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Home > Business > Business Headline > Report

Ad industry clocks 6% growth

Nandini Lakshman in Mumbai | June 13, 2003 14:02 IST

The general economic slowdown in the last two years sent the advertising industry on a downward spiral. Predictably, corporates tightening their belts immediately cut their ad expenditures to size.

A silver lining, though faint, is finally emerging. According to an Initiative Media (Lowe's media arm) report, based on data culled from the Indian Readership Survey 2002, Time Monitoring's Medialogist and TV viewership monitoring agency TAM, the total media expenditure for the calendar year 2002 was Rs 9,472 crore (Rs 94.72 billion).

This is a 6 per cent growth over the previous year, and a much-needed boost for the ad industry that took a 3 per cent dip into the negative at the turn of the century.

In 2002, print and television continued to dominate advertising space with 52.7 per cent and 38.7 per cent shares respectively. But there was a melodious ring to both Internet and radio advertising.

Even though the Internet ad space was a mere 0.5 per cent of the total pie, it grew 34 per cent from Rs 36 crore (Rs 360 million) to Rs 48 crore (Rs 480 million).

The rise of FM channels saw radio make music at Rs 208 crore (Rs 2.08 billion), up from Rs 178 crore (Rs 1.78 billion) in 2001.

Among corporates, foods and toiletries major Hindustan Lever Ltd continued its bull run as the country's star advertiser.

The idiot box accounted for almost 94 per cent of its total Rs 729 crore (Rs 7.29 billion) spend. Procter & Gamble was a distant second in terms of spends at a mere Rs 176 crore (Rs 1.76 billion).

What's more startling, however, is the fact that domestic companies are gradually being edged out from the top 10 spenders' list.

In 2000, the list had a fair sprinkling of domestic and multinational players. Even in 2001, the likes of Marico, Dabur, Paras Pharmaceuticals and Godrej Foods qualified.

Now, the number has whittled down to two. Paras appears on the number three slot and Bajaj Auto reappears (after a two year gap) at number 8 with a Rs 122 crore (Rs 1.22 billion) ad spend. The war cry in white goods segment has made both Samsung and LG familiar names on the list.

If soft drinks were the main guzzlers on TV in 2001, last year, toilet soaps as a category, raced ahead with a Rs 253 crore (Rs 2.53 billion) spend.

Despite Coca-Cola's Aamir Khan commercials, ad spends were down from Rs 144 crore (Rs 1.44 billion) in 2001 to Rs 132 crore (Rs 1.32 billion). In comparison, Pepsi Foods, was up from Rs 88 crore (Rs 880 million) to Rs 107 crore (Rs 1.07 billion).

"It is a mix of both Pepsi's chips and drinks," explains a media director. The automobile industry, however, drove away with almost 50 per cent increase in spends.

Among TV channels, Star Plus emerged as the lead entertainment channel with a viewership share of 23 per cent, up 20 per cent in 2001. Zee is stable but Sony and Doordarshan lost viewership.

Print continued to make headlines. Major newspapers sported a slimmer, international look, which has, apparently, gone down well with advertisers.

Media experts seem bullish about the medium: "Allowing 26 per cent FDI in Indian entities should boost print further. It will have a direct bearing on both content and advertising," says a media manager in a leading agency.

Already, the number of publications in the country has gone up 5.73 per cent to 51,960. The number of dailies was up from 5,364 to 5,638.

The outdoor is growing at an annual clip of eight per cent. The industry may still be unorganised, but the growing clout is in sync with rising ad rates thanks to TV channels, FM radio and telecom operators jostling for prime hoarding sites.

Contrary to perception, cinema advertising has grown only seven per cent despite the refurbished halls, multiplexes and state-of-the-art projection systems wooing viewers.

Online ticket bookings, phone-ins and sale of tickets at multiple locations are likely to drive the medium further. At least, the advertisers are hoping so.

Why else would they spend on product placements in films? Now, that's a script that most of them will be watching very closely.

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