INDIAN

ADVERTISING
INDUSTRY :
TUSSLING IN
THE GLOBAL
MARKET

Made by:
Roshni Patel
D 15
BBA general
3rd semester
 INDEX
Acknowledgement

 Introduction

 Analysis

 The Trend

 Analyzing the Global Advertising

Industry

 Indian ad industry attracting

overseas attention
 Indian Ad Agencies Finding Feet
Abroad

 PINSTORM
• COMPANY PROFILE
• APPROACH & SERVICES
• THE TEAM
• MORE ABOUT PINSTORM
• PINSTORM CLIENTS
 Lintas & Pinstorm tie up for
Digital Facts & Figures: Indian
Advertising Industry
 Advertising

• TELEVISION
• FILMED ENTERTAINMENT
• PRINT MEDIA
• RADIO
• MUSIC
• LIVE ENTERTAINMENT
• OUT OF HOME ADVERTISIMENT
• INTERNET

 CONCLUSION

 REFRENCES
 Indian
advertisin
g
industry:
 An
Introducti
on

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

es13, 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.

Advertising agencies in the

country too have taken a
leap. They have come a long
way from being small and
medium sized industries to
becoming well known brands
in the business. Mudra,
Ogilvy and Mathew (O&M),
McCann Ericsonn,
Rediffussion, Leo Burnett
are some of the top
agencies of the country.
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 al this
there is definitely no looking back for the Indian
advertising industry that is all set to win accolades from
the world over.
 Indian
advertisin
 g
industry:
An
analysis
This report starts with a historical overview of the
Indian advertising industry and examines how advertising
spends have undergone a change
over the years. It looks at the
trends and key drivers and their
impact on the industry. A summary
of the issues faced by the
advertising industry has also been
included. The report conducts a
detailed external and internal
study of the Indian advertising
industry within the PEST and
Porter frameworks.

It also studies the competitive

landscape including the top three
agencies- JWT, O&M, and Lowe’s. Since the agencies are
not listed and do not disclose their financial information,
the report has alternatively covered a summary of their
operations and competitive strategies. The report
concludes with an outlook on the industry.

The Indian advertising industry has been evolving at a

fast pace over the past few years owing to an increase in
the forms of media and communication and the
emergence of new distribution channels. Currently India
has a low advertising spend to GDP’ ratio as compared to
other economies. Competition for the outsourcing
business and creativity leakage represent the major
issues and implications. However, the television
advertising is expected to register high rates of growth,
with India expected to become Asia's leading cable
market by 2010.

Executive Summary
The Indian advertising industry is being reshaped by
regulatory and technological changes spanning various
media platforms- radio, TV, internet, print, and outdoor.

Deregulation involving FM radio, Direct-to-Home (DTH),

broadband, the implementation of the conditional access
system (CAS), and foreign direct investment has laid the
foundation for faster growth of the advertising industry.
Stricter norms on social responsibility, obscenity, and
ethics are altering the industry practices.

The industry is dominated by ten agencies, who account

for the majority of capitalized billings. Top 10-15
advertisers with the biggest ad spend (like HLL, Maruti,
Hero Honda, Pepsico) wield high bargaining power and
their account movement from one agency to another
alters the competitive dynamics.

Table of Contents:
1. Introduction

1.1 Industry Definition

The Indian advertising industry comprises establishments
that create and sell advertisements for media such as
 newspapers, periodicals, radio, and television.

1.2 Industry Segments

Signs and Advertising Displays
Advertising Agencies
Outdoor Advertising Services
Radio, Television, and Publishers' Advertising
Representatives
Advertising Not Classified Elsewhere, Direct Mail
advertising Services

2. Market Dynamics

2.1 Market Overview

Indian advertising industry is being driven by rising consumerism
and the entry of global brands. In 2005, the industry
experienced a growth of 10%.

2.2 Trend Analysis

Increasing Popularity of Online Advertising
Shift towards a Fee-Based System
Growth in Out-of-Home Advertising

2.3 Key Drivers

Penetration of Delivery Platforms Rising
Increased Broadband Access
Mobile Advertising

2.4 Major Issues and Implications

Competition for the Outsourcing Business
Creativity Leakage
 3. PEST Analysis

3.1 Political Factors

Review of Advertising Code
Ban on Surrogate Advertising Hitting Advertising Revenues
CAS Implementation Altering Viewership Distribution
Direct-To-Home Growth Spurring Niche Programming
FM Radio Deregulation Increasing Media Penetration

3.2 Economic Factors

Opportunities from Rural Income Growth
GDP Growth Fuelling Advertisement Spends

3.3 Social Factors

Tweens Emerge as Influential Consumer
Non-Metro India Influencing Advertising Strategies

3.4 Technological Factors

Digital and Graphic Innovation in Outdoor Advertising
Animation Industry Driving Creativity
INSAT-4A Launch
Internet Penetration Driving Online Advertising

4. Michael Porter’s Five Force Analysis

4.1 Buyer Power

Increased Bargaining Power of Buyers
Big Accounts Rule Over Agencies

4.2 Supplier Power

Shortage of Creative Talent
Mushrooming TV Channels Advantageous for Agencies
 4.3 Intensity of Competition
Concentrated Market with MNC’s Leading the Industry
Advertising Players Setting up Second Agencies
Rush for Neighboring Markets

4.4 Threat of New Entrants

Dominance of Top Agencies
India Gaining Popularity as an Emerging Market

4.5 Threat of Substitute Products

Direct Marketing

5. Competitive Landscape
Ogilvy and Mather
Lowe
JWT

5.1 Competitive Positioning

Presence in Cities across India
Capitalize Billing
Creative Successes
Loss of Major Account
Key People

5.2 Competitive Strategies

O&M
• Sets up Digital Media Network Firm
• Consolidates Out-of-Home Businesses
Lowe
 • Offers Brand Marketing Consulting
JWT
• Targets Airlines, Financial Services and Telecom
• Repositions Fortune as a Full Service Agency

5.3 Operation Analysis

5.3.1 Client Base

O&M-Asian Paints, Castrol
Lowe- Pepsodent, Close Up
JWT-Pepsi, DeBeers

5.3.2 Major Accounts

O&M-Hutch: You and I, Fevicol: Building Bonds
Lowe India- Surf Excel: Stains are Good, Axe: The Axe Effect
JWT-Pepsi “Yeh Dil Maange More”, Lux: Beauty Soap for Film
Stars

5.4 Key Developments

O&M –O&M Launches Meridian, Ogilvy Worldwide Outsourcing
Work to India
Lowe India - Wins LG Account, Lowe loses Liril to McCann
JWT- JWT bags Hero Honda Super Splendor, JWT loses
Kentucky Fried Chicken

6. Industry Outlook
Indian advertising industry is forecast to grow at the rate of 12-15% in
2006.
 Indian
Advertisin
g
Industry:
The
Trend
The Indian advertising spends, as a percentage of GDP, is
0.34%, which lags behind other developed and developing
countries.

During fiscal 2005, the gross advertising spend in India is

estimated at Rs 111 billion, and is expected to grow at 14.2% to
reach Rs. 127 billion by fiscal 2006.
 The key factors which have
contributed to growth of the
Indian advertising industry
include:
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

 Higher degree of competitive intensity among

consumer companies; and

 Growth in media vehicles leading to increase in media

penetration
 Segmentation of Advertising
Spends
The five key industry segments comprise print, television,
radio, cinema, and outdoor. These different segments
within the industry are at varying stages of growth and
corporatization.

Media Spends as % of Total Ad Spend

Year Print TV Radio Cinema Outdoor Internet
2000 49.0% 39.3% 2.5% 0.5% 8.4% 0.3%
2001 48.4% 40.6% 2.7% 0.4% 7.5% 0.4%
2002 47.2% 41.9% 2.9% 0.7% 7.0% 0.4%
2003 46.6% 43.0% 2.9% 0.7% 6.5% 0.4%
2004 46.3% 43.7% 2.9% 0.6% 6.0% 0.3%

The Indian television industry has grown rapidly,

especially since 1991, which saw the beginning of satellite
broadcasting in India. This growth was also aided by the
economic liberalization program of the Government. The
growth of the satellite television audience saw
proliferation of a number of satellite television channels
offering more choices to media buyers and consumers of
entertainment. Thus, the television broadcasting
business, which started off as a single government
controlled television channel, now has over 300 channels
covering the Indian footprint, resulting in growing ad
spends on this medium. Reforms and proliferation of
private players were the key reasons for this rapid
growth of the share of television in the advertising
industry.

Similarly, sectoral reforms and increased number of

players could drive market expansion for emerging media
segments including radio, outdoor, cinema and internet.

Analyzing
the Global
Advertisin
g Industry
The global advertising industry is showing definite signs
of a recovery, after one of the worst-ever slumps in
advertising. Media-buying firms, TV broadcasters and
radio and billboard companies are making positive noises
about the future. Print advertising looks more promising
and several US magazines saw ad pages increase quite
dramatically.

The future of the ad industry is not in doubt - things will

get better, but only companies that have positioned
themselves correctly will be able to capitalize on the
upswing. To do this, many firms are looking toward
technology as the point of departure for huge returns.
The convergence of the Internet with television, the
growth of wireless communication, and the increasing use
 of digital video recorders all offer new avenues and
challenges for advertisers. Further consolidation across
national borders is also expected as ad firms try to
deliver global capabilities in an increasingly competitive
market.

Aruvian Research’s report on Analyzing the Global

Advertising Industry thoroughly explains the global
advertising industry by establishing a clear demarcation
of the industry components and the top spenders as well
as the service providers in the global context. This helps
the reader understand the industry in a nutshell
overlooking the competitive activity in the industry.

The report also builds a geographical mapping of the

major advertising markets worldwide namely the United
Kingdom, France, Germany, China, Japan, Canada, Spain,
The Netherlands, Italy, Belgium and the United States.
In this section, the report explains each of these
markets in detail with their commercial characteristics
along with the major players which are active in these
markets thereby drawing up the overall business picture
for advertising in these markets.
Indian ad
industry
attracting
overseas
attention
The Indian advertising industry is increasingly attracting
the attention of many American companies and
communication agencies, opening up business avenues for
the small and medium marketing agencies in India.

Worldwide
Partners Inc, the
ninth largest global
network of more
than 90 marketing
and communications
agencies in about
50 countries,
recently tied up
with Indian
Pressman Advertising & Marketing Ltd following repeated
enquiries about India.

“In the last year, we got the most number of enquiries

for India and its advertising scenario from America,
followed by enquiries from West Asia and some from
Europe,” said Ms Lisa Kettman-Kervinen, Director,
Worldwide Partners Inc, on a recent visit to India.

Most of the enquiries were in the nature of harnessing

online solutions like logo designs, computer science
graphics and outsourcing of other digital solutions. India
already has a reputation for computer skills due to the
digital education in India and so more and more clients
are waking up to the fact that there is good business
possibility here.

Before Pressman came on board as a full partner in

December 2007, Worldwide partnered Image Ads for
some years, before the company decided to sell part of
their agency and sold shares back to the network.

Today, ‘Worldwide’ has two partners in India, with

Images being an associate partner. Each partner is a
shareholder in the network.

Currently, Worldwide is focusing on strengthening its

position in India and Korea specifically and Asia Pacific
largely, to get more partners and directors on board, she
said. The network is scouting for a director based out of
Singapore for the purpose.

The network has a fairly established presence in the rest

of Asia with offices in China, Japan, Malaysia and
Australia.

For Pressman, which handles clients such as Bata India,

BlueStar, Mudra Lifestyle and LIC, it is a good
opportunity to connect with agencies from across the
world in Worldwide’s network.

“The network is like a well where we can dip for some

more water as and when we require,” said Dr Niren
Suchanti, Chairman and Chief Executive Officer,
Pressman. “It is a very active network where we have
already received 60 enquiries in a week. As all members
do business independently, we can negotiate and agree on
some small fee to use the expertise of the other agency,
including exchanging creatives for specific campaigns.”

THE ECONOMIC
TIMES:
Indian Ad
Agencies
Finding Feet
Abroad
 Perhaps for the first time, the Indian ad agency flag is
being hoisted on foreign soil. The dream of a traditional,
brick-n-mortar Indian ad agency (yes, majority-owned by
Indians, not Indian arm of a global agency network), of
going global is finally being realized, albeit by a host of
new generation agencies that focus on the digital and
mobile space.

Search engine marketing firm

Pinstorm, set up by Mahesh
Murthy, is foraying beyond
Indian, Malaysia and Singapore
to set up offices in China, US,
UK and Sweden and Australia by
next year.

Internet promotions company,

Webchutney, is expanding in the South-East Asian region,
specifically Malaysia and Singapore by next month.
Mobile marketing company, Mobile2win (owned by
 contest2win), set this trend by incorporating in Hong
Kong (this operation has recently got bought over
Disney), even before it opened its Indian office in ‘03.

If internet knows no boundaries, why should ad agencies

in this space have one, goes the logic with most players
here. Anyway, all these internet agencies already work
for global clients, either onshore such as mobile2win or
outsourcing work offshore, much like Webchutney.
Already, almost two-third of online agencies revenues is
coming from global clients.

“It is much easier to watch trends in media online. Making

an ad online is far easier than doing it in traditional
media,” says Siddhartha Rao, CEO & co-founder,
Webchutney.

“We started with a global dream, unlike the typical,

traditional agency where you set up a local office and
then hire 40 people. We learnt the lessons from Infosys
and Wipro and implemented it on ourselves,” says Mahesh
Murthy, CEO of search marketing company, Pinstorm.

And its not that their office footprint are getting global
- they even call their creative teams as ‘delivery teams’.
These agencies have dedicated delivery team a la
software firms that work closely with the business
development/servicing teams of clients who may be
sitting anywhere, Sydney to Stockholm.

No wonder interactive agencies are growing at a

stupendous, over 400% per annum, and expect this kind
of growth to continue for the next couple of years. Asia-
Pacific markets are rich picking grounds for interactive
agencies, owning to high internet penetration amongst
consumers, coupled with a paucity of interactive players.

“Setting up our base there has no real cost advantage to

us. It is the hunger to explore and tap these markets
that driving us there,” adds Rao. Webchutney plans to
bring in big ticket venture capital funding in the next six
months to fund its global expansion plans, with a strong
base in West Asia.

The fear of being

gobbled up by big
global players it seems
is no dampener to
these players. “If we
don’t turn out to be
multinational, we at
least would like to be a
pan Asian,” adds
webchutney’s Rao.
This global-local game
is something that Alok Kejriwal, CEO, contest2win, has
already worked out well.

Even though Disney has bought out the entire stake

holding of Mobile2Win China, the Indian operations in
Mobile2Win India remain independent. In fact Mobile
2Win India seems is still chasing the global run. It
recently inked a deal with Freemantle (its partner for
Indian Idol) to work on Philippine Idol.
“Its time for interactive agencies such as ours to not let
geography limit us. The resurgence of the internet is just
helping our global mindsets.”
COMPANY PROFILE

Type Private
Founded 2004
Mumbai, Maharashtra,
Headquarters
India
Mahesh Murthy,
Founder & CEO
Key people
Ansoo Gupta, Global
Head, Business
Industry Advertising
Internet Marketing,
Search Engine
Services
Optimization, Search
Engine Marketing
Employees 130
Website www.pinstorm.com
Pinstorm is a pay-for-performance digital marketing firm.
Pinstorm is based out of offices in Bombay - also known
as Mumbai - and Delhi in India, along with offices in
Singapore, Malaysia, Europe and the United States. They
service clients in North America, Europe, Australia and
Asia from these offices.

PAY-FOR-PERFORMANCE DIGITAL
MARKETING

Pinstorm has been selected by Red Herring (magazine)

to their list of Asia’s 100 hottest
companies for 2008. Pinstorm and
Lintas Media Group have announced a
significant non-equity partnership.
Designed to push clients to
performance-driven media choices,
the alliance between the two
leading firms in the offline and
online worlds was to put further
pressure on traditional agencies and
media houses.
 APPROACH & SERVICES
Pay-for-performance model: in this model clients don't
pay for the creative or media costs. They pay only in
proportion to the results delivered, through measurable
brand visibility, or through measurable target group
responses. Pinstorm has already done pay-for-
performance campaigns for marketers like Yahoo, HSBC,
Standard Chartered, Jet Airways, Conde Nast and
Canon.

THE TEAM
Mahesh Murthy, founder and CEO, has 24 years of
marketing and communications experience – of which over
14 years are in online marketing. While running digital
marketing campaigns for a charity in late 2003, Mahesh
saw an opportunity to change the basic business model in
advertising and set up Pinstorm with a bunch of great
people to do so.

Ansoo Gupta is the Global Head, Business at Pinstorm.

Having 14 years of experience across marketing and
advertising sales in print, online and television media
across India and South East Asia. Prior to joining
Pinstorm, Ansoo Gupta worked with brands like The
History Channel, National Geographic, Star TV, Channel V
and First City Magazine.
 Pinstorm has a mix of Search Engine Marketing, Search
Engine Optimization & Google Analytics Experts, Client
Managers, Strategists, Creative Minds, Programmers, and
Global Support Staff in Finance, Information Systems,
People Care and Administration.

MORE ABOUT PINSTORM

Pinstorm turned 5 years old on May 1, 2009 and is based
out of offices in Bombay - also known as Mumbai - and
Delhi in India, along with offices in Singapore, Malaysia
and the United States. They service
clients in North America, Europe,
Australia and Asia from these offices.

Pinstorm sees enormous potential in

search marketing – understanding
buyer demand by analyzing search
patterns over time, topic and
geography and matching it to the offerings of our clients
in real time, cost-effectively.
This has required the creation of a set of patent-pending
technologies - from BroadWords® that lets them deploy
campaigns wider and at lower cost than ever before, to
BidWise® to help us bid more intelligently to GeoTrak®
that points out geographical patterns in visitor and lead
behaviour in real time. All available to brand owners in a
pure pay-for-performance model - letting them share the
risk and rewards like few other
marketing firms do.

They deliver results with precise

targeting for clients like American
Express, Sun Microsystems, British
Airways, Qantas, Monster.com,
Greenpeace and others.
PINSTORM
CLIENTS
Banking,
Education

Financial

Services

Media

Non Profit/
Industry
Organizations

Online
Services
Recruitment

Retail &
E-
commerce
Dealer Direct

Technology
Travel &
Hospitality

Survey &
Contests
Lintas and
Pinstorm
tie up for
Digital
Advertisin
g

Pinstorm and Lintas Media Group have announced a

significant non-equity partnership. Designed to push
clients to performance-driven media choices, the alliance
between the two leading firms in the offline and online
worlds will put further pressure on traditional agencies
and media houses. This move is being seen in media
circles as a positive step towards a more evolved phase in
digital advertising.

Lynn de Souza of the Rs1, 800

crores Lintas Media Group said,
“We don’t think that just buying a
digital agency will contribute to
our client’s success. What attracted us to Pinstorm was
their pure adherence to pay-for-performance – a vastly
different model to the commission and retainer
structures that Indian clients are used to. We think this
model can go a long way in bringing accountability and
transparency to investments in advertising.”

The pay-for-performance model was pioneered by Google

and Yahoo, and has been pushed further by Pinstorm,
India’s only MNC digital ad firm, where the agency pays
for the media and the creative – and the advertisers just
pays for results.

Mahesh Murthy, founder of Pinstorm said, “Around the

world, media costs are
going up and clients are
cutting commissions and
retainers because they
are unable to see how
advertising is performing. At Pinstorm, we simply ask the
client to pay for the prospects or results we deliver. Our
alliance with Lintas comes from our joint belief that the
Rs16, 000 crores Indian advertising industry needs a new
model. By working together, pay-for-performance
advertising can be brought into the mainstream of
advertiser choices.”

The alliance estimates that they will be able to drive an

incremental Rs100 crores of advertising to move over
from traditional models to a performance-driven model in
the next 12 months. “Digital advertising accounted for
just 4% of spend in India last year. With this alliance and
other efforts, investments in digital advertising will
cross the Rs1, 000 crores mark, almost 100% growth over
last year” said Murthy.

“An industry only grows when there is pay-for-

performance. For too long have clients worried that their
agencies and publishers are simply recommending higher
media spends because that’s how they earn more. That
era will soon end. Our work with Pinstorm is to
collaborate on clients to give performance-driven options
initially across digital media - but we hope over time to
grow the same basis to traditional media like broadcast,
print and outdoor too” added de Souza.

The Lintas-Pinstorm alliance will first come into effect on

Lintas’ roster of clients and soon expand to other
businesses. Lintas Media Group is among the largest
media agencies in India, managing a spend of over Rs1,300
crores on broadcast, print, outdoor and other media for
clients like Idea, Bajaj Auto, Maruti Suzuki, ITC, Sony,
UTI and Naukri.

Pinstorm is the largest independent digital advertising

firm in South East Asia, with offices in Bombay, Delhi,
Singapore, Kuala Lumpur, Beijing and Santa Clara in
Silicon Valley. It uses proprietary technologies across
search engine marketing (SEM) search optimization
(SEO), email, SMS advertising, online display advertising,
online community creation and blog management to handle
the performance advertising needs of Yatra, Jet
Airways, Taj Hotels, Share khan and HSBC in India.
The alliance is effective immediately and in place across
all advertisers in India.

Facts&
Figures:
 Indian
Advertisi
ng
Industry
Television
 Current size: Rs 148 billion

Projected size by 2010: Rs 427 billion; CAGR: 24%

Subscription revenues are projected to be the key growth driver

for the Indian television industry over the next five years.

Subscription revenues will increase both from the number of pay

TV homes as well as increased subscription rates. The buoyancy
of the Indian economy will drive the homes, both in rural and
urban (second TV set homes) areas to buy televisions and
subscribe for the pay services.

New distribution platforms like DTH and IPTV will only increase
the subscriber base and push up the subscription revenues.
 Filmed entertainment

Current size: Rs 68 billion

Projected size by 2010: Rs 153 billion; CAGR: 18%

Advancements in technology are helping the Indian film industry

in all the spheres – film production, film exhibition and marketing.
The industry is increasingly getting more corporatized.

Several film production, distribution and exhibition companies are

coming out with public issues. More theatres across the country
are getting upgraded to multiplexes. And, initiatives to set up
more digital cinema halls in the country are already underway.

This will not only improve the quality of prints and thereby make
film viewing a more pleasurable experience, but also reduce piracy
of prints.
 Print Media

Current size: Rs 109 billion

Projected size by 2010: Rs 195 billion; CAGR: 12%

A booming Indian economy, growing need for content and

government initiatives that have opened up the sector to foreign
investment are driving growth in the print media. With the
literate population on the rise, more people in rural and urban
areas are reading newspapers and magazines today.

Also, there is more interest in India amongst the global investor

community. This leads to demand for more content from India.
Foreign media too is evincing interest in investing in Indian
publications. And the internet today offers a new avenue to
generate more advertising revenue.
 Radio
Current size: Rs 3 billion

Projected size by 2010: Rs 12 billion; CAGR: 32%.

The cheapest and oldest form of entertainment in the country,

which was hitherto dominated by the All India Radio (AIR), is
going to witness a sea-change very shortly.

In 2005, the government announced three key policy initiatives

which will drive growth in this sector - migration to a revenue
share regime, allowing foreign investment into the segment and
opening of licenses to private players.

As many as 338 licenses are being given out by the Indian

government for FM radio channels in 91 big and small towns and
cities. This deluge of radio stations will result in rising need for
content and professionals. New concepts like satellite, internet
and community radio have also begun to hit the market.
Increasingly, radio is making a comeback in the lifestyles of
Indians.
 Music
Current size: Rs 7,000 million crores
Projected size by 2010: Rs 7,400 million; CAGR: 1%.

The industry has been plagued by piracy and had been showing
very sluggish growth in the physical format over the last few
years, both in India and globally. However, 'mobile music' and
'licensed digital distribution' services are projected
to fuel the recovery of the music industry the world-over.

The pace of growth in mobile music reflects the fact that

consumers increasingly view their wireless device as an
entertainment medium, using those devices to play games and
listen to music, while carriers are actively promoting ancillary
services such as ring tones to boost average revenue per user.
Presently, ring tones (for cellular phone subscribers) constitute
the dominant component of the mobile music market. Licensed
digital distribution services are also contributing significantly to
growth in all regions.
 Live entertainment

Current size: Rs 8,000 million

Projected size by 2010: Rs 18,000 million; CAGR: 18%

This segment of the entertainment industry, also known as event

management, is growing at a fast and steady rate.

While this industry is still evolving, Indian event managers have

clearly demonstrated their capabilities in successfully managing
several mega national and international events over the past few
years.

In fact, event managers are also developing properties around

events. The growing number of corporate awards, television and
sports events is helping this sector.

With rising incomes, people are also spending more on wedding,

parties and other personal functions. However, issues like high
entertainment taxes in certain states, lack of world-class
infrastructure and the unorganized nature of most event
management companies continue to hinder growth of this
industry.
 Out-of-home advertising

Current size: 9000 million

Projected size by 2010: 17,500 million; CAGR: 14%.

Outdoor media sites in India are predominantly owned or

operated by small, local players and are typically, directly
marketed by them to advertisers and advertising agencies.

However, this segment too is witnessing a sea-change with

technological innovations. Growing billboard advertising is fuelled
by technologies such as light-emitting diode (LED) video billboard.

This is a segment that is seeing interesting technological

innovations across the world and is likely to evolve in India too in
the short-term.
 Internet Advertising

Current size: Rs 1.6 billion

Projected size by 2010: Rs 7.5 billion; CAGR: 50%.

An estimated 38.5 million Indians are currently hooked on to the

Internet. And this rising number is leading to the growth of
internet advertising, which today stands at approximately Rs 1.6
billion.

The internet is being used for a variety of reasons, besides work,

such as chatting, leisure, doing transactions and writing blogs.

This offers a huge opportunity to marketers to sell their

products. And, with broadband becoming increasingly popular, this
segment is expected to grow by leaps and bounds.
CONCLUSI
ON
Indian advertising Industry set to rise - no signs of
vertical ad
networks

The Indian advertising

industry is expected to
grow 61% by 2010
(with advertising spend
climbing to Rs. 36,731
crores)

As per report by ZenithOptiMedia, “Expect advertising

expenditure in India to increase from 0.50% of the gross
domestic product (GDP) to 0.53% over the next three
years.”

Worldwide, the ad industry is expected to grow 6.7% to

reach $61 bn and Internet advertising is expected to
surpass magazine advertising; and the upswing will be
triggered by quadrennial events like Olympics, US
elections and Euro 2008.

As far as Indian market is concerned:

• Internet advertising contributes only 1.8 % of the

country’s total advertising spends.
• Internet medium is set to witness 150 per cent
growth in 2008.
For every hundred rupees spent by advertisers, Rs 91 is
spent on television and the print media while the outdoor
media accounts for Rs 5. The rest is divided between
cinema, radio and the Internet. (The Indian
entertainment industry too is expected to grow by CAGR
of 18% to reach Rs. 1 trillion numbers by 2011).

Though these numbers may sound great (and most of the

times theoretical), what is really important and worth
noticing is the rise of ad networks by
newspapers/magazines worldwide (after all they are the
ones who have a strong relationship with local advertisers
as well as readers) which are essentially competing with
ad networks from Google/Yahoo/MSN and online
companies.

The industry is seeing its first flush of recovery, as key

advertisers in sectors such as automobiles, real estate,
financial services and consumer durables begin to report
higher sales.
 REFRENCES

http://www.researchandmarkets.com/reports/221191

http://www.bharatbook.com/Market-Research-Reports/Indian-
Advertising-Industry-An-Analysis.html

http://www.exchange4media.com/e4m/bottombarfiles/Indian-
advertising-industry.asp

http://www.pluggd.in/online-advertising-in-india/indian-
advertising-industry-set-to-rise-918/

http://sasidhar.org/blog/indian-advertising-industry/

http://www.thehindubusinessline.com/2008/05/03/stories/2008
050351010500.htm

www.enil.co.in/radioindustry.html

www.pinstorm.com/

en.wikipedia.org/wiki/Pinstorm

http://www.livemint.com/2008/03/18172710/Lintas-and-
Pinstorm-tie-up-for.html