In a room filled to capacity with delegates, just one solitary hand went up in response to the query of Sam Balsara, Madison Communications Pvt. Ltd’s chairman and managing director. Balsara asked how many clients (advertisers) were present.
If those attending the conclave—meant to chart out a plan to take the Indian advertising industry to the Rs50,000 crore mark in the next few years—needed a sign of what ailed the industry, this was it. “The very person that advertising agencies have to deliver to is not here today,” said Balsara, proving his point.
That is one of the biggest issues plaguing the advertising industry: the near absence of dialogue between stakeholders on how to take the industry forward. And that is one of the talking points at the Goafest, the second annual awards-cum-festival organized by the Advertising Agencies Association of India (AAI).
Riding on strong economic growth, the Rs16,000 crore Indian advertising industry grew around 23% in 2006 over 2005. That is blazingly fast given that growth was between 8% and 12% in previous years. But it pales in comparison with other sectors as well as its counterparts in other Asian economies such as China and Singapore.
One of the reasons for this relatively slow growth, as cited by some industry players, is the unbundling of the creative and media-buying businesses in the 1990s.
“In a bid to increase remuneration, we fragmented the two services (creatives and media buying). However, that hasn’t worked too well for us as it has also diluted the value (of the work we deliver),” said Bobby Pawar, national creative director, Mudra Group.
Generating value from deliveries was a topic much in focus at the three-day conference, which began on 19 April. “The industry today faces many challenges. On the one hand, advertising has to be more creative and entertaining because the consumer today is much more demanding and also because the media space has become too cluttered and that’s the only way one can get noticed,” said Balsara. “On the other hand, it also has to sell.”
Some, however, argued that the industry itself was responsible for its current status. “While consumers and the media landscape have changed, we (the industry) have not kept pace,” said Meenakshi Madhvani, managing partner at Spatial Access, a media audit agency.
Yet, on the question of moving towards the Rs50,000 crore mark, the panellists were clear that it would happen “in spite” of the challenges that the industry faces currently.
The reason for this optimism is the fast-growing economy and the launch of new brands that, obviously, needed to reach out to consumers.
But it’s not enough to wait for this business to turn up at one’s doorstep. B. Saikumar, CEO, TV18 Media Networks, the commercial and business arm of Television Eighteen India Ltd, said the industry needed to cast its net wide to foster growth. “It’s time the advertising agencies went out and started wooing the small and medium enterprises in India, rather than just focusing on a few well-entrenched companies,” he said.
According to AdEx India, a division of TAM Media Research which tracks advertising trends in the country, the number of advertisers in the country had grown from 78,000 to 1,12,000 in the past two years.
The view of the Indian ad world from the outside seems promising. On Thursdayday, in a video conference from London, Sir Martin Sorrell, CEO, WPP Group, said he was very bullish on markets such as India. More importantly, he echoed the confidence of the panellists, saying there was no reason for the Indian ad fraternity to doubt if it could reach the Rs50,000 crore mark.