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Advertising and Marketing Industry in India

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Advertising and Marketing Industry in India

August, 2013


‘Strategy’ decides roadway to a company’s targets and goals. Marketers in India have now started experimenting with new Medias and communication tools to woo consumers. Though conventional strategies (like reaching the audience through TV and radio) still appeal the masses, there is an emerging class of consumers who access modern techniques to seek information and entertainment.

Marketing strategies, thus, form blood-lines of any business as the company’s future can be forecasted based on their efficacy and effectiveness.

Marketing 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.

Advertising and Media & Entertainment Industry

The Indian M&E industry is projected to grow 11.8 per cent to clock revenues worth Rs 91, 700 crore (US$ 15 billion) in 2013, according to an industry report. While conventional media such as television (TV), print and radio continue to be dominant segments, animation, visual effects, films and music are also posting strong progress owing to content and the benefits of digitization.

Internet and online portals are largely being used by marketers for airing their advertisements and awareness campaigns. Even though conventional media like television and newspapers continue to be the preferred media for seeking information and entertainment (as they garner over 80 per cent of the advertising market in India), the internet has been steadily increasing its share in the advertising pie. Spends on digital media have substantially increased from just over 1 per cent of total Indian advertising spend in the year 2005 to nearly 7 per cent in 2012.

Search advertising accounted for about 38 per cent of the total online advertising spend, translating to about Rs 850 crore (US$ 139.10 million) while display advertising formed a substantial 29 per cent (Rs 662 crore [US$ 108.34 million]) by March 2013, according to the findings of ‘Digital Advertising in India’ report, by the Internet and Mobile Association of India (IAMAI) and IMRB International.

Meanwhile, advertisements on mobile phones and tablets have grown from a 7 per cent share in FY 2011-2012 to 10 per cent of the Indian online ad market in FY 2012-2013, amounting to spends of around Rs 230 crore (US$ 37.64 million). Social media, email and video advertising constitute 13 per cent, 3 per cent and 7 per cent of the online advertising market, respectively.