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Introduction

Background

Advertising is an enormous global business. Annual expenditures on advertising in the United States totals about USD 350 billion, with nearly USD 515 billion spent worldwide. Worldwide advertising expenditure has been growing about 9 to 10 percent/year, with the United States, Great Britain, Asia, and Latin America leading the way. In the scenario of Bangladesh, this expenditure has increased by more than 8 times from the early nineties till date. During the starting of the nineties, the total amount of advertising expenditure was around BDT 500 million, which jumped to almost BDT 1200 million in the year 2000, further increasing to BDT 3900 million for the current year.

There was very little advertising practice in Bangladesh before independence. Due to inadequate industrialization, demand for specialized advertising agencies was very limited. Pioneers in the field such as Bitopi, East Asiatic (now Asiatic), and Interspeed entered the market almost simultaneously in the year 1967. Their clientele comprised of multinational companies like Lever Brothers Bangladesh Ltd., which had started to increase the range of its products. Other advertising companies started operating after independence.

The reasons that are, and will be, contributing to the development of the industry are:

Increasing amount of MNC operations in Bangladesh.
Increasing number of local players in almost every sector. •Increasing number of international advertising networks’ affiliation with local agencies. •Growing competition and declining monopoly businesses and brands.

Various local agencies are getting affiliated with international advertising networks, such trends introducing huge changes in the local advertising practices. There is no formal way of tracking of advertising agencies in the country. However, there is an association, known as AAAB (Advertising Agencies Association of Bangladesh), which was formed back in 1977. Currently, 37 member-agencies are registered with the AAAB. AAAB decides on the membership application of the applicant based upon its qualification and capability.

According to formal media sources, a total of 150 agencies are registered with Bangladesh Television, while the number exceeds 500 when both the formal and informal sectors are considered. However, around 80% of the formal market share is held by the top nine advertising agencies of the country. Other advertising agencies claim about 13% of the market share, while the rest is accrued to in-house advertisement of business firms and enterprises.

The advertising industry is one of the fastest growing industries of the country. In the last ten years, the competition has increased substantially with new agencies joining the market; and former agencies expanding their services to meet new clients’ requirements, getting technical assistance from international advertising networks to set new standards for advertising in the country; and of course, technology offering more scope to the media. The growth of the advertising industry since 1967 demonstrates a direct relationship between the economic growth of the country and purchasing power of the consumers. Informal advertising agencies are continually springing up in competition with formal ones.

The advertising agencies have clients which are primarily comprise of private national companies (PNC), multinational companies (MNC) and non government organizations (NGO). The MNCs comprise more than 60% of the media share followed by the private national companies comprising 25%. The major client of the print media is the government. The advertising business is governed by the competition prevailing in the market and it goes without saying that products having high competition advertise more and thus consumer goods hold higher portion of the advertising budget. Nowadays, the export oriented industries have also become the clients of the advertising industries in the field of...
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