The Hindu Business Line : Ad industry has reason to smile, finally

THE advertising industry is all smiles this New Year. "Finally the market is looking bullish," said Mr Sandeep Vij, President, Optimum Media Solutions (OMS), indicating the optimism of the advertising fraternity.

It's been quite a landmark year for the advertising industry that crossed the Rs 10,000-crore mark thanks to a good monsoon, booming stock markets and a growing economy. After experiencing flat growth in the previous year, the industry is on a revival mode with an 8-10 per cent growth rate.

According to industry estimates compiled by research agency TAM India, in 2003, the total size of the industry is Rs 10,300 crore compared to Rs 9,509 crore in the previous year. Television had a 42 per cent share with spends of Rs 4,300 crore and press garnered 45 per cent of the pie with advertising of Rs 4,660 crore. And the party is expected to continue in 2004 as well.

"This size of the advertising market crossed the Rs 10,000-crore mark and the categories which stormed include two-wheelers, telecom service companies, soft drinks and fast moving consumer goods leading the pack," said Mr Atul Phadnis, Director, S-Group, TAM India.

"There is lot of optimism as clients are investing more and they are able to get a good return on investment," said Ms Vibha Desai, Executive Director, Ogilvy & Mather (O&M).

During the World Cup early this year, the total advertising for the tournament touched a whopping Rs 400 crore. "We expected the ad budgets to remain low during the rest of the year. But the good monsoon led companies to rework their advertising plans," said a Delhi-based media planner.

While industry estimates that ad spends went up by 15-25 per cent during the festive season, a Mindshare-Maximise study indicated that due to strong demand for durables, housing and auto segments, the ad industry was set to grow at the rate of 12 per cent this year.

Though television continued to dominate the advertising scene and the gap between it and the print media narrowed, this year there was a renewed interest in the latter. "Print also made a comeback this year. Categories such as durables, automobiles, telecom and financial services are natural advertisers in print as these products have a male skew," said Mr Sandip Tarkas, President, MPG (part of Havas Group). There were also greater associations with events, films and festival poojas.

Also, the year saw companies' spending money on brand building. "There was greater focus on branding at the point of sale, through signage and on packaging, and on mall activity, where sales actually take place,'' said the media planner.

So going forward how does 2004 look? The ad industry feels that the current growth rate could be sustained. Optimists felt that it could even touch 15 per cent with the emergence of new advertising mediums.

"Broadband seems to be real now, mobile telephony is becoming a medium. Consultancies are springing up; verticals are being set up. Even traditional print companies are loosening up and getting off their high stool and getting receptive to new ways. With industry and media looking so optimistic the next year should see all of us smiling," said Mr Vij.

According to Mr Tarkas, next year could see the emergence of personalised advertising.

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