Future of Advertising in India

Declaration:-

I Biplab Nandi do hereby declare that the study paper entitled “FUTURE OF ADVERTISING IN INDIA” have been declare by me partial requirement for the fulfillment of the course B.B.A (H) under West Bengal University Of Technology do not form any part or in full of any printed material or any other degree. The study paper is the result of original study work done under the guidance of Aliv Sir.

Biplab Nandi Meghnad Saha Institute Of Technology ( Techno India Group) Kolkata April 2010

ACKNOWLEDGEMENT:-

I acknowledge with thanks to the people for assistance and received more respect from them in completing this project.

The attempt of this work wouldn’t have been possible without the help of the couple of the persons whom I would like to thanks for supporting me in completing my project. They are Aliv Banerjee ( Faculty of Marketingin in Meghnad Saha Institute of Technology ) for giving me this opportunity to complete my study paper in this area, Mr. Parasar Banarjee (Faculty of Finance in Meghnad Saha Institute of Technology), Mrs.Manidipa chatterjee (Faculty of HRM in Meghnad Saha Institute of Technology) and Mr. Debraj Dutta ( Teacher in charge of MBA and BBA department in Meghnad Saha Institute of Technology ) and also Mr. Arun Mitra.

I am also thankful to Sampa Mam (Librarian) for providing me with lots of reading materials.

Objectives of the Study Paper:-

• To know what is advertisement and types of advertisement.

• To examine what advertisement can do.

• To know the future of advertisement in India.

• To examine the challenges of advertisement in India.

Advertising :-

Advertising is one of the promotion or communication mix variance.

According to American Marketing Association (AMA)-
“Advertising is any paid form of non- personal and promotion of ideas goods and services by an identified sponsor.”

Advertising is persuasion of sell goods, services and ideas on behalf of the paying person.

Types of Advertising:-

Advertising coverage stands for the classification of advertising.

i. Geographic coverage- International, national, regional and local. ii. Audience coverage- Consumers, Industrial, trade, professional. iii. Demand coverage- Primary, secondary. iv. Action coverage- Direct action, indirect action. v. Target or item coverage- Product advertising, service advertising, institutional advertising. vi. Media coverage- Indoor, outdoor, direct, promotional.

Advertisement can do three things nicely:-

Make customer aware of a brand or product, narrate its USP or function ( in very brief time-may be maximum 30 seconds or half page of a magazine) that may satisfy a targeted consumer need/want or thirdly stimulate short term sales promotion. I doubt if advertising can do much beyond this. I even doubt it can create any of above well enough. Even if that is achieved it is great performance.
It is a fallacy to think that advertising can create brands and cults.
It is also fallacy to think that advertisements can create a fresh desire for instant action on part of buyer like in AIDA theory. It needs lot of field work by sales staff or agents and convincing and follow up. Public relations are rising rapidly as PR is more important than advertising to develop and sustain brands over a long period of time. That is what companies have to bother about. Both corporate and product branding. That only can save them in disastrous market conditions.
Most of the time audience appreciates the musical of ad film or layout of print ad or its sexy models and her vital stats and not even remember which product it was meant for. It is well said often, that , good creative advertisement sells the ad company well and not the product. It then remains reduced to nice piece of art for archives and annual awards.

Products most advertised:-

The range of products that are advertised reflects the socio economic profile of the population and disposable income levels. Low cost repeat purchase consumables dominated advertising in India as they do in most emerging economies.
The first companies to move into new markets in developing countries tended to be in the areas of low cost repeat purchase consumables: cigarettes, fast food, personal products, cleaning products, soft drinks and pharmaceuticals.
The changes in the advertising product profile in India in the 1990s reflect changes in the levels of disposable income.
In Indian include soft drinks, toothpaste, soaps and detergents (1999). In 1992 90% of the most advertised products. were repeat purchase consumables with bath soaps and laundry detergents accounting for 45% of the market. other products included: soft drinks, suitings and textiles, tires, chocolates, cigarettes, tea. The category suitings and textiles, reflected the local custom for people to have their clothes made rather than buying them ready-made but later in the decade this category was no longer a leading product. There was a slight variation in the profile of products advertised on television. In 1993 75% of television advertisements were for 5 major groups of products: toiletries and detergents, cold drinks, foodstuffs, cosmetics and health products. Audience research units at Doordarshan, (the state-owned television station), confirmed that 30.1% of advertising was for toiletries and 21.1% was for food and beverages. Consumer durable advertising was seen to be educating for future consumers at that time.

THE FUTURE OF ADVERTISING IN INDIA

People who are skeptical about the future of advertising in India and predict its demise do not take into consideration that enterprises have a need to communicate with the public. Hence Advertising will continue to be a tool of communication. So, what forms will advertise take in the future?
The answer to this question is that in India, despite the advent of the new media, traditional media will continue to have a large share, as the rural market is still untapped. And in urban market too the traditional media is still a popular means of communication. However, the urban market is also influenced by the new media. As the media through which advertising messages are conveyed evolve, it is important to stress that the fundamentals of effective communication simply need to be adapted to fit these new forms.
Rather than dreary, the future of advertising is bright and unlimited. Marketing professionals are constantly seeking effective means to promote their brands. Advances in computer and communication technologies are opening up immense opportunities for advertising people.
As the rural market is untapped, a definite shift towards the rural is indicated.
The Rural Market in India
The rural market today accounts for only about 6 -7 percent of the total share of ad pic. So, clearly there seems to be a long way ahead.
Time and again, marketing professionals have harped on the potential of the rural market, but few have really focused on it.

The advertising meant to appeal the urban consumer did not touch the hearts and minds of the rural consumer. While this is changing the process is slow. Today, a time has come when the ad copy and concept for rural India needs to be thought in the vernacular.
The greatest challenge for advertisers and marketers lies in finding the right mix which will have appeal to the rural folks. Coca Cola tapped the rural market in a big way when it introduced bottles priced at Rs 5/- backed by Aamir Khan ads. The company on its behalf has also been investing steadily to build their infrastructure to meet the growing needs of the rural market.
Another successful ad campaign that provides a blend of the urban and rural is that of Bourn vita Confidence. The Television ad is a happy blend of the folk music to which the city lad presents steps. It has appeal to both the rural and urban audience. The music is lilting and soulful. And the dance steps equally matching.
Interestingly, the rural market is growing at a far greater speed than its urban counterpart, in certain categories at least. Dealing with rural marketing is a different ball game altogether. It needs the basic understanding of the rural consumer psyche, which is far different from its urban counterpart. Also, distribution remains to be the single largest problem that marketers face. Reaching your product to remote locations in villages where the infrastructure is poor and lower level of literacy are few of the hitches in marketing in the rural areas.
The other challenge is that campaigns have to be tailor-made for each product category and each of the regions where the campaign is to be executed. Therefore, a thorough knowledge of the nuances of language, dialect and familiarity with prevailing customs in the regions is essential.

As compared to the Indian urban society, which is turning into consumerism society, the rural consumer will always be driven by his needs first and will therefore be cost conscious. Nevertheless, the future no doubt lies in the rural markets, since the size of the rural market is growing at a good pace. There is a better scope for language writers who understand the rural and regional publics better. There is also a great scope for specialists like Event Managers, Wall painters, Folk artists, Audio visual production houses.
So, the fact remains that the rural market in India has great potential, which is just waiting to be tapped. Progress has been made in this area by some, but there is a long way for marketers to go in order to reap the maximum benefits.
As companies attempt to reach their consumers more effectively, database marketing, home shopping channels, infomercials and electronic couponing are emerging as the new cost effective way to deliver the message. These new channels of information distribution offer variety, convenience, flexibility and customization. While traditional print and broadcast are becoming more customized too, they have not moved at the pace of these technologies.
The fastest growing new information channel today is the Internet. It offers two - way graphical, world - wide communication and technology oriented early adapters. The users are well educated, upscale individuals who have chosen to access information from a worldwide web. This is the first medium to deliver an almost instant global audience. It is a new form of mass communication and provides users with a new economy of information distribution. Advertising on the Internet has become the most significant new development within the industry.

Advertising will provide the primary source of income for the future expansion of the Internet. Advertising will continue to be an integral part of the economy because it has consistently worked better and cost less over the long run than other alternatives.
The new media represent the future for advertising agency media people. They represent a challenge to academic programs in advertising education; Students will need to be pointed in the direction of new application of existing media planning concepts in advertising. They will need to be involved in developing new ideas about definitions, concepts, measurements and implementation on advertising media. The new media represent opportunities for growth in advertising.
New forms of technology and interactive communication will evolve at a furious pace because now the computer is the tool and process for advertising creative. Concepts will undergo a revolutionary change. Visuals and copy will need to speak a new language. The entire process of conceptualization and technical processing will undergo a sea change. The design, language and context of the advertising message will change. Because of the ongoing technological evolution, the computer is now one of the major devices used in conceptualizing, developing and producing material for both the print and electronic media.
But creative people must beware of the drawbacks that the new media has to offer. Creative people will rely too much on the computerised processes and software. Anyone who has access to the computer can design when in actuality the designer should have basic aesthetic knowledge and skills for the task. The result of this accessibility could be poor designs produced well technically.
The long held rules of advertising design which include formulaic layouts and word counts for print advertising will be relics. Logos, images and text is technologically revolutionized.

Hence, advertising poses a new challenge for the creative people as a new visual and verbal language has to be evolved to suit the new media. Adaptation of technology is the key to handling the new media effectively. Thus there is immense potential in the advertising field. As the new media is working parallel to the print and electronic media as the traditional media continues to be a part and parcel of the advertising campaign.
In India, Advertising is fine, still growing and what’s more a majority of
Indian entrepreneurs are yet to taste the power and benefit of Advertising.
The future of Advertising in India is sound. Indian economy cannot but grow, what’s a few mistakes here and there between friends! And if the economy has to grow, can advertising be far behind. After all, Advertising today is only 0.3% of our GDP. In the US, despite the size of its economy it is 2.5%. And in many small, but advanced countries, it is close to 3.0%. In US, the current ad spend estimate is USD244 billion, which makes it a per capita of USD847. In India, at Rs.8000 crore and even if you take the consuming population at just 200 million, the per capita expenditure works out to Rs. 400 or just 8 USD.
To be fair to the two gurus, perhaps they are swayed by the US which no doubt is an over-communicated-to society and if advertising is in trouble there, we need to take heed, perhaps get jolted, so that we take coursecorrective steps to ensure that we do not fall into the same trap.
Having said that Advertising is fine, thank you, let me also state that there is no room for complacency. We cannot take our act, our art and skill for granted. Change is the catchword today and the only constant today is the accelerating pace of change. To ensure that Advertising expenditure reaches a near 1% of our GDP, over the next few years, it is certain that we cannot continue to practice Advertising the way we have been. We need to change.

Issues and challenges:-
A well made ad can be lost in crowd of ads and clutter if not timed and positioned well. The cost is to be optimized handling conflicting interest of keeping costs low and need to reach wider and deeper audience at the same time and the right type of audience. Media planning has become more complicated by emergence of powerful regional and vernacular channels of communication like newspapers, magazines and TV channels. Thus the cost of national coverage, if done properly may exceed well over Rs 100 millions for one time campaign say for a product launch. If we believe a recent rumor, Reliance Retail plans to allocate INR 3000 Millions as ad budget for 'RelianceMart' their third format- the Hyperstore. A tough going for small firms, therefore, and they have to look elsewhere for promoting their products; Hence search for below-the-line and non traditional means of product promotion including direct marketing and promotional schemes using distribution partners. This definitely is giving sleepless nights to small ad agencies in particular. A need for planning a suitable media mix is thus very important and traditional ad agency work has become marketing communication consulting business in which ad happens to be a part, an important part, though.
Indian advertising industry has gone through rediscovering and restructuring itself acquiring foreign ownerships and alliances. But the caliber of Indian ad agencies has yet to be established and stabilized in volatile markets and dramatic changes in new brands, products, competition and global coverage. Future is for big agencies that have integrated services to offer to the client and work as marketing partners and advisors with strong research arm or a tie up like that with Nelson.ORG etc.

What are the challenges for the PR industry in a market like India?

The great thing about India is its diversity, including its people, cultures, religions and landscapes. This builds the colour and freshness of what we love about India. However, this can also produce its own unique set of challenges for any PR campaign. When developing campaigns for our clients we need to consider the differences between first tier and second tier cities compared to the rural areas, the vast differences in education levels, all the way through to connectivity and technology savvies. What this does do, is to provide the opportunity for us to develop a complete PR program not just focusing on media relations, but including grassroots elements, social media, influencer and stakeholder relations.

Conclusion:-

The whole purpose of advertising is to sell products or ideas, so the massive expansion of foreign companies and advertising, whether coming from overseas or created in India, has meant the massive expansion of the sales of foreign products. In India advertisement has a good future.

Advertising today is only 0.3% of our GDP.

To ensure that Advertising expenditure reaches a near 1% of our GDP, over the next few years, it is certain that we cannot continue to practice Advertising the way we have been. We need to change.

The great thing about India is its diversity for any PR campaign. When developing campaigns for our clients we need to consider the differences between first tier and second tier cities compared to the rural areas, the vast differences in education levels.