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CHAPTER 1:
INDUSTRY PROFILE

1) INDUSTRY PROFILE:

The Indian advertising industry is talking business today. It has evolved from being a small-scale business to a full-fledged industry. It has emerged as 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. Indian advertising industry with an estimated value of Rs.23, 200-crore has made jaws drop and set eyeballs gazing with some astonishing pieces of work that it has given in the recent past. The creative minds that the Indian advertising industry incorporates have come up with some mind-boggling concepts and work that can be termed as masterpieces in the field of advertising. The Indian advertising industry is expected to grow 61% by 2010 (with advertising spend climbing to Rs. 36,731 crore) 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. 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 that include client servicing, media planning, media buying, creative conceptualization, pre and post campaign analysis, market research, marketing, branding, and public relation services. Keeping in mind the current pace at which the Indian advertising industry is moving 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.

Key factors which have contributed to growth of the Indian advertising industry are: • Rapid economic growth of the country on the back of economic liberalization and deregulation • Increase in consumer prosperity

• Entry of global consumer companies with large advertising budgets • High degree of competitive intensity among consumer companies • Growth in media vehicles leading to increase in media penetration PricewaterhouseCoopers in its  “Indian entertainment and media outlook 2009" report has estimated that the Indian Entertainment & Media industry will return to double digit growth in 2010. India’s E&M industry witnessed remarkable growth in recent years having consistently outpaced growth in domestic GDP. While annual average growth in nominal GDP was 14.48% over the period 2004-08, overall E&M growth in 2008 slowed, reflecting weaker economic conditions.  This continued in 2009.  After registering a growth of around 16.6% compounded annually over the period 2004-08, growth in the E&M industry in 2009 decelerated to 8.0%. This has largely been influenced by a marked slowdown in advertising spending, which has touched 9.2% in 2009 after having posting a CAGR of close to 17.3% during 2004-08. Growth rates will increase in 2010 to 10.4% as economic conditions are expected to gradually improve.  For the remaining years of the forecast period, the industry will continue to grow at increasing rates, resulting in the overall compound annual growth rate for the period 2009-13 of 10.5%. Advertising revenues in the second half of the year are set to grow more than 65 percent, says a study. The industry logged just Rs.7,452 crore in January 1-June 30 2009, a whopping Rs.1,414 crore less than what it made in the same period in 2008, according to the review of the...
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