period, a lot of middle-class Indians were buying televisions even if the black and white version was all that they could afford.

Indian companies, by now had seen the power of advertising and were engaging agencies to increase sales and to bolster their brand value. A lot of advertising agencies were set up to cater to the needs of the businesses.

During this time television advertisements ruled the roost. The main reason for such a shift can be attributed to commercialization of Door Darshan channel. The quality of programs available increased immensely. Smart advertisers were quick to take advantage of this, and they started to market their products aggressively.

Most of the products sold during this time were targeted at the great Indian middle class. Be it a Bajaj scooter or Parle G biscuits there were a lot of things offered to the common man.

Doordarshan also showed programs designed specifically for farmers, and this also contributed to their increased viewership. Providing something for everyone proved very beneficial for the new channel.

This trend continued till the late 1980s, but after 1991 the whole scenario changed.

Phase 3 (Post liberalization)

After Mr. Manmohan Singh opened up the Indian economy in 1991, there was a frenzy. Foreign companies were itching to set up shop in the Indian subcontinent. This led to a very sophisticated change in the Indian advertising scenes. Advertising agencies were sensitive to the needs of their new customers and quickly adapted to the change.

In the early 1990s and 2000s, Indian advertising agencies became as sophisticated as their foreign counterparts. As the competition grew, so did the need to keep innovating. Earlier advertisers use to target a niche segment and clients, but now they had to cater to the needs of the millions.

Even though Print, Television, and Radio were dominant forms of advertising during this period, the Internet had just started to spread its wings. The Internet ushered in a new era of advertising.

From the early 2000s onwards digital marketing has indeed taken off. Now you can see that almost all the large and medium companies have a presence online. As internet penetration is increasing day by day, the power of digital marketing cannot be ignored.

Digital advertising is going to be the dominant form of advertising in the coming years. However, one thing we need to consider is the fact that in India, there is no model that works for everyone. We need an amalgamation of all mediums to advertise effectively.

As you can see from this write-up, we have come a long way since independence. The Indian advertising community has innovated, adapted, and excelled in every given situation. Even though the road ahead might be a little rocky, the Indian advertising community will lead ahead like they always did.