Advertising and Marketing Industry in India

Introduction

The Indian advertising industry has evolved from being a small-scaled business to a full-fledged industry. The advertising industry is projected to be the second fastest growing advertising market in Asia after China.

It is estimated that by 2018, the share of ad spend in India’s Gross Domestic Product (GDP) will be around 0.45 per cent.

The Indian government has given tremendous support to the advertising and marketing industry. Advertising expenditure is likely to increase in the financial sector, driven by Reserve Bank of India (RBI) policies which could result in a more favourable business environment. Also, proposed licences for new banks and better market sentiments render the advertising and marketing industry in India a fertile space.

Market size

India’s Advertising industry is expected to grow at a rate of 16.8 per cent year-on-year to Rs 51,365 crore (US$ 7.61 billion) in 2016#, buoyed by positive industry sentiment and a strong GDP growth of 7 per cent and above.

India’s digital advertising market has grown at a fast pace of 33 per cent annually between 2010 and 2015##, while spending as a percentage of total advertising increased to 13 per cent or nearly US$ 1 billion in 2015.

Print contributes a significant portion to the total advertising revenue, accounting for almost 41.2 per cent, whereas TV contributes 38.2 per cent, and digital contributes 11 per cent of the total revenue. Outdoor, Radio and Cinema make up the balance 10%.

Of the current Rs 2,750 crore (US$ 407.66 million) digital advertisement market, search and display contribute the most – search advertisements constitute 38 per cent of total advertisement spends followed by display advertisement at 29 per cent, as per the study.

The Internet’s share in total advertising revenue is anticipated to grow twofold from eight per cent in 2013 to 16 per cent in 2018. Online advertising, which was estimated at Rs 2,900 crore (US$ 429.9 million) in 2013, could jump threefold to Rs 10,000 crore (US$ 1.48 billion) in five years, increasing at a compound annual rate of 28 per cent.

Recent Developments:

• The Indian Railways is working on a new advertising policy aimed at installing 100,000 big digital screens at 2,175 railway stations across the country, which is expected generate Rs 11,770 crore (US$ 1.76 billion) revenue annually.
  

  Source: himanshuseth

• Times Internet Limited plans to invest US$ 100 million in development of smart marketing technology platform Colombia, which will serve its marketers to engage with around 200 million digital users per month.
  

  Source: knowstartup

• Zarget, a Software-as-a-Service (SaaS) based conversion rate optimisation start-up, has raised US$ 1.5 million in seed funding from Accel Partners, Matrix Partners and Freshdesk Inc’s founder Mr Girish Mathrubootham, which will be used to build more marketing related tools.
  

  Source: bgr

• Snapdeal.com, one of India’s largest and fast growing e-commerce companies, has acquired TargetingMantra (Insightful Pvt. Ltd), which is a Gurugram-based marketing and personalisation services company, as part of its plan to enhance the experience for its customers.
  

  Source: mmbiz

• Indian Railways has appointed Ernst & Young (EY) as a consultant to discover its advertising potential, which is in line with the Railway Budget proposal of increasing non-fare earnings to over Rs 5,000 crore (US$ 741.2 million) in five years.
  

  Source: licdn

• MoMark Services, a mobile based customer engagement platform for small and medium businesses, has raised US$ 600,000 from YourNest Angel Fund and LNB Group, to scale up its product offerings and talent acquisition.
  

  Source: dnaindia

• Tata Motors has appointed renowned football player Lionel Messi as the global brand ambassador for Tata cars and utility vehicles globally, with an aim to tap the youth market and expand visibility and presence of Tata Motors in newer markets.
  

  Source: amazonaws

• Advertising agency J Walter Thompson has launched its global digital agency network ‘Mirum’ in India which will provide services such as strategy and consulting services, campaigns and content, experience and platforms, analytics and innovation and product development, with the target to increase non-traditional media revenues to 40-45 per cent from 35 per cent currently.
  

  Source: ddbmudra

• DDB Mudra Group has planned to launch ‘Track DDB’, a brand that addresses the data-led world of marketing communications, which will provide services like creative, data and digital analytics, database marketing, CRM, digital and mobile marketing in India.
  

  Source: Postbazaar

• Google is all set to help India implement Prime Minister Mr Narendra Modi’s “Digital India” initiative, and the government has a well laid out plan to realise it, said Google’s Chief Internet Evangelist Mr Vinton G. Cerf. Digital India is Rs 1.13 trillion (US$ 16.75 billion) government initiative that seeks to transform the country into a connected economy, attract investment in electronics manufacturing, and create millions of jobs and support trade.
• As companies look for better productivity and increasing efficiencies in a tough market environment, market research firm Nielsen has launched its first consumer neuroscience lab in India at its Mumbai headquarters. The neuroscience lab will augment the company’s research capabilities in packaging and research, improving their effectiveness.
• MPS North America LLC, the US subsidiary of Bengaluru-based publishing solutions provider MPS Ltd, has acquired Electronic Publishing Services Inc. (EPS), a New York-based firm with interests in content creation, art rendering, design and production. The deal will allow MPS to strengthen its foothold in North America.
• Jaipur-based Girnar Software Private Limited, which owns and operates the website CarDekho.com, announced that it has raised US$ 50 million in its second round of funding. The funding was led by Hillhouse Capital with participation from Tybourne Capital and Sequoia Capital.
• ZipDial has become the first Indian technology product startup to be bought by Twitter in what is the third such deal led by a global corporation following the acquisitions by Facebook and Yahoo. The ZipDial deal is expected to cost Twitter US$ 34-35 million. This feature is expected to help Twitter reach people who will come online for the first time in countries such as Brazil, India and Indonesia, mostly using a mobile device.
• Telecom major Axiata’s subsidiary, Axiata Digital Advertising (ADA) has formed a joint venture with US-based advertising tech firm Adknowledge to get into the US$ 47 billion digital ad market in the Asia Pacific region and has identified India as a ‘key’ market.

Government Initiatives

The Governments of India and Canada have signed an audio-visual co-production deal which facilitates producers from both countries to harness their collective artistic, technical, financial and marketing resources, and encourage exchange of culture and art between the two countries. The agreement is also likely to 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,” as per the agreement.

India and Poland are seeking to enhance cooperation 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 a delegation from Poland led by Ms Malgorzata Omilanowska, Secretary of State. The two countries will form a joint working group that will help improve cooperation in fields such as student exchange programmes, animation, films and digitisation, among others. Mr Rajyavardhan Singh Rathore, Minister of State for Information & Broadcasting, has announced that Indian government has planned to increase advertising spend on the digital platform which will help increases the government’s presence in digital media.

References: IBEF