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Advertising and Marketing Industry in India

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Advertising and Marketing Industry in India

August, 2014


India's purchasing power has improved discernibly over the last ten years or so. There is greater awareness among consumers, who are more selective about the products they purchase, and marketers are continuously trying to provide the best deals to current and potential customers.

As per McKinsey Global Institute (MGI), India's consumer markets are anticipated to increase exponentially during 2005-2025, and during this period the total consumption in the country is projected to increase fourfold, rendering it the world's fifth largest consumer market by 2025. MGI expects the country's real gross domestic product (GDP) to increase at 7.3 per cent per annum through to 2025.

The Government of India has also continuously supported the advertising and marketing industry. Advertising expenditure is projected to grow in the financial sector, backed by Reserve Bank of India (RBI) policies which will result in a more congenial business environment; proposed licences for new banks; and better market sentiments.

Market size

Advertising budgets are anticipated to grow by 11.6 per cent as opposed to 10 per cent in 2013, as per the 'This Year, Next Year 2014' report released by the WPP group's media planning and media buying arm, Group M.

Digital advertising will witness the most growth this year, at around 35 per cent over the Rs 3,042 crore (US$ 503.56 million) in 2013. TV advertising is expected to grow by 12.8 per cent this year, whereas print is projected to witness eight per cent growth compared to four per cent in 2013.


The annual Cannes Ad Fest saw India taking home 27 metals, six less than the 33 it won in 2013, which was the country's biggest haul at the awards. The agency that won the most awards this year was J Walter Thompson (JWT) followed by McCann, with Ogilvy & Mather (O&M) also winning awards.

The Goafest awards 2014 were dominated JWT, which won 40 awards, including one Grand Prix, five gold, 13 silver and 21 bronze awards. Taproot India placed second with 29 awards - three gold, 10 silver and 16 bronze awards, followed by Ideas@work with 10 silver and 4 bronze awards. Draft FCB, Alok Nanda and Company, Digital Law and Kenneth also awards.

Metros, airports and entertainment centres are fast becoming marketing hubs. The Gurgaon Rapid Metro has opened its stations to brands - the Cybercity station is now IndusInd Bank Cybercity. Other metro lines following suit include Micromax Moulsari Avenue, Vodafone Belvedre Towers and Airtel Phase 3. The Andheri-Ghatkopar corridor of the Mumbai Metro, which will be launched soon, also plans to be marketer friendly. These media vehicles offer advertisers massive opportunities for branding and business, even if they seem somewhat expensive.

E-commerce companies such as Quikr, Flipkart, Snapdeal and Jabong, plan to focus on 360-degree advertising, which goes much beyond digital marketing. Category-specific companies like FabFurnish are also looking to run television advertisement campaigns. "We have already launched a new television campaign. This is because digital advertising is silent advertising; it can't do brand story-telling for us. Also, television brings credibility to the brand," as per Mr Piyush Bansal, founder and chief executive, Lenskart.

In an effort to cater to the changing needs of the customers, instant noodles brands are continuously innovating. Nissin, for one, has launched the Scoopies Mad Masala Short Noodle, which measures just 3 cm in length. Instead of the standard masala mix sachet, the noodles are pre-coated with masala, both on the inside and outside. The company commissioned its third factory, a Rs 100 crore (US$ 16.55 million) unit in Odisha in early 2014, from where the product will be manufactured. plans to spend about Rs 100-150 crore (US$ 16.55-24.82 million) on advertising in FY15. Flipkart too plans a major push in its fashion lifestyle category that has brought with it a new demographic of online shoppers, which include younger buyers in the age group of 20-27 years and those in tier II and III cities. The company is tying up with leading lifestyle brands to introduce dedicated online brand stores which will be subsets to its primary store.

Government Initiatives

The Government of India and Canada have signed an audio-visual co-production deal which can enable producers from both countries to pool in their collective technical, artistic, financial and marketing resources, and lead to an exchange of culture and art between the two countries. The agreement could also lead to better promotion of Indian locales for shooting films. "The agreement will also lead to the transparent funding of film production and boost export of Indian films into the Canadian market," stated the agreement.

India and Poland will be improving their co-operation in the digitisation and restoration of film archives. This was decided in a meeting between Mr Bimal Julka, Secretary of Information and Broadcasting, India, and the Polish delegation headed by Ms Malgorzata Omilanowska, Secretary of State. The two countries will form a joint working group that will help better co-operation in fields such as student exchange programmes, films, animation, and digitisation, among others.

Road Ahead

The advertising and marketing sector in India is projected to enjoy a good 2014. Growth is likely in retail advertisement expenditure, driven by more and more players getting into the food and beverages segment, e-commerce gaining a foothold in the country, and local players entering the market. In the automobiles sector, the focus of two-wheelers on rural areas could lead to more launches by current players and, subsequently, more advertising spends. The telecom sector could grow too, on the back of increased smartphone penetration and service providers bringing down prices for 3G schemes; this could result in greater competition and, resultantly, higher advertisement spends.

Exchange Rate Used: INR 1= US$ 0.0165 as on August 25, 2014

References: Media Reports, Press Releases, McKinsey Report