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A thesis Submitted to






____________________________________________________________ January -2004


I hereby certify that this thesis entitled THE STUDY OF ADVERTISING AGENCY BUSINESS IN INDIA: - A STATUS REPORT submitted by Shri M.A.Burghate to Amravati University, Amravati for the award of Doctor of Philosophy in the Faculty of Commerce, is a bonafide and original research work carried out under my guidance and supervision. It is piece of research of a sufficiently high standard to warrant its submission to the University for the Award of the said degree. No part of the thesis has been submitted for any Degree or Diploma, or published in any other form. The assistance and the help rendered to the researchers during the course of his investigation in the form of basic source material and information have been duly acknowledged.

Amravati Date: (Dr. S.S. Kaptan) Guide


I hereby declare that the thesis entitled THE STUDY OF ADVERTISING AGENCY BUSINESS IN INDIA: - A STATUS REPORT is the outcome of my research work. No part of this research has been submitted earlier to any Institution or University for the award of any other Diploma or any other Degree, nor the data has been derived from any thesis of any University.

The sources of material, data used in this study have been duly acknowledged.

Amaravti Date: M.A.Burghate Researcher


I am extremely grateful to Dr. S.S.Kaptan, without whose able guidance this thesis would never have materialised .It was his erudite talks, keen interest, knowledgeable and practical suggestions that inspired me to bring out the best. I am thankful to Dr.V.M.Maindarkar for his constant persuasion, personal attention and ever-extended helping hand without which this would have taken much more time. My thanks are also due to Dr. B. B. Taywade, Director of Dr. Panjabrao Deshmukh Institute of Management Technology and Research for the support provided in terms of Library Facility and computerisation at the Institute.

Amaravti Date M.A.Burghate Researcher

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TABLE NO. Table 2.1 PARTICULARS PAGE NO. Evolution of worldwide advertising expenditures 47 from 1990 to 1999 Table 2.2 Distribution of total world advertising 48

expenditure by medium Table 2.3 Table 2.4 Table 2.5 World Top 20 Summary by continents 50-51 52

Ad spend Totals in 1995/1996 /1997(in US$ 53 millions) in Asia

Table 2.6 Table 2.7 Table 2.8 Table 2.9

Latin America (USD million) People On-Line worldwide Online advertising revenue (in USD):

54 55 57

The spread of advertising in the developed and 59 developing world

Table 2.10 Table 3.1 Table 3.2 Table 3.3 Table 3.4

Advertising as a percentage of GDP Vital Statistics: India India in Class Terms Indian Ad Scene Top ten advertiser during 2001-2002

62 105 106 106 109








general 09

communications system. Bar Chart :-2.1 Evolution of worldwide advertising 48

expenditures from 1990 to 1999 Pie Chart No:-2.1 Distribution of total world advertising 49 expenditure by medium in the year 1990 Pie Chart No:-2.2 Distribution of total world advertising 49 expenditure by medium in the year 1999 Bar chart no:-2.2 People On-Line worldwide 2001 56

Bar Chart No:-2.3 Bar Chart No-3.1 Flow Chart no:-4.1 Bar Chart No:- 6.1

Advertising on the Internet for year 2001 Top ten advertiser during 2001-2002 Typical Structure of an Advertising Agency Top Ten Advertising agencies in India

58 110 116 206

ABBREVIATIONS FULL FORM AAAA AAAI ABCI Ad ANA AOL ATM BOB CRM CRT CSR CUTS Dpi DVD EASA FMCG GB GDP IAA ICC INS ISO IT M&As MB American Association of Advertising Agencies Association of Advertising Agencies of India Audit Bureau of Circulations of India Advertisement Association of National Advertisers America Online Automated teller Machine Bank of Baroda Consumer/Customer relationship Management Cathode ray tube Corporate social responsibility Consumer Unity & Trust Society Dots per inch Digital Video Disc European Advertising Standards Alliance Fast moving consumer goods Gega Bites Gross Domestic Product International Advertising Association International Chamber of Commerce Indian Newspaper Society International Organisation for Standardisation Information Technology Mergers and Acquisitions Mega bites


Multinational Corporations /Companies Mahanagar Telcom Nigum Ltd Moorman, Zaltman, and Deshpande Non-government Ogilvy & Mather Oil and Natural Gas Corporation Personal Computer Relationship Management Market Research Agency Total Audience Plan Television rating points United Nations Environment Programme United States Dollar Unique Selling Proposition Value added tax Value for money Watts Wireless application Protocol (Zentralverband der Deutschen Werbewirtschaft), the German Advertising Federation

Creation of a constructive work is often driven by two types of forces. One, artist by being which directs, assists the


present. The other

force is the source

of inspiration.

In this piece of research undertaken by me, the impelling force has been my mother, late


. An


herself, she


always encouraged me to give my best. As a token of respect and admiration, which can never be adequately expressed, I dedicate this research project to her.

Place:-Amaravti: Date:Mukul Burghate Researcher



Advertising is a synonym for consumer choice If you cant tell people what youve done, theyre not likely to buy many of what
youve made. So, you wont go on making them. Youll close a factory or two and a lot of people will lose their jobs. Without innovation driving it forward, perhaps your business stagnates perhaps you go out of business and a lot more people lose their jobs. If youre not making so much, you dont have so much to tell people. You dont advertise so much, so the media which are largely subsidised by advertising suffer. So, what have we got? Better products at lower prices, affordable media and a great number of jobs, all depending on the fact of advertising as a vital part of a mixed economy. And something else. You could argue and I do that advertising is a synonym for consumer choice. Only by knowing whats available out there can the consumer exercise his or her right to choose. And to the consumer it has become a right; not simply an option. IAA Perspectives N39 February 1996 Advertising The link in the chain of supply and demand by Sir Michael Perry, CBE, Chairman Unilever


Advertising activity is a branch of marketing activity because advertising is one of the functions of marketing. Advertising plays an important role in the marketing process and aims at achieving the marketing objectives. Therefore, marketing objective cannot be established without considering the organisational objectives of the business, i.e., maximisation of profits. These two important objectives should be achieved side by side. Advertising activity focuses on the analysis, planning, control and decision making activities of the core institution (i.e. advertiser) in achieving the marketing and organisational objectives. For this purpose, the advertiser directs and supports the development of advertising and media space and time. Many other institutions are also involved in the process such as, facilitating and control institutions-agency, research suppliers, the media, Government and the competition. The management controls and directs all these activities relating to advertising. The various external facilitating and control institutions of advertising management and the meaning, nature and scope, historical perspective and functions of advertising give a view of what the advertisement is.

SOME DEFINITIONS OF ADVERTISING: Advertising" means any writing, printing, painting, display, emblem, drawing, sign or other device, designed, used or intended to be used to advertise products, goods, services, or promote the sale of objects, or attract attention to a place, or lettering for the purpose of making anything known.

Advertising" (including the terms "advertisement" and "advertise") includes the attempt directly or indirectly through publication, dissemination, solicitation, endorsement or circulation, display, including solicitation or dissemination by mail, telephone or door-to-door contacts, or in any other way, to induce a person to enter or not enter into an obligation or acquire title or any other interest in any merchandise or to increase the consumption of it or to make a loan .3.1


Advertising activity is a study of a system of interacting organisations and institutions that play a role in the advertising process. At the core of this system are the advertisers, the organisations and institutions that provide financial resources to support the advertising programme. Advertisers may be public sector or private sector organisations that use the mass media to accomplish the objectives of the organisations. It is therefore, a decision to invest funds in purchasing time and space in such mass media as radio, television, magazines or newspapers that basically distinguishes advertisers from non-advertisers, because advertisers use mass media whereas non-advertisers do not.

Advertising management is focused heavily on the analysis, planning, control and decision-making activities or process of this core institution (i.e. advertiser). The advertiser provides the overall managerial direction and financial support for the development of advertising, and the purchase of media time and space, even though many other institutions are involved in the process. A focal point is the development of an advertising programme or plan for the advertiser. An advertiser who produces several products or services of different kinds, a programme for each product and service may be developed separately. The resulting advertisement is usually aired or displayed or printed several times on the media and resulting schedule of exposure is referred to as an advertising campaign. The development and management of an advertising campaign associated with an advertiser's brand, product or service is thus a major point of departure for the advertising management. In this way, advertising management is one of the management functions that relate to planning, organising, directing, controlling and decision-making of the advertising programme or plan. Once a product is developed to meet target market needs and is properly priced and distributed, the intended customers must be informed of the products availability and value. Advertising and promotion are basic activities in a companys mix. A well - designed promotion mix includes advertising, sales promotion, personal selling, and public relations which are mutually reinforcing and focused on common objective. Of all the elements of the marketing mix, decisions involving advertising are the ones most often affected by cultural

differences among country markets. Consumers reflect their culture styles, feelings, value systems, attitudes, beliefs and perceptions. Reconciling an advertising and sales promotion effort with the cultural uniqueness of markets is the challenge confronting the marketer. The basic framework and concepts of promotion are essentially the same wherever employed. The four steps involved are: Determining the promotional mix: Determine the extent of standardization Develop the most effective messages Select effective media Establish the necessary control to assist in achieving marketing objectives.


Promotional activities such as advertising, personal selling, sales promotion and public relations are basically a communications process. All the attendant problems of developing an effective promotional strategy in domestic marketing plus all the cultural problems must be overcome to have a successful promotional program. A major consideration for foreign marketers is to ascertain that all constraints (cultural diversity, media limitations, legal problems etc.) are

controlled so the right message is communicated to and received by prospective consumers. Communications may fail for a variety of reasons:

A message may not get through because of media inadequacy The message may be received by the intended audience but not be understood because of different cultural interpretations

The message may reach the intended audience and be understood but have no effect because the marketer did not correctly assess the needs and wants of the target market

The effectiveness of promotional strategy can be jeopardized by so many factors that a marketer must be certain no influences are overlooked. Those executives who understand the communications process are better equipped to manage the diversity they face in developing a promotional program. In the communications process, each of the seven identifiable segments ultimately affects the accuracy of the process. The process consists of: (1) An important source an international marketing executive with a product message to communicate (2) Encoding the message from the source converted into effective symbolism for transmission to a receiver (3) A message channel the sales force and/or advertising media which conveys the encoded message to the intended receiving

(4) Receiver consumer action by those who receive the message and are the target for the thought transmitted (5) Decoding the interpretation by the receiver of the symbolism transmitted from the information source (6) Feedback information about the effectiveness of the message which flows from the receiver back to the information source for evaluation of the effectiveness of the process (7) Noise uncontrollable and unpredictable influences such as competitive activities and confusion detracting from the process and affecting any or all of the other six steps. Unfortunately, the process is not as simple as just sending a message via a medium to a receiver and begin certain that the intended message sent is the same one perceived by the receiver. If not properly considered, the different cultural contexts can increase the probability of misunderstanding. Most promotional misfires or mistakes in marketing are attributable to one or several of these steps not properly reflecting cultural influences and/or a general lack of knowledge about the target market. The information source is a marketer with a product to sell to a specific target market. The product message to be conveyed should reflect the needs and wants of the target market. The encoding step causes problem even with a proper message. At this step such factors as color, values, beliefs and tastes can cause the marketer to symbolize incorrectly the message. For example, the marketer wants the product to convey

coolness so the color green is used, however, people in the tropics might decode green as dangerous or associate it with disease. Message channels must be carefully selected if an encoded message is to reach the customer. Media problems are generally thought of in terms of the difficulty in getting a message to the intended market. Problem of literacy, media availability, and types of media create problems in the communications process at this step. Decoding problems are generally created by improper encoding, causing such errors as example Chevrolets brand name for the Nova model, which decoded into Spanish as No Va! meaning, it doesnt go. Errors at the receiver and of the process generally result from combination of factors:

An improper message resulting from incorrect knowledge of use patterns Poor encoding producing a meaningless message Poor media selection that does not get the message to the receiver Inaccurate decoding by the receiver so that the message is garbled or incorrect

The feedback step of the communications process is important as a check on the effectiveness of the other steps. Companies that do not measure their communications efforts are apt to allow errors of source, encoding, media selection, decoding, or receiver to continue longer than necessary. A proper feedback system allows a company to correct errors before substantial damage occurs. In addition to the problems inherent in the steps, the effectiveness of the

communications process can be impaired by noise. Noise comprises all other external influences such as competitive advertising, other sales personnel, and confusion at the receiving end, which can detract from the ultimate effectiveness of the communications. Noise is a disruptive force interfering with the process at any step and is frequently beyond the control of the sender or the receiver. The significance is that one or all steps in the process, cultural factors etc. can affect the ultimate success of the communication. For example, the message encoding, media and the intended receiver can be designed perfectly but the inability of the receiver to decode may render the final message inoperative. In designing an international promotion strategy, the international marketer can effectively use this model as a guide to help assure all potential constrains and problems are considered so that the final communication received and the action taken correspond with the intent of the source. FIG. -I SCHEMATIC DIAGRAM OF A GENERAL COMMUNICATIONS SYSTEM

1.4 M a j o r I n s t i t u t i o n s o f A d v e r t i s i n g M a n a g e m e n t

The focal point in the advertising management is the development of an advertising programme or plan for the advertiser. The resulting advertisement is usually aired or placed several times and the resulting schedule of exposure is referred to as an advertising campaign. In developing an advertising campaign, the advertiser has to deal with several other institutions, which play an important role, apart from his own organisation. There are three types of major institutions. (1) The advertiser himself, (2) Facilitating institutions, which help the advertiser in his advertising campaign such as the advertising agency, the media and the research suppliers, (3) Control institutions that interact with the advertiser's decision-making activities in numerous ways. The Central Government and competition are two main control institutions. 1) THE ADVERTISER The advertiser is the core institution of the field of advertising management and the total expenditures by all the advertisers in the country provide the basis for determining the size of the advertising industry. Total expenditures involve the expenditure by all advertisers in all media (radio, TV, magazines, newspapers, etc.) but do not include the amount of non-paid advertisement by non-profit organisations and classified advertisements in local newspapers purchased by non-business persons.

Advertisements may be classified as small or large according to the degree to which they use the facilitating institutions. By typical large national advertisers, we mean those who buy time and space under contract through one or more advertising agencies and buy numerous research services, as well as conduct research on their own. In general, they make full use of the advertising system. Small-scale advertisers, on the other hand, use only parts of the system due to their limited resources. They include private citizens and local small-scale advertisers. Some- times they buy media time and space directly and to not use an advertising agency or the services of a research supplier. Advertisers may again be classified on the basis of markets they serve, the goods and services they produce and the media they use. On this basis, they may be consumers, industrial and retail advertisers. Consumer advertisers are those who manufacture consumable goods-durable or non-durable and services. Industrial advertisers predominantly manufacture market products for industrial market. The retailers advertise locally for store patronage. On the basis of media used, the distinction is clear-cut. Retail advertisers use newspaper advertising, particularly at local level. Consumer advertisers make extensive use of radio, television and consumer general magazines. Industrial advertisers most often use the trade magazines, journals, business papers, direct mail exhibition and trade shows. Non-business or non-profit organisations, such as schools and colleges, hospitals, clubs, churches, libraries, etc., generally use local advertising. They have many of the same problems as business firms. They also must identify their

needs; the groups they serve develop products and services to satisfy their needs, and communicate with their constituencies. This communication can be effectively done by advertising. Thus, there are several types of advertisers and an equally large number of forms of advertising. 2) FACILITATING Institutions Facilitating institutions are such organisations, which support the advertiser in analysing, planning and development of the advertising campaign. Usually, there are three such primary institutions-advertising agency, media and research suppliers-the advertising agency and research suppliers assist the advertiser in analysing opportunities, creating and testing advertising ideas, and buying media time and space. The media, .of course, supply the means by which to advertise. All advertisers, by definition, use some form of advertising media. Small advertisers, very often contact the media directly because of their financial limitations but where significant media expenditures are involved, the advertiser uses the services of an advertising agency and one or more research suppliers. A) THE Advertising Agency The advertising agency in most cases make the creative and media decisions between the advertiser and the media. It also often supplies supportive market research and is even involved in the total marketing plan. In some advertiseragency relationships, the agency acts quite autonomously in its area of expertise, whereas in others, the advertiser remains involved in the creative and media decisions, as the campaign progresses. In the beginning, the agencies were

service agencies and offered no creative help to advertise. Their main function was to select the media for the advertiser. The agencies grew, in size and influence through the years as they demonstrated an ability to create effective advertising, because they offered a number of services in creative field to their advertisers. Although the nature of an advertising agency has changed considerably, the method of compensation remains the same, i.e., a fixed percentage of advertising billing, which they receive from the media owners, the percentage is 15 per cent on billing but it can be increased if extra services are provided by the agency. A modern advertising agency employs three different types of people, in addition to those handling administration. The first group is 'creative services group' and includes copywriter, artists, and people concerned with advertising production. The main function of this group is to develop the advertising campaign, prepare the themes and create the actual advertisement. The second group is 'market services group' which is responsible for media and market research and contains technical specialists. The third group is' client services group' including account supervisor. This group is responsible for the contract with the customer and settle the deal for the agency. An agency that provides all those services may be called as full service agency. In recent years, an alternative of full service agency has been developed in smaller specialised group carrying only specialised services in creative field

B) THE MEDIA The media supply the means by which to advertise. The first and perhaps the largest media category has been newspaper since the development of printing press .The earliest agencies, in mid-nineteenth century were essentially agents for newspaper. Magazines are one of the media in print advertising. Industrial advertisers mostly use trade journals and other trade magazines. Recently, the broadcast media TV and radio have gained the attention of advertisers being mass communication media and are mainly used by national advertisers on the national network. Local advertisers or retailers also use this media for advertising from local radio stations to serve well-defined segments of the population, various types of promotions can also be considered by the advertiser as a different kind of media. In this category are included premiums, promotions, contests, sampling, and cash refunds, display materials on points of purchase and organising trade shows. C) RESEARCH SUPPLIES This type of facilitating institution is made up of supply research services to advertisers, advertising agencies and the media. The main thrust of such supplier is to conduct research in the various fields-market, consumer, media, creation and methods for assessing the effectiveness of the media-concerning advertising and supply different types of information to advertisers, agencies and media which help them in advertising planning and taking specific decisions such as copy and media decisions

3) CONTROL INSTITUTIONS Control institutions are those, which interact with and affect the advertiser's decision-making activities in numerous ways. Government and competition are two main external control institutions. A) GOVERNMENT Almost in every country of the world, the Government interferes in the trade activities in various ways. Wide range of regulations concerning advertisers' products, services and advertising affect advertisers to a great extent. The creative activities of advertisers will also be affected by the nature and impact of government regulations. For example, if the Government deals in the advertiser's product, it shall be viewed as a competitor and the nature of copy, message, theme, etc., will be quite different, B) COMPETITION Competition is another control institution. Direct and indirect competitions are usually present and serve as a major external control. The advertiser will have to think over what competitors do, while developing an advertising campaign and adopt a suitable strategy in copy development. It is also important for an advertiser to note what and how they react. It will help understand the competitors' strategies and the advertiser thus may improve his copy strategy. What competitors do and how they react are thus important parts of advertising management. The consumer or the market has been assumed as yet another kind of external institution that both facilitates and control advertising. Without an existing or

potential target for advertising messages, the rationale for advertising would not exist. The consumer is a controlling force, mainly through a whole range of behavioural possibilities such as, viewing or not viewing, buying or not buying, voting or not voting and so forth. It is the consumer around whom the whole advertising industry revolves-the advertiser's agency, media and research supply. The identification and understanding of markets and consumer behaviour are thus also vital parts of advertising management. To conclude, advertising management studies the managerial functions concerning advertisements, various facilitating and control institutions 1.1.


Intense competition for world markets and increasing sophistication of foreign consumers has led to a need for more sophisticated advertising strategies. Increased costs, problems of coordinating advertising programs in multiple countries, and a desire for a common worldwide company or product image have caused MNCs to seek greater control and efficiency without sacrificing local responsiveness. In the quest for more effective and responsive promotion programs, policies covering centralized or decentralized authority, use single or multiple foreign or domestic agencies, appropriation and allocation procedures, copy, media and research are all being examined. One of the most widely debated policy areas pertain to the degree of advertising variation necessary form country to country. One view sees advertising customized for each country or region because every country is seen as posing a special problem. Executives

with this viewpoint argue that only way to achieve adequate and relevant advertising is to develop separate campaigns for each country. At the other extreme are those who suggest that advertising should be standardized for all markets of the world overlooking regional differences altogether. Its evidence that companies may have overcompensated for cultural differences and modified advertising and marketing programs for each national market without exploring the possibilities of a worldwide standardized marketing mix. After decades of following country-specific marketing programs, companies had as many different product variations, brand names and advertising program as countries in which they did business. An example is the Gillette Company that sells 800 products in more then 200 countries. Gillette has a consistent worldwide image as a masculine, sportsoriented company, but its products have no such consistent image. Its razors, blades, toilets, and cosmetics are known by many different names. Example Track II blades in USA are more widely known worldwide as G-II, and Astra blades are called Contour in Europe and Asia etc. Gillette Astra and Track II blades

CREATIVE CHALLENGES Advertisers from around the world have developed their skills and abilities to the point that advertisements from different countries reveal basic similarities and a growing level of sophistication. To complicate matters further, boundaries, are placed on creativity by legal, language, cultural, media, production and cost limitation. LANGUAGE LIMITATIONS Language is one of the major barriers to effective communication through advertising. The problem involves the different languages of different countries, different languages or dialects within one country, and the subtler problems of linguistic nuance and vernacular. CULTURAL DIVERSITY The problem of communicating to people in diverse cultures is one of the great creative challenges in advertising. Communications is more difficult because cultural factors largely determine the way various phenomena are perceived. International marketers are becoming accustomed to the problems of adapting from culture to culture. Knowledge of differing symbolism of colors is a basic part of the international marketers encyclopedia. Color is a small part of the communications package, but if the symbolism in each culture is understood, the marketer has an educated choice of using or not using various colors. Knowledge of cultural diversity must encompass the total advertising project.

MEDIA LIMITATION Its mention that limitations on creative strategy imposed by media may diminish the role of advertising in the promotional program and may force marketers to emphasize other elements of the marketing mix. Creative advertisers in some countries have even developed their own media for overcoming media limitations. In some Asian countries, advertisers run vehicle up and down the town playing popular music and broadcasting commercials as they travel. MEDIA PLANNING AND ANALYSIS Although nearly every sizable nation essentially has the same kinds of media, there are number of specific considerations, problems and differences encountered from one nation to another. The primary areas an advertiser must consider in advertising are the availability, cost and coverage of the media. Local variations and knowledge of market data provide fertile areas for additional attention. Availability One of the contrast of advertising is that some countries have too few advertising media and others have too many. In some countries, certain advertising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent media in radio and television broadcasting. In many countries there are too few magazines and newspapers to run all the advertising offered to them. Conversely, some nations segment the market with so many newspapers that the advertiser cannot gain effective coverage at a reasonable cost.

Cost Media prices are susceptible to negotiation in most countries. Agency spare discounts are often split with the client to bring down the media cost. The advertiser may find the cost of reaching a prospect through advertising depends on the agents bargaining ability. The per-contract cost varies widely from country to country. One study showed the cost of reaching a thousand readers in 11 different European countries ranged from $1.58 in Belgium to $5.91 in Italy. Coverage Closely akin to the cost dilemma is the problem of coverage. Two points are particularly important: one relates to the difficulty of reaching certain sectors of the population with advertising and the other to the lack of information on coverage. In many world marketplaces, a wide variety of media must be used to reach the majority of the markets. In some countries, large numbers of separate media have divided markets into uneconomical advertising segments. The global market has expanded manifold in the last few decades. More and more products are being launched practically everyday. The companies are engaged in cut-throat competition to highlight their products to the forefront. The more innovative the advertising, the better is the market. Herein enters the glamorous field of advertising. Advertising is actually brand building through effective communication and is essentially a service industry. This requires the help of the media to reach more and more people to communicate brand effectiveness. Mainly the task of advertising lies with the advertising agencies who are accredited to the Indian Newspaper Society (INS) who in turn releases the

advertisements in the newspapers, magazines, television, radio or any other mass media. A career in advertisement is quite glamorous but the dazzling advertisements, which we view; involve a lot of hectic work hours and commitment. The reputation of any ad agency depends on the effective work being done and campaigns being released at the right time, to encompass maximum viewership. With more and more agencies, opening up every day the work has become more challenging. At present, there are about 550 accredited agencies in India, but there are several hundreds, which are not listed and are working on their own. The tremendous growth in this industry has dramatically increased the career opportunities in this field. The salary structure in advertising is quite high and if one, have the knack for it and, can slog it out, then one can command the price. Like most of the fields, the industry has been male dominated but the modern educated women are matching up to the standards. There is no dearth of job opportunities in this field and adequate qualification will open up wide horizons for both men and women alike.



It is becoming more and more evident that consumers are increasingly interested in the world that lies behind the product they buy. Apart from price and quality, they want to know how and where and by whom the product has been produced. This increasing awareness about environmental and social issues is a sign of hope. Governments and industry must build on that. Klaus Tpfer, Executive Director UNEP, 23 August 1999, UNEP News Release 1999/2000

CHAPTER NO-II Role of Advertising in Business

2.1 INTRODUCTION Sustainable development is meeting the needs of the present without compromising the ability of future generations to meet their own needs.3.2 While this is the classic, definition, it has proved hard to operationalise, and does not communicate well to the man in the street. Perhaps more down to earth, and more aspirational definition is that used by the United Kingdom Government: sustainable development is about ensuring a better quality of life for everyone, now and for generations to come3.3. The focus on improving quality of life is becoming more widely accepted by governments, companies, civil society organisations and others, and includes the concepts of economic development, social responsibility and environmental protection. If sustainable development is about improving quality of life for everyone, now and for generations to come, then advertising can contribute to sustainable development both through what advertising does, and the way that it does it. 2.1.1. WHAT ADVERTISING DOES? Advertising helps consumers facilitate consumer choice. World Business Council for Sustainable Development (WBCSD) listed seven keys to success needed for markets to move in the direction of sustainability.

The seven keys to success sustainability through the market:

1. innovate, 2. practice eco-efficiency, 3. move from stakeholder dialogues to partnerships for progress, 4. provide and inform consumer choice, 5. improve market framework conditions, 6. establish the worth of Earth, 7. make the markets work for everyone, Clearly, advertising has a vital role in key 1 helping innovation, and key 4 providing and informing consumer choice. By communicating messages to a wide range of audiences about products, services, consumer behavior, companies, social programmers, government and the priorities and so on, advertising can help improve quality of life. These are positive, business building, opportunity areas for advertising, and includes: promoting products and services that can really improve quality of life such as health products and services. This area is particularly relevant in developing economies, where product campaigns often include health education and awareness raising; providing social or environmental messages, that whether as part of corporate or public service campaigns such as the United Kingdom Are you Doing your Bit? campaign, which has focused on energy saving; promoting products which have particular environmental or social benefits; promoting more sustainable use of existing products - such as the Wash Right campaign to promote more efficient use of detergents;

promoting sustainability attributes (environmental, social and/or economic) of companies.

2.1.2 HOW ADVERTISING DOES IT? Advertising also contributes to sustainable development through how it does it the responsible way that it operates. Key areas of focus are: ensuring truth in advertising the advertising codes provided and supported by the advertising industry, and other mechanisms ensure that claims can be substantiated, to prevent consumers from being misled; ensuring ethical behavior from advertisers, so that messages are legal, decent, honest and truthful; ensuring that all sectors of society, including women, minorities, the elderly and children are sensitively portrayed; how advertising agencies, and the advertisers themselves, operate.

As with all other sectors, organisations in the advertising industry need to address their direct effects on the environment and society, and the need for environmental management systems, reporting and corporate social

responsibility programmes. This study looks both at what advertising does, and how it does it. It considers both the contribution that advertising can make to sustainable development, and the key challenges ahead.

2.2 THE ADVERTISING SECTOR To define the sector, let us look first of all at the breadth of activities that are covered by the definition, and put the advertising practice context within the marketing of products, the so-called marketing mix. The advertising development process and the place of advertising in a free economy is described later in this study. Advertising is an activity practiced by everyone, from the person who wants to sell his car or to offer piano lessons, through to the multinational manufacturer selling his products. However, even this spectrum of salesrelated uses of advertising is too restrictive. A large part of the job of advertising is to impart information and to provide education on everything from pensions to AIDS prevention, hence the fact that governments are among the very largest users of advertising in most countries. Charities, environmental groups, and other special interest organisations use advertising to plead their case, to win support, or to pursue aims that they believe will improve quality of life in the widest sense. If the roles and uses of advertising are varied then so too are the resources, both amateur and professional that can be considered to be advertising practitioners. The advertising that we are most aware of is normally, but not always, produced for advertisers by advertising agencies of varying kinds. The agency role is one that we have to keep in mind as it accounts for the performance of the sector.

The advertising sector covers a very wide spectrum .The activities that it includes are - ranging as they do from the tiniest classified newspaper advertisement to a TV spot, from a small leaflet to a massive outdoor sign, from a message on the Internet to a letter delivered to ones door, or a sponsored cultural or sporting event. The advertising sector is therefore a tripartite one involving advertisers, advertising agencies and media owners, which in general are almost very dependent on advertising. It is now more usually referred to as the communications sector, in order to be as all-embracing as possible, but we will use the convenient term advertising in this study. It should be obvious that to generalise about advertising is futile and will not take us closer to defining the effect that it has had and may have in the future, on the development of sustainability. Advertising is a part, a significant, but not always the major part, of a complete process that may end with selling goods or services. It is therefore almost impossible, as will be seen later, to discuss the role of advertising in sustainable consumption in isolation from the role of every other factor, which influences the way goods are brought to market, sold and consumed. It should be clear that, whereas one can isolate production processes, raw materials sourcing, distribution channels and virtually every other step in the delivery of goods to consumers, to examine them for sustainability, advertising does not yield easily to examination in this way. Very little of this research has been devoted to examining sustainability within the creation and production of

advertising. The essential practices of advertising are inherently very efficient as will be discussed later. It is possible to argue that as one of the main intermediaries between manufacturers or suppliers of services and end consumers, advertising is an essential part of any discussion of how to achieve the aims of more sustainable consumption. The advertising industry does not regard progress towards greater sustainability as in any way threatening to what they do. They know that their business benefits from, and indeed can only be successful with, consumer trust. Ultimately, what is good for consumers benefits the business of advertisers and of advertising agencies and the media that depend on their expenditure. As Klaus Tpfer, Executive Director of United Nations Environment Programme (UNEP), has made clear, sustainability is not about consuming less, it is about consuming differently. However, to successfully discuss the role that, advertising for manufacturers and service providers can play in sustainability, it is essential to first define clearly the role which advertising plays in the overall marketing mix. THE MARKETING MIX Advertising is one of the tools of marketing and is indivisible from other elements, which contribute, to the production and sale of goods and services. It is normal to describe this as a marketing mix, which is represented by the five Ps: product the physical and performance characteristics of the product,

promotion including advertising as one of many communications disciplines, place meaning distribution and displayed availability of the product, packaging including all outward styling aspects of the product, price or more accurately, a value-for- money

All of the disciplines usually referred to as marketing communications within the second P of promotion. These disciplines include: media advertising, media planning and buying, sales promotion which has developed to include point-of-sale, events sponsorship, direct marketing which has more recently evolved into Consumer Relationship(CRM), public relations, which has tended to be regarded somewhat separately from the rest. Within these disciplines a wide range of specialist professional consultancy services have sprung up, which is generically refer to as agencies. Within the marketing of any product or service, any of the tools of the marketing mix may be the dominant element that drives development. Advertising is certainly a powerful tool in particular when applied in technical combination with some of the other tools and disciplines.

For example, confectionery and snack products have always been regarded as distribution-led, with advertising sometimes playing no more than a role in maintaining product category in which purchasing awareness and providing information on new products. The huge development of mobile telecoms was stimulated by lifestyle changes and initially led by product, that is size and design of cell phones. Later it developed into the mass- market led by price (pre-pay). Again, the role of advertising was simply to bring the product and price aspects to consumers attention. In some cases, advertising is by far the dominant element of the mix and this tends to be where there is little real product differentiation. Jeans and fashion wear is a good example, where advertising first turned Levis Jeans from artisan wear into fashion market. In fact, advertising goes further than this in many categories, especially those where the performance or appearance of products is very similar. This is especially so in heavily regulated sectors like cars, or where categories in have reached maturity and real advancements come more slowly. In these cases, advertising can provide the differentiation and product satisfaction that consumers are looking for. In most categories of goods and services, the basic rational attributes, which people want, are remarkably similar and in well-regulated markets, most brands satisfy them. It is advertising that allows people to choose products for a wide range of emotional reasons, even for the fact that the brand is noted

for its commitment to the environment! Among these reasons are the brands ability to fit itself to ones lifestyle and individuality. To be able to relate products to lifestyles, an important skill of advertising people is to be close to consumers and to understand their needs, wants, desires and values, and to transport that information back to manufacturers. The late Stig Carlson, former Director General of the European Association of Communications Agencies captured this by saying: Advertising does not change values or create new values, but it is very skilled in detecting new values among consumers and to reflect them in its creative solutions. To do this, advertising agency people have to stay very much in tune with consumer trends and desires. Failure to do so results in the decline of brands. The purpose of research conducted by advertising agencies is to understand consumer trends and desires and then to reflect what they have learned in creative ideas. Advertising is thereby instrumental in bringing new products and their attributes to the attention of the public. Likewise, advertising can play an important role in promoting culture, history, health, justice, environment and other issues for a specific or general audience.

2.3 THE ADVERTISING DEVELOPMENT PROCESS The process by which advertising is created is led entirely by the advertiser, who determines the need for advertising to solve a particular business problem and is responsible for all key decisions in the process. He also pays for it.

The advertiser will usually brief an advertising agency to prepare proposals, and advertisements only appear on his behalf when approved to do so. The agency role is to propose solutions to the brief they are given, but depending on the client and the business environment, an agency might often be expected to volunteer advice on wider brand related subjects. The agency will normally be expected to ensure that proposals adhere to all relevant codes of practice and their contract might contain indemnity clauses to protect the client, although this does not usually extend to legal issues, as the client normally retains legal responsibility. Most of the actual filming, photography, or production is contracted to specialist suppliers, with the agency controlling the process in cooperation with the client. Either the same agency, or another specialist, will recommend a media list and make bookings when approved. Selection is based on a combination of costeffectiveness of the audience coverage of the medium and creative considerations involving the needs of the message that is to be carried and editorial environment. The media owner is not normally involved in the design of anything other than small classified advertisements, but in most countries he has a responsibility to be a guardian of good taste and reject any advertising he feels is unsuitable for his readership or audience. He is normally also able to reject advertising on any other grounds like a no-tobacco policy, or any personal prejudice. There are sensible and economic limits to this role and for the purposes of this study, the media owner has not been considered as a key influencer of advertising content.

To do otherwise might take the discussion into murky areas of ethics. Similarly, it is not acceptable for advertisers to seek by any means to influence editorial content. Advertising is a part of free society and a free, competitive economy. The writer of For and Against Advertising, published by ZAW (Zentralverband der Deutschen Werbewirtschaft), the German Advertising Federation, notes that Wettbewerb (competition) contains the root werben (to woo, in the old sense; to advertise in the modern). Advertising is an integral part of selling, a part of marketing, with its cost built into the whole operation. It is an integral part as the packs which identify and protect products or the vehicles which distribute them.

2.4 THE BENEFITS OF ADVERTISING i) Price Price is one of the best outcomes of competition within a free market. Far from advertising adding to the price of a product, given an effective production line and well considered marketing, the reverse is true. Advertising reaches a larger market, and moves products quickly so that production can take place on a larger scale, thereby affording the possibility of either reducing unit costs and prices or improving quality and value or both. A typical modern example of this is the packaged holiday. Prices have been going down and down, the direct result of advertising, marketing and competition bringing about mass usage and a lower price. This phenomenon has

not eliminated choice, however the consumer can still buy a superior, more expensive package if that is wanted. It comes as no surprise, records ZAW in For and Against Advertising, that a worker in the Federal Republic had to spend two months wages for a refrigerator in 1950, but today needs only two weeks wages. This is also true today of cars, washing machines, furniture and innumerable other goods. There are many case studies to illustrate the point that a reduction in advertising would result in failing sales and rising prices. One such, describing the introduction in the United Kingdom of Marvel dried milk, which in 1979 sold 6,000 tonnes a year at 25p per tin, concludes: If we were to reduce advertising, we confidently predict that sales would fall to 4,000 tonnes. The cost per tin then needed to justify investment would be 26p; and at 2,000 tonnes the cost would rise to 29p. At this level, the whole operation would have to be cancelled. In short, if we stopped advertising the price would have to rise; had we attempted to introduce the product without advertising we would either have been forced into charging an uneconomic price or have been faced with a non-viable payback period on the investment. Advertising is essential to create and maintain a satisfactory level of demand. Consumers benefit from the economies of scale, which the capital investment achieves, providing the plant is fully utilised.

ii) Greater variety of product Variety, and hence choice, is another off-shot of competition. It is competition, which gives rise to a better product, an improved product or a new idea. Is it

possible, however, for the newcomer with new ideas to break into the market? It is easy enough theoretically, at least for the established manufacturer to introduce a new idea to the consumer. Can the newcomer also get a chance?

The answer is Yes, he can and does. Stephen King in Advertising as a Barrier to Market Entry (The Advertising Association, 1980) writes that it is often suggested that heavy advertising by the established companies constitute one of the barriers to entry. The prospect of advertising costs, too, is seen as a potential barrier but, as he points out, it is far from the only one. There are substantial barriers of low potential profitability, capital investment, patents, the need to be better and different and the efficiency of competitors. Stephen King also notes: Advertising for established brands is not a barrier to entry in the sense of an unfair restraint, which prevents new advertisers from trying to enter a market. On the contrary: by building reasonable profit margins in the market, it makes the idea of entry more attractive to them. However, he continues, In the sense of contributing to the efficiency of established brands, advertising means that the new brand must be efficient too. New ideas are the stuff of life; a vigorous society welcomes them and, in spite of barriers, it gets them. One has only to think back a relatively few years to be impressed by the wealth of new product ideas that have influenced our lives: man-made fibers, kitchen tissues, non-stick pans, electronic typewriters, videos, detergents, home computers, microwave ovens, electronic fund transfer, portable phones and many others.

All of them were new in their time, yet they all stood the test of being subjected to trial in the market place through the medium of advertising. New products challenge established ones; new advertisers challenge the large and established manufacturers and to do so, they have continually to be innovative and must communicate the advantages of their products to their customers.

iii)Unwanted products? Does the freedom to produce new ideas and new products and the freedom to advertise them mean a proliferation of unwanted products? Yes, it does. Some are so unwanted that a very high proportion of them never reach the market, and many of those that do subsequently fail. Yet the freedom to fail and the freedom to succeed are built into our way of life. The failure of some products is the price paid for the success of one. And that one is the one that has proved itself to be wanted by consumers on a continuing basis. The fastest way to kill a poor product is to advertise it heavily, as many advertisers have, to their cost, discovered. iv) Better products The more intensively a good product is advertised, the quicker it will succeed. If the product is a good one, consumers will rapidly discover that it lives up to the promises of the advertising. The Indian washing powder market provides one answer to this question. Intensive advertising has been endemic in this highly competitive market for

decades. Heavy advertising of rival brands has had its critics. Yet what has happened? In their own interest, it has been necessary for the manufacturers to improve their products, to give them a better argument in their advertising. The result is that today the consumer has a wide choice of infinitely more versatile and efficient washing powders than could be had 20 or 30 years ago. In short, experience in a free market economy shows that nothing is more stimulating than having two companies with two equally good products on the market.

V) Consumer power Without advertising support, whole product areas decline into commodity trading with price and availability the only selling criteria. This ultimately takes power out of the hands of the consumers and places it with large retail groups, which are able to dictate what people will buy and who will make it, and at what price.

vi) Innovation Innovation is built into the competitive forces, which produce better products, and advertising is the natural outcome of innovation. It takes brains to invest in it. If it is speedily to claim its right to a place in the consumers life, advertising is essential. Advertisements bring the news to the consumer rapidly and efficiently, to his or her benefit and to the benefit of the manufacturer.

vii) Media choice and editorial freedom An important by-product of advertising is in allowing a vast range of media to exist, free of political control. Most TV stations, newspapers and magazines are substantially supported by advertising. Specialist media in professional areas or serving minority groups, children or special interest groups exist thanks to advertising.

viii) Cost repaid It cannot be stressed too strongly that advertising only works when it earns more than it costs, whatever is spent. What is earned may take different forms: it may be in goods sold or in resources saved the saving of lives or reduction of injuries as a result of a road safety campaign, for example. The beneficial effects, whether social or commercial, must always outweigh the advertising cost in the marketing mix.

ix) Competition needs advertising In a competitive society, however, where the supply of money, but not the supply of goods, is controlled by the state, the outcome of competition is variety. Advertisements are the main means of telling the consumer about a product and giving him or her a reason for buying it. All advertisers try to supply a good, acceptable reason for buying a product. Sometimes that reason has to be extra persuasive. Competition based on price alone will not enhance the prospects of a more nutritious product for the consumer. Added value, in other words, can justify a higher price and make it worthwhile in the eyes of the consumer.

2.5 SUSTAINABILITY AND ADVERTISING This section looks at the role of advertising in consumption, corporate social responsibility sustainability. Concepts such as over-consumption and under-consumption have been discussed for many years. Discussions had occupied many disciplines within society and had ranged from issues related to justice and equality to economic growth and basic needs. It received a place on the sustainability agenda of the United Nations in Chapter 4 of Agenda 21: Changing Consumption and Production Patterns. At the 1997 Rio +5 Earth Summit meeting the United Nations in New York, governments recommended that business, including the media, and advertising and marketing sectors, help shape sustainable consumption patterns. UNEP has been the main inspiration behind the implementation of this recommendation.5.1 Corporations and business organisations have struggled with this issue as much as or maybe even more than any of the other stakeholders involved. The WSCSD has been leading the issue of sustainable consumption and production within the private sector and rephrased the effort to sustainability through the market The majority of the activities under the banner of sustainable consumption and production have focused on the production side. Product innovations, new materials, labelling have supported the more sustainable production and and possible business opportunities arising from

distribution of products. The sustainable consumption side of the equation is often led by non governmental organisations promoting for example more equal distribution of resources and access to products, less consumption, and increased awareness about the environmental and social impacts of (over)-consumption and waste. The advertising sector plays a particular role in this discussion in that it is often seen as a driving force behind increased consumption and because of its direct contact with consumers and society in general. This, however, is an inaccurate view of the effects of advertising that have been consistently shown not to have an independent influence on category size or growth in mature markets. An assessment of evidence was published by the United Kingdom Advertising Association under the title Does advertising affect market size? and was edited by Dr Simon Broadbent . 5.2 The facts surprise many, even within the advertising sector, but it is easy to see why of advertising alone does not drive consumption. The subject has been comprehensively covered in academic studies, and a key conclusion is that most advertisers spend money to fight for share within a sector. Few have such a dominant share that they can afford to try to stimulate category growth.

It is a fundamental marketing principle that growth in mature market sectors comes only from significant changes in fundamentals like the price, productbased developments or lifestyle alterations.

Where consumer trends and lifestyles lead change in demand, sectors can grow or shrink. In both cases advertising spend mirrors this with investment going out of the declining sector into the growing one as advertisers fight for share. In these cases the increased advertising investment might help to accelerate growth, but attempting to kick-start growth in the absence of a clear consumerpurchasing trend will be economically unrealistic. It is this fundamental principle, which means that consumption at a category level cannot be reduced by simply reducing advertising.

2.5.1 CORPORATE SOCIAL RESPONSIBILITY (CSR) Corporate social responsibility is a particular issue within the sustainability debate that is rapidly gaining momentum and increased attention. There is no single and commonly accepted definition of CSR, though it is often used in the same context as sustainable development. It is a framework for types of issues where a company is seen as having certain obligations towards society at large, because of direct or indirect effects of its business operations. Issues such as the environment, bio-diversity, business ethics, gender diversity, labour conditions and child labour are examples of areas that are usually included as elements in the CSR debate. For a wide variety of reasons, CSR has rapidly gained access to many boardrooms in the corporate sector much of this is driven again by consumer awareness and societal pressures. However, many companies have discovered the value of social responsibility as part of their brand value and to make current

and future employees appreciate the company they work for. This creates a role for the advertising sector similar to the one discussed above. An Arthur D Little survey of 481 executives worldwide published in 1999 found that 95% of managers believed that sustainable development offered real business value and 75% said that companies would have to make the required adjustments in vision and strategy. But only 19% said that their companies were well down the road in making such changes.

The Millennium Poll is the largest global survey ever made of CSR. When asked how they form their opinion of individual companies, nearly 50% mention factors related to CSR, such as labour practices, business ethics, environmental impact and responsibilities to society at large. One in three mention attributes related to business fundamentals (for example, financial factors, company size, business strategy or management) and four in ten mention traits like brand quality, corporate image or reputation. Globally, over 20% of the citizens claim that they actually avoid products from a specific company or speak against the company to others, because of their view that the company does not behave responsibly. Another 20% report having at least considered doing so. There are large regional differences in consumer activism, with over 50% of the respondents in North America having actually taken action against one or several companies, against 14% of the respondents in Asia.

The Millennium Poll on Corporate Social Responsibility is a survey involving representative samples of 1,000 citizens in each of 23 countries on 6 continents a total of 25,000 interviews world wide, conducted during May 1999. Each national poll, fielded by a respected research institute, is accurate within 3%, 19 times out of 20. Environics International conducted the Millennium Poll in collaboration with The Prince of Wales Business Leaders Forum in London and The Conference board in New York. 2.5.2 BUSINESS OPPORTUNITIES Advertising agencies represent a link between producers and consumers. They have an influence on the communication strategies of their clients, and their communication skills and creative talents represent an important asset to help detect shifts in consumption patterns and mobilise alternative business opportunities. Such talent and knowledge has been missing from sustainable development efforts to date. This provides a window of opportunity for the advertising sector to quickly become a major player in the sustainable development arena. Environmentally conscious consumers in developed countries (educated, affluent and mainstream) represent the most desirable consumer target. The increasing awareness among global consumers about environmental and social issues offers business opportunities in both domestic and export markets. Consumers are demanding more from their purchases, in terms of environment, social responsibility and others ethical considerations. While this is primarily a phenomenon of the western world, the knock-on effect is being felt in

developing economies. The challenge for the advertising sector is to lead the change when opportunities arise. 2.6 ECONOMIC DIMENSIONS ADVERTISING ADVANCING THE ECONOMY Advertising has a similar place in the economy as other service sectors such as management consultants, banks, insurance companies and financial brokers. Advertising is an important aspect for corporations in their development and prosperity. Increasingly advertising is also used by public authorities and nongovernmental organisations. Advertising and other forms of commercial communication are fundamental to the success and effectiveness of numerous companies and organisation. Consumers and commercial buyers are demanding more and more information about products and services in order to make their purchasing choice. Competition thrives on advertising, and advertising thrives on competition. Indicative of the growing importance of the advertising sector world wide is the year 1998, 3.4 which claims that advertising as global expenditures (including in developing countries) increasing faster than the world economy, suggesting that the sector is becoming one of the major players in the development process. The reality, as we will see, is that in the last ten years, advertising has grown by only 24% in real terms. .

2.6.1 ADVERTISING EXPENDITURE Those who believe advertising expenditures are growing at a higher speed than the world GDP should be reassured. This is not the case with a growth of 24 % in ten years. Figures for 2001 will show a decline of about 5% due partly to decline of the new media and Internet sector, which was responsible for most growth in recent years. Table 2.1: Evolution of worldwide advertising expenditures from 1990 to 1999 Year In current USD Million 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 182,479 184,366 208,410 198,163 219,877 245,337 259,849 267,810 274,719 290,139 In constant USD Million 212,793 206,328 226,287 209,033 225,978 245,337 252,526 254,331 256,746 265,452 Compared with 1990=100 100 97 106 98 106 115 118 119 121 124

Source: World Advertising Trends 2001, World Advertising Research Centre, A division of NTC Publications Ltd


300,000 250,000 200,000 150,000 100,000 50,000 0 In current USD Million

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Table 2.2: Distribution of total world advertising expenditure by medium (in % - total = 100) Year 1990 1999 Print 55.6 48.3 TV 31.7 38.3 Radio 7.6 8.9 Cinema 0.3 0.3 Outdoor 4.7 4.2

Source: World Advertising Trends 2001, World Advertising Research Centre, A division of NTC Publications Ltd



0.3 4.7 Print TV Radio Cinema Outdoor





0.3 4.2 Print 48.3 TV Radio Cinema



Main changes are the shifts between print advertising and TV advertising. TV advertising is increasing due to a higher number of commercial channels

and the fact that many public broadcasters opened their channels to advertising in order to be able to cope with important increases of costs of programmes. Radio is taking a bigger part of the overall expenditures due to the multiplication of radio broadcasters mainly at local level.

Table 2.3: World Top 20 (USD million)

Indices Country 1990 1995 90,291 39,124 21,993 1999 120,022 33,561 20,037 1990 100 100 100 1999/1990 162 128 147

United States 73,969 Japan Germany United Kingdom France* Italy Spain Canada Australia Mexico Brazil China Netherlands Argentina Hong Kong South Korea 11,858 9,296 6,373 4,423 4,868 3,805 914 2,295 423 2,342 620 863 2,351 26,279 13,660

12,816 10,137 5,185 4,717 4,153 4,386 1,720 4,966 1,687 3,444 3,229 1,954 4,918

17,091 9,665 7,092 5,315 5,055 4,734 4,440 4,354 4,158 3,884 3,231 3,049 3,029

100 100 100 100 100 100 100 100 100 100 100 100 100

144 104 111 120 104 124 486 190 982 166 521 353 129

Russia Switzerland Belgium Austria Total

N/A 2,372 1,096 1,189 168,996

376 2,923 1,713 1,674 221,406

2,921 2,611 1,986 1,937 258,172

100 100 100 100

N/A 110 181 163

* The case of advertising expenditure in France is interesting to analyse. At the first sight, an increase of 4% from 1989 to 1999 seems difficult to accept. The reality is that the years 1989/1990 are peak years (until the Gulf War), 2000 being another peak year. Between 1991 and 1998, growth rates of advertising expenditures fluctuated between 2% and 5 % per year. This shows also how difficult it is to compare such statistics knowing that most local currencies vary against the USD which is taken here as the common advertising currency.
Source: World Advertising Trends 2001, World Advertising Research Centre, a division of NTC Publications Ltd

In ten years, the advertising expenditures of the 20 main markets have increased by 52%. At first sight this figure looks impressive, but reality shows that the increase varies from +4% to 982%. The main part of the increase is due to the economic growth in countries such as China, Mexico, Argentina, India, or Hong Kong. In developed countries the growth of advertising expenditures is mainly due to new advertisers in the telecom business as well as banks and insurances. However telecom in particular has since receded in 2000/2001 and will show negative growth in next published figures.

The following table (table 2. 4) giving the figures per continent shows important differences in the growth of advertising expenditures. Latin America, the Middle East and even Africa show important increases. There are important differences in advertising trends within regions. The box below (table2. 5) illustrates trends in Asia. Table 2.4: Summary by continents (USD million) Indices Country North America Europe Asia Pacific 59,543 36,948 75,769 62,367 12,006 1,759 1,805 86,509 55,601 17,011 1,844 2,368 145 150 311 249 654 1990 79,416 1995 95,642 1999 126,806 1999/1990 160

Latin America 5,469 Africa Middle East 740 362

Source: World Advertising Trends 2001, World Advertising Research Centre, a division of NTC Publications Ltd

Table 2.5: Ad spend Totals in 1995/1996 /1997(in US$millions) in Asia

1995 1996 1995/1996 % changes 1997 1996/1997 % changes

Japan South Korea

64,103 52,935 6,525 6,739

-17.4 3.3

47,730 3,204

-9.8 -52.5

Hong Kong Taiwan Thailand Indonesia India Philippines China Malaysia Singapore Vietnam



12.4 -6.4 22.3 18.9 7.4 26.2 42.4 -2.1 -0.9 66.1

2,637 2,843 987 645 1,353 1,085 3,698 708 782 111

20.1 56.8 -47.0 -63.7 3.7 -14.8 208.4 -11.9 4.5 7.8

1,937 1,813 1,522 1,861 1,495 1,778 1,215 1,305 1,009 1,273 842 821 755 62 1,199 804 748 103

Source: Asian Advertising and Marketing, April 1996; April 1997; March 1998

Table2. 6: Latin America (USD million) Indices Country Mexico Brazil Argentina Venezuela Peru Chile Costa Rica Honduras 1990 914 2,295 620 439 178 240 68 N/A 1995 1,720 4,966 3,229 922 N/A 622 145 49 1999 4,440 4,354 3,231 1,386 896 580 179 123 1999/1990 486 190 521 316 503 242 263 NA

Uruguay Ecuador Total

61 145 4,960

137 101 11,891

161 76 15,426

264 52 311

Source: World Advertising Trends 2001, World Advertising Research Centre, a division of NTC Publications Ltd

Advertising flourishes where the economy is growing. In order to use advertising to promote products, a minimum purchasing power is needed. Below a certain level of income, advertising has no real role to play. In recession periods, as the one hitting the United States and Europe at the end of 2001, advertising budgets were cut drastically. They would only go up if economic growth reappears, which re-affirms advertisings place in following consumption, rather than leading it.

2.6.2 ADVERTISING IN THE NEW MEDIA (INTERNET) According to Forrester Research, advertising According to NUA Internet Surveys

, produced by Scope Communications group in August 2001, a little

more than 513 million people are connected on line around the world.

Per region the figures (Table 2.7) are the following: Table 2.7: People On-Line worldwide Africa Asia Pacific Europe Middle East Canada States Latin America World total 25.33 million 513.41 million and the 4.15 million 143.99 million 154.63 million 4.65 million United 180.68 million


600 550 500 450 400 350 300 250 200 150 100 50 0

In Million

Africa Europe Canada and the United States World total

Asia Pacific Middle East Latin America

They also report that total online advertising revenue increased from USD 100 million in 1995 to USD 5.8 billion in 2001 and is expected to reach USD 15 billion in 2003. Table 2.8: Online advertising revenue (in USD): 1995 1996 1997 1998 1999 0.10 billion 0.39 billion 0.94 billion 1.90 billion 3.00 billion

2000 2001 2002

4.4 billion 5.80 billion 7.70 billion

In 2001, advertising on line still represents only 2.15 % of the total advertising expenditure. According to Forrester Research, advertising on the Internet will reach USD 20 billion in 2004. The figures per continent will look as follow:

United States Europe Asia

USD10.5 billion USD2.8 billion USD1.2 billion



12 10 8 6 4 2 0 USD billion United States Europe Asia

Table 2.9: The spread of advertising in the developed and developing world Top ten countries in advertising expenditure as a share of GDP, 1996 Country Advertising as Education as a % Total a % of GDP of GDP advertising expenditure Columbia United Kingdom New Zealand Hong Kong South Korea Venezuela United States Taiwan, China Brazil Australia 2.6 1.4 1.4 1.4 1.4 1.4 1.3 1.2 1.2 1.2 3.4 5.51 6.4 2.8 3.7 5.0 5.4 NA NA 5.4 (USD billion) 1.4 6.6 1.0 2.2 6.7 1.0 101.2 3.4 8.2 4.7

Source: UNDP Human Development Report, 1998

HOW LARGE IS THE ADVERTISING COMPONENT IN A PRODUCTS PRICE? Varying somewhat per type of product, the advertising costs part of the product purchased is between 2% to 4% of the price paid by the consumer. A relatively minor sector of advertising is represented by luxury products such as perfumes, which may have an advertising cost of up to 20% of the products price.

2.6.3 ECONOMIC IMPACT OF ADVERTISING a) Labour Unfortunately no statistics are at hand regarding the number of people employed in the advertising sector. What is important to know is that: most employment in this industry is at medium and high level and that average wages and salaries are higher than the average in most countries; employment is given, of course, by advertising agencies and their suppliers (printers, photographers, models, TV and film producers and many others) as well as by the persons in charge of selling media space in newspapers, magazines, broadcasters, outdoor, Internet) and of course the persons in charge of marketing and advertising activities within the commercial and industrial companies. the number of people employed varies greatly according to economic

circumstances. The depression in advertising during 2001, will almost certainly have led to a decline in people employed in the main agency networks of 5% to 10%.

b) Advertising is the oil of the economy As a part of the overall cost of supplying goods and services, as seen earlier, advertising accounts for a very minor part. In most case the percentage of this element of the cost remains under 3% and represents much less than the distribution costs, as an example, and very much less than the VAT or purchase tax imposed by governments. What is less known is that advertising contributes in a very important way to the general decrease of the selling price of products? By informing customers of the existence of products through advertising, larger quantities are sold and produced. Mass production decreases the cost prices and permits cheaper prices. Highly developed countries do not always show high levels of advertising expenditures compared with the GDP, compared with less developed countries. What is sure is that poor countries have low rates of advertising expenditures. Commercial communication tools, which are mostly directed to a mass audience, can only play its role when there exists a large middle class in the population.

Table 2.10: Advertising as a percentage of GDP

Main countries United States Japan Germany United Kingdom France Italy Spain Canada Australia Mexico Brazil China Netherlands Argentina Hong Kong 1990 1.29 0.88 0.91 1.21 0.78 0.58 0.90 0.85 1.29 0.37 0.50 0.11 0.83 1.84 1.15 1999 1.29 0.77 0.95 1.24 0.67 0.61 0.89 0.78 1.20 0.92 0.89 0.42 0.99 1.14 1.92 Some selected countries 1990 Colombia Philippines Costa Rica New Zealand Peru Venezuela South Africa Oman Saudi Arabia India Indonesia Turkey Qatar Jordan Uruguay 1.27 0.77 1.19 1.37 0.52 0.90 0.67 0.11 0.13 0.27 0.33 0.33 0.15 0.17 0.73 1999 1.77 1.75 1.59 1.40 1.37 1 .33 1.00 0.18 0.24 0.39 0.50 0.51 0.28 0.45 0.76

Source: World Advertising Trends, NTC Publications, Henley-on-the Thames (1996 to 2001)

III) THE CONTRIBUTION OF ADVERTISING TO THE ECONOMY: makes volume sales possible, therefore significantly lowering price; stimulates competition, leading to product quality improvements; assists new market sector entrants, providing greater consumer choice; helps the development of new markets and emerging economies; encourages research and development by making it possible to recoup costs through sales over a viable period; helps maintain diversity of retail channels; breaks commodity trading, by allowing manufacturers to achieve price premiums for better products and reinvest in new ones; provides employment in a wide range of allied industries including media, printing, film and video production.

2.7 SOCIAL DIMENSIONS OF ADVERTISING The social relevance of advertising is much debated, which given its relatively high profile is not surprising. Possibly the most massive contribution which advertising makes to society is to make more products affordable to more people, by making volume sales possible for manufacturers and information available to consumers. Beside that contribution, the occasional complaint that advertising creates discontent by showing products which some cannot afford pales into insignificance.

This section covers, the role of advertising in social change, its use of language, advertising and the vulnerable, origins of needs and wants, persuasion in advertising, the sectors commitment to truth and decency, issues surrounding reinforcing stereotypes and advertising to children. A) SOCIAL CHANGE Over many years, pressure groups have tried to influence advertising so as to bring about social change. The morality of attempting social engineering through advertising or any other means is always going to be contentious, but as far as advertising professionals are concerned it is mostly unachievable. The view inside the business is that social trends are forces vastly more powerful than advertising and that to set promotional funds against the way that consumers are going is futile. It is a fundamental truism that no matter how much it costs to alter perception of say an out of date brand, to make it relevant to modern consumers, it is at least theoretically achievable. The reverse however, altering lifestyles to suit the product, has to be something, which no professional would take seriously. Feminists railed at advertising for many years during the 1970s for depicting women in traditional domestic roles, which conflicted with the image they wanted to present of the new woman. It was advertisings tendency to mirror society, which irritated these groups and to some extent they did succeed in persuading advertisers to show women in a new light. However, the major influence was clearly exerted by the target consumers themselves. Women living a traditional homemaker life

resented being depicted in that role and simply preferred to see themselves in a more liberated role. Many advertising concepts are pre-tested amongst the target consumers. Ultimately this testing, and the many focus groups which are organised during the creation of advertising, are consumer democracy in action. Consumers themselves censor advertising and agencies and researchers pass what is learned back to the advertiser. When advertising agencies sense that something has become, if not a trend, then something which consumers can relate to, they are quick to reflect it in advertising. In fact leading advertisers have claimed that the most valuable thing that agencies can bring them is insight. An example of how agencies have sensed not the social desirability, but the social acceptability of a new social dimension, is in their portrayal of multiracial situations. Advertising in all parts of the world, the United States, South Africa, the United Kingdom and elsewhere has routinely shown a social mix at all level which simply does not exist in real life for most people. This was evidenced by the recent United Kingdom Cantle Report into origins of racial tension, which concludes that, even in this long-established multiracial society, many communities operate on the basis of a series of parallel lives. However the vision of integration has not just become politically correct, but very acceptable to the majority of consumers, even if it does not describe reality for them today.

To some extent it must be true that advertising has helped to normalise such scenes and thereby to encourage them. We will discuss how this might apply to sustainability later. In making media diversity a reality and freeing information from state control, advertising helps to spread and defend democracy. In developing markets, advertising has helped to bring education and entertainment to towns and villages, which have never seen TV. Mobile cinemas toured India as long as 40 years ago, showing films and promoting products like Dettol disinfectant and Disprin analgesic, along with washing and household products. There are many entertaining sponsored shows in India, which promote and educate about products like Eveready batteries, maize products, soap and washing powder and Vaseline. Education can play a large part especially in promotion of healthcare products and in stressing the advantages of hygienically packaged foods like Dalda cooking fat. Clearly these are commercial enterprises and the aim is to promote products, however they represent real social benefits, which are very valuable to people in rural India. Urban populations similarly benefit from sponsored educational radio and TV programmes covering a wide range of subjects. However to discuss the role of advertising and especially TV advertising in isolation from programme content is to entirely miss the point. People turn on a TV to watch programmes. They follow programmes, talk about them with friends, enjoy and emulate them. There can be no comparison between the

influence exerted on lifestyles and cultures by advertising and programme content. Kum-Kum, Kasuti Zendagi ki, Kahani ghar Ghar Ki and soap operas are phenomena which command attention far beyond that paid to advertising. It is far more accurate to say that programme content influences advertising, as we have seen with the use of soap stars in advertising campaigns. Advertising in general tries hard to reflect local lifestyles in order to establish relevance of the product. 60% of TV commercials shown in India are locally made. The inevitable question is whether advertising undermines local cultures and promotes western values to the detriment of indigenous ones? Again, the answer seems to come own to whether one sees high standards of living as particularly western or as something aspirational for all. Advertisers have learned how sensitive consumers are and that to try and force them to alter their culture or preferences is futile. Every act in advertising which is not in line with established consumer cultures is likely to be expensive, ineffective and unproductive. B) USE OF LANGUAGE Quite frequently, advertising standards bodies get indignant complaints about the way advertising misuses language. On the whole, these protesters overlook the fact that advertising has to attract attention and involve people in a way that will be quickly understood, so it must use words vividly, colloquially and in such a manner that they will stir the imagination of the reader or viewer. The protesters also ignore the fact that language can never stand still: for example, the use of

pinta for a pint of milk, which first appeared in advertisements, now appears in the Oxford English Dictionary. There is a widespread concern in India about the threat to language and local cultures posed by multinational media. The advertising industry believes that advertising will always mirror rather than condition society, and that a nations rich, cultural plurality will continue to be reflected in a plurality of media. Far from standardising language, advertising often exploits differences, as in the case of United Kingdom where it has been fashionable for advertising to use Newcastle or Scottish accents and phrases. The effect of advertising on use of language is usually short-lived. Throughout 2000 people across the world picked up and used the word whassup? Apart from the fact that the word originally came from a short film, not from advertising, it was noticeable that by the end of 2001, it was decidedly unfashionable to say whassup? The Mumbai street language (Thanda matlab, Coca-cola), Hinglish language and many others are used by advertisers because they exist already and offer a means of communication with consumers.

C) ADVERTISING AND THE VULNERABLE CONSUMERS It is a fundamental requirement of advertisings self-regulatory codes of practice that no advertiser should seek to take advantage of any characteristic or circumstance, which may make consumers vulnerable, by exploiting their credulity or their lack of experience or knowledge. Children

are inexperienced consumers. Other vulnerable groups include the fat, the deaf, the ill, the ugly, the poor, and the socially or physically inadequate. The special care merited by such groups is reflected in the specialised rules which apply when particular groups of people are being addressed or when particular kinds of products slimming aids and hearing aids, for example are being advertised. i) Needs and wants Does advertising sell people things they dont need? People can become very righteous when they talk about needs and wants. The extension of the argument is that it is acceptable to grow vegetables but not roses. We need vegetables, but roses are an unnecessary luxury. Put thus bluntly, the falsity of the argument is revealed. We need both because peoples needs are both rational and emotional. Ultimately the consumer, almost regardless of income level, decides what they want or need and they resent having their needs programmed by those who feel they know better. Complaints to competent advertising regulation authorities from individuals who have bought something they didnt need are almost unknown. This leads to the question: is the so-called defenceless consumer a reality or a myth? What part does persuasion play in the acceptance of successful products? ii) Persuasion in advertising The myths of the hidden persuaders and defenceless consumers diehard. The defenceless consumer is shown time and time again to be far from defenceless.

All the evidence is that consumers are not only very aware that advertisers are partisan, but also that they are well able to take a balanced view of advertising claims. iii)Truth and decency in advertising Advertisers in developed markets realised many years ago that their investment in advertising was only worthwhile in an atmosphere of trust with consumers. Advertising which is not believed is unlikely to be effective. They also realised that the cost of making a sale is such that it is uneconomical to have to persuade consumers every time they buy. The concept of creating brand loyalty was born. It was clear that promises, which are not delivered by the product, would result in disappointment, which would not result in repeat sales. It was also clear that deception by any one brand could threaten the marketing environment for all brands. Therefore, advertisers came together with media owners to create codes of practice and regulating authorities that could stop misleading or offensive advertising. At the same time it was recognised that a legal framework was needed to ensure that intentional deception could be punished and that consumers could seek redress if they had been cheated. This is not the place for a full discussion of the relative roles and strengths of laws and codes. One can say however that most authorities recognise that self regulation, in the shape of codes of practice, are able to be more responsive to changing consumer needs, trends, and to media and other developments and are able to give wider protection than laws are able to.

Such codes are in place in most developed markets and responsible advertisers will press for them to be put in place everywhere and for them to be enforced by competent authorities. The Association of Advertising Agencies of India (AAAI) and Code of Advertising Practice Committee are usually quoted as a model for this type of safeguard. The AAAI is funded by a levy on media advertising and its representation includes all stakeholders, including consumer groups. On the international stage, codes published by the International Chamber of Commerce (ICC)5.4 are widely respected and form the model for many local codes. Also at this level is the European Advertising Standards Alliance (EASA)

, which deals with cross-border complaints. A recent case

illustrates how the organisations work together. Typical codes are broad and offer special protection for children and vulnerable groups. They contain many specific sections relating to particular product and service areas and cover standards of decency, portrayal of women and contentious areas of that sort. A further control at the international level is provided by the International Organisation for Standardisation (ISO)5.6 , which in its ISO 14021 provides guidelines for environmental claims, whether in packaging or in advertising. It must be stressed that all responsible advertisers are not only content to be guided by these codes, but feel that they gain from the effective regulation of advertising claims, which apart from protecting consumers, protect themselves from unfair competition. It would be wrong to say that everything

is perfect in advertising, and we have to remain vigilant, especially in countries where the rules are not as effectively applied as they might be. The Indian organisation Consumer Unity & Trust Society (CUTS) has published a review of Green Advertisements, which it claims were not substantiated by manufacturers, in line with ISO 14021. This study would urge, all governments to see that such self-regulation is not only in place, but is seen to be effectively applied. iv) Reinforcing stereotypes: Women The ways in which women are portrayed in advertisements tend to fall into two groups: shown in a traditional and therefore primarily household role, women shown simply decoratively or as an attention-getter rather than because she is relevant to the product. The first issue fails to recognise the fact that the majority of women still fulfil a household role (often in addition to other roles) and that a high proportion of products advertised are used by women when performing this role. That is why father is often presented as the breadwinner and mother as the dishwasher, even though there are now plenty of women who are the key breadwinners and many husbands who do the washing-up. Until the majority of men go out alone to do the household shopping, for instance, the advertising of many household goods will continue to be directed to and through women performing their family role. This trend is now changing and more and more

advertisements show men doing things, which were traditionally done by women. The second issue takes us into the realms of what is and what is not decent. It does not follow that any representation of an attractive woman in an advertisement is tantamount to offering a promise of sexual gratification - any more than does the portrayal of an attractive man. On the other hand, such complaints are upheld on occasion. The portrayal, for instance, of a naked woman in an advertisement for industrial machinery is arguably inappropriate or offensive. Whether it is also indecent depends on the way she is depicted and the nature of the headline and copy. The whole question of the portrayal of women in advertising is clearly a sensitive one and, because the self-regulatory system reacts to changes in public attitudes, several countries have looked, and are looking, carefully at the whole question. At the time of writing, most codes find that their general rules on taste are sufficient to deal with any problem. It is useful to note that the United Kingdom Advertising Standards Authority reports in December 2001 that complaints about portrayal of men in advertisements have increased by ten times in six years. Surveys by the Institute of Marketing and London School of Economics indicate that advertisers are now leaning too far towards womens views and are reflecting derogatory male clichs. However, it must be said that they are doing so in support of products aimed at women and are not expecting too many men to form a lasting attachment to their brands.

The Advertising Federation of Australia (AFA) has recently introduced a Code of Ethics

, covering a wide range of grey issues within the business and

specifically tackling the subject of stereotyping. The advice given to people designing advertisements is: Respect all people. No stereotypes please. Individuals should be understood, not portrayed in a way that could bring disrespect. Use humour, but avoid cheap shots. The code has been approved by all members of the federation and has been strongly promoted to employees with trade advertising, email, a booklet and materials like mouse mats and mugs. v) Advertising and children Most industrial and commercial companies believe that children are as entitled as adults to receive information about products that are of interest to them. Without advertising, this information will not be available. Childrens only information source will be advertisements for brands, especially adult brands, which are not relevant to their needs. These brands may be not only irrelevant to children; they may be positively harmful, even illegal. Children have a right to information about childrens products. Advertising is a part of a childs normal environment. It plays a part in the childs development process by equipping children with the necessary knowledge and skills to act as responsible consumers in later life. It is everyones responsibility, including advertisers, to help children familiarise themselves, over time, with the world in which, as adults themselves, they will live.

Advertisers believe that childrens advertising must be responsible. It must not misuse childrens relative inexperience. It must recognise that children do not mature at the same age and acquire consumer skills gradually. Childrens advertising should therefore be designed for them, for their needs, and with their very special circumstances in mind. It is a parental responsibility to determine the level of family exposure to the media, and to the advertising that the media frequently carry, whether it is traditional, such as TV, or new, such as the Internet. We believe that parents are in the best position to decide how their children should access the media as a function of each childs individual development. The self-regulatory systems, and the International Chamber of Commerce (ICC) codes that are an integral part of these systems, promote responsible advertising. They are a major factor in providing a high level of protection for all. ICC codes include specific provisions on advertising to children. National selfregulatory codes, based on ICC, are established, policed and enforced by local self-regulatory organisations and industry in over 100 countries. The ICC code and its national codes are reviewed regularly, to ensure that they are an appropriate response to local, cultural and consumer concerns and that best practice is promoted. We also support regional mechanisms, such as EASA and condemn legal bans, which exist in several countries as misguided and counterproductive.

2.8 CORPORATE SOCIAL PERFORMANCE Starting at the other end and trying to identify the engagement of consumers in social performance of corporations, a clear increase in attention can be noticed. The trends summarised below were identified in a global consumer survey, the earlier mentioned Millennium Poll , the first of its kind. Forty per cent of 25,000 consumers around the world reported that during the past year they have responded negatively to actions by companies perceived as not socially responsible. Half of this number, or one in five worldwide, reported avoiding a companys product or speaking out against it to others. Worldwide a majority of consumers (almost six in ten) take labour practices, business ethics, responsibility to society at large, or environmental impact into account when forming opinions about a company. In the survey, almost 90% of consumers agreed that large companies should do more than just focus on profitability. Two in three citizens in 18 of the 23 countries surveyed believed that companies should go beyond their historical role of making profits, paying taxes, employing people and obeying all laws; they should contribute to broader societal goals as well. In the United States, more than three quarters of all consumers hold companies totally or partially responsible for avoiding bribery or corruption; keeping operations and supply chains free of child labour (89.8%); preventing

discrimination; protecting worker health and safety (95.4%); and not harming the environment. It is clear that much needs to be done in terms of communication. Consumers are interested in what their purchases contain, where they come from, and the impact they have on their immediate environment. This information needs to be communicated in an effective, simple way. Advertising agencies have a clear challenge ahead in trying to communicate these issues effectively and link them to business opportunities and brand value. The information that consumers need varies from place to place. In industrialized countries, the emphasis is on promoting less environmentally damaging choices. In developing countries, consumers often need to know how to protect themselves from direct threats, such as pollution. For Europeans according to a more general EuroBarometer poll on consumer policy the safety of food is their particular concern (68%), but more than one third thinks that food is not safe (35%) also because there is not enough information. With regard to advertising, the general perception is that insufficient attention is drawn to the safety of products and services for the consumer (67%). i) Stakeholder engagements A major opportunity for advertising agencies lies in convincing their clients that they need to be visibly accountable to all their stakeholders, and to all publics that have an interest in how they conduct themselves. First and foremost, companies need to communicate the information they have that helps to promote the sustainable aspects of their products. They might also wish to

communicate that they are taking their social and environmental responsibilities seriously. Communicating on issues related to sustainability is often a vehicle for them to settle or improve brand image, to install their reputation or to participate actively in public debate. Indeed, such campaigns do not necessarily aim at selling more products, but have become a part of some corporations strategies to get involved in issues of genuine concern to their customers. The advent of the Internet has provided an easy and convenient way for companies to put disincentive for advertisers to embrace detailed information on their values, their responsibilities and their commitments to issues like the environment and sustainability where everyone can reach it. The Internet requires people to want to know sufficiently to bother to access the information. It is not intrusive, so it does not inform and educate in a proactive way. It is therefore not surprising that the extent of commitment of companies to these issues is widely underestimated and misunderstood. If agencies believe that companies need to build a store of consumer goodwill and not just to react in a pious manner when some unfortunate event occurs, then they need to take the message to their clients that this job has to be done in the media, through PR, events or paid-for advertising. There is an old rule that consumers are not interested in advertising that is about corporate issues that have no immediate relevance to them, but creative people have proven time and again that the skills they possess can overcome this. There have been many great corporate advertising campaigns, but examination of

expenditure patterns reveals that companies dip in and out and lack consistency, or they address just government and influencer groups rather than the general public. BP and Shell have found creative ways to make corporate advertising interesting in recent years. Some companies have reported that they are afraid to make their commitments obvious in this way because of those, which have been clear that this is a twoway road and consumer and environmental groups must give support where it is due. No one can endorse use of advertising to green-wash companies who are not deserving; however excessive targeting of individual companies can be disincentive for the advertiser to embrace sustainable issues publicly. In that environment they may also act as a disincentive for agencies to encourage clients to adopt more sustainable platforms in advertising.

2.9 FINDINGS FROM THE MILLENNIUM POLL citizens in 13 of 23 countries think their country should focus more on environmental and social goals than on economic goals in the first decade of the new millennium; in forming impressions of companies, people around the world focus on corporate citizenship ahead of either brand reputation or financial factors; two in three citizens want companies to go beyond their historic role of making a profit, paying taxes, employing people and obeying all laws; they want companies to contribute to broader societal goals as well;

actively contributing to charities and community projects does not satisfy peoples expectations of corporate social responsibility there are many issues of more interest to citizens in countries on all continents; fully half the population in countries surveyed are paying attention to the social behaviour of companies; over one in five consumers report either rewarding or punishing companies in the past year based on their perceived social performance, and almost as many again have considered doing so; opinion leader analysis indicates that public pressure on companies to play broader roles in society will likely increase significantly over the next few years.

Advertising reflects quite well emerging trends and tends to reflect them, rather than actually creating them. Advertising is an indispensable educational tool. It is a powerful means of providing important information to consumers in order for them to make informed purchase decisions. The more that the consumer is exposed to the claims of competing providers of products and services, the better educated and sophisticated the consumer becomes regarding such issues as these products features, benefits and relative value. Successful free market economic systems are based on this kind of competition. Advertising is the only means of guaranteeing media plurality and independence, in that it makes possible the dissemination of differing views, advertising is an important guarantor of democracy.

Advertising is generally well regulated by voluntary codes and real deception is dealt with adequately by laws. Advertisers respect and rely on codes of practice, which are able to be far more all embracing than laws and much easier to vary according to changes in circumstances. Where adequate codes and regulatory bodies are not in place, or are not effective representative, advertising organisations like WFA, AAAA, EACA, IAA are there to see them made to work effectively.








SOCIETY: provides information on products, services, jobs, enabling informed decisions by citizens; provides a platform for competitive democratic elections; enables charitable institutions to support themselves independently; through advertising sales revenues, supports independent and diverse media choice and underwrites cost of a substantial proportion of programming; promotes causes and social issues from healthcare to education, safety and sustainability; through advertising and sponsorship makes mass access to diversity of sport, arts, music, and other cultural possible at lower cost; is enjoyed in its own right by consumers as a medium.



It is vital to consider direct environmental effects of advertising, the benefits of environmental advertising itself and the principle of freedom of commercial speech. Environmental effects The environmental dimension in the performance of the advertising sector is somewhat different from the traditional industrial sectors with the use of energy and other national resources in their production processes. The environmental impacts of the sector are many and very different. However, most impacts are marginal compared with the production processes of for example the manufacturing industry. The advertising sector has environmental impacts in terms of paper use, energy consumption and the related environmental impacts of print and offset. Much advertising is on print, for example newspapers or as separate brochures and flyers. This creates evidently waste after the newspapers are read and the door-to-door flyers discarded. However, it is difficult to label these as unsustainable, since the advertising content, as we have seen, is fundamental to media variety and independence. Similarly, postal services will argue that direct mail advertising heavily subsidies mail delivery for domestic and business use. Outdoor advertising can have environmental impacts in terms of visual pollution in areas of natural beauty or aesthetic interest. This pollution is however very much regulated by regional and municipal authorities. Walking

along the Seine in Paris gives a very different impression from passing Times Square in New York, United States. A city such as Paris regulates such visual impacts with a different standard from Las Vegas. It is very much the responsibility of local authorities, working with stakeholders, to decide the standards they wish to apply. One can say that Las Vegas would not be Las Vegas if they took the signs down and Paris would not be Paris if they put them up. Piccadilly Circus or Times Square would lose their fame without neon and the roof of the new Reichstag in Berlin would not be enhanced by a giant poster. The amount of factual data on the environmental impacts of the advertising sector is very limited, mostly due to the fact that the direct impacts are either marginal or due to the fact that they are linked to other activities and not directly to advertising. For example, we measure newspaper use and recycling percentages. However, the advertising portion in this is not specified.

Environmental advertising Probably the most significant environmental impacts are embedded in the campaigns designed to promote products and services. Advertisers and communicators can have an environmental impact in highlighting the environmental aspects of products. Furthermore, authorities and other organisations can use advertising to increase awareness about environment among the general public or specific groups within society. If more environmentally friendly washing powders are sold due to effective advertising, the environment will benefit. These benefits can however hardly be

attributed to advertising. Advertisers have the ability to convince their clients to highlight the environmental impacts of their products if this would make sense from a business perspective. Advertisers can also profile a company as environmentally conscious and use advertising to strengthen their brand value. This requires some sound knowledge and experience on environmental issues within advertising and marketing companies. Some communication agencies have specialised in environmental and/or social aspects that can be linked to the objectives of sustainable development. The contributions of advertising to the environment: advertising campaigns have promoted many aspects of environmental concern, wildlife charities and conservation schemes in particular have benefited from fund raising through promotional tie-ups with brands, advertising provides the only means for corporations to express their commitment to environmental issues and thereby to give leadership to the mass of consumers.

2.11 FREEDOM OF COMMERCIAL SPEECH It is universally agreed that there have to be sensible and practical limits to advertising freedoms in order to maintain public confidence and to defend good taste. But the issue of freedom of commercial speech is one we must address. That freedom is guaranteed in the United States constitution and was defended many years ago by political philosopher, John Gray in words, which ring very true today.

Advertising is something all of us do in some way and we are all touched by it. It is an essential part of economic and social life and indivisible from the whole process of creating and selling goods and services. It guarantees independent media and freedom of choice that comes from competition and awareness of alternatives. As a sector it is generally very well controlled and practitioners realise that the effectiveness of what they do is entirely dependent on a bond of consumer trust. In the commercial area, the main effect of advertising is to enable brands to compete with each other and the volume of advertising does not create overall growth of consumption. In the social area, advertising is used for a vast range of sustainable issues and it is a pity that within the confines of this report we have not been able to display the extent of creativity that is applied to good causes.



Its unrealistic to think advertising will start a revolution. Advertising isnt meant to set social policy. But advertising is very effective at listening and reacting to public will. And the public seems to be catching on to the costs of our extreme patterns of over consumption. Jelly Helm, Co-Chairman of Barden and Jelly Agency


3.1 HOW DID ADVERTISING START IN INDIA? It is almost impossible to trace the actual birth year or century of advertising as seen in its present form. However, one thing is certain that it is centuries old. It has a history of around 5,000 years as the Indus Valley Civilisation give solid proofs of advertising in its crudest form between 3,000 and 1,530 BC. The earliest forms of advertising were mostly used for religious purposes. That is, advertising was in the form of propaganda. To spread the teachings of Buddha, the King Emperor Ashok of Kalinga set up rock and pillar edicts all over the Indian Territory between 563 and 232 BC. These rock and pillar edicts can be called as the forerunners of poster advertising of today. Thus it was outdoor advertising that came to light with the point of sale display in market places. The indoor visual communications were wall paintings in the cave temples of Ajanta and Ellora. Till the advent of British rule in India, advertising was not taken for business purposes. The reasons were that India was the unique example of household industrial activities. At the time of British entry, India was in age where the relations between the producers and consumers were direct. The local markets were weekly and the producers displayed their wares, shouted and gave samples for promoting their trade. The skills of Indian artisans in the areas of

textiles-silk and cotton, metal works were well accepted and there was no need of any special efforts of advertising. British settlement and ruling from 1600 onwards brought about certain changes. To popularise British goods, particularly the luxury goods, advertising efforts were needed. It was made possible through print medium. The first printing press was brought by Portuguese in 1556 which was used exclusively for printing Christian literature. It was only in 1780 that the first Indian newspaper was started, namely, "Bengal Gazettee" in Calcutta. By 1786, there were four weekly newspapers and a few monthlies published in Calcutta. The "Bengal Journal" printed all the government advertisements. In 1790, "The Courier" was published in Bombay and the advertisements were in Indian languages, namely, Marathi, Gujarati, Konkani, Urdu and Kannada. Though the first newspaper in Indian language was started in 1833, it took pretty longer time to advertise in Indian languages. This show continued till the close of the 19th century. There were no advertising agencies but the newspapers had the services of space sellers. The first Indian advertising agency was started in 1907 at Bombay and another in 1909. These agencies secured the ads and got them published in the newspapers. Up to the outbreak of World War (1914-1918) most of the advertising was planned and placed by the foreign manufacturers. During the First World War, the newspaper circulation increased, as people were interested in hot news of war affairs. During post-war period Indian market was flooded

with foreign goods that gave a lot of spurt to newspaper advertising so that more and more space was reserved for advertising. After the First World War, the Indian agencies failed because of the severe competition from foreign agencies, mostly British and American. The Indian agencies did have tough time but could learn the importance of agency business as a rich source of employment and earning. It made them to try outdoor advertising medium as newspaper medium was controlled by foreign agencies. Meanwhile the business was very badly affected by the Great Depression of 1929-33. However, the first full-fledged Indian advertising agency sprang up in 1931. The increased competition demanded a thorough improvement in the quality of advertising work and services. To improve artwork and copy illustration, Indian agencies sent their employees abroad for special training. The All India Radio was started in 1936. In. 1939, The Indian and Eastern Newspapers Society was founded to protect and promote the legitimate interests of the newspapers and to deal collectively with the government, agencies and the advertisers. In 1941, Indian Languages Newspapers Association was formed to deal with the specific problems of Indian language newspapers. In fact, 1930s can be considered as the period of consolidation in the history of Indian advertising. The "Swadashi" movement gave special twist to popularise Indian goods against the imported goods. During the Second World War (1939-1945) and before independence, there was fine fillip for advertising. Because of political hegemony between the great powers, India became the main supplier of industrial goods to the middle and Far

East. War encouraged good many industries and these industries wanted new markets and it was possible through advertising. The wartime advertising was more a reminder type. Foreign advertising declined, as there were substantial cuts in import caused by war conditions. It affected even the advertising as newsprint was reduced resulting in reduced pages and space. This intensified competition and the result was the much-expected improvement in quality. By the end of World War Two, the political and economic scene underwent a sweeping change. Scarcity conditions gave much impetus to the growth and flourishment of light and small industries. In 1945, Association of Advertising Agencies of India (AAAI) was formed to raise the standard of advertising and regulation of advertising practices through code of conduct. With the independence of India in 1947, the immediate tasks were to meet fund shortage followed by the special problems of partition of India. The newly formed Government took necessary steps to meet the challenges of Indian agriculture and industry .In 1948 Audit Bureau of Circulations of India (ABCI.) was started on the lines of ABC of America. In 1952, The Indian Society of Advertisers was formed to promote the interests of advertisers so as to raise the standard of Indian advertising. The TV services were introduced in India on 15th September 1959 at Delhi. Similarly, Advertisers Club of Bombay was started in 1955 and all the metropolitan cities have such clubs. Thus, during the planned era from 1951 to date advertising industry came up in a big way. Today, the worth of Advertising Industry is 1,650 million rupees as

annual turnover. The industry is well bloomed in all its branches, namely, advertisers, advertising media, advertising agencies, consumers and the government too. The pages devoted in this book have revealed this fact very clearly. 1.2



Ashoka's First Rock inscription at Girnar


3.2 ORIGIN OF INDIAN ADVERTISING AS BUSINESS The first newspaper in India was brought out by an Englishman James Augustus Hickey in 1780 who was stationed at Calcutta. The paper was brought out on Saturdays and was first called the Calcutta General Advertiser or Hickey's Bengal Gazette. Publishing a newspaper is an expensive business as Hickey realised to his cost. He was losing money faster than the newspapers came out of the printing press. To make ends meet, Hickey decided to take on advertisements or ads. The earliest ads consisted of simple messages 'classified' into different categories for easy reference with a mailing address from where they could be ordered. These became the forerunner of today's classified advertisements in newspapers. For instance, today's newspaper carry sale of autos, electronic items, domestic services, pets, etc under these headings. Hickey's paper was the first to carry such advertisements but these were mostly from 'patent' medicine manufacturers. The concept of chemists or druggist shops as we know today, came much later. Most medicines then were grandma's recipes, or were concoctions made by so called 'doctors' and were thus sold (patented) under their own names. A few large retail stores like Spenser's (in Chennai), Whiteways & Laidlaw or the Army and Navy Stores also advertised and these were basically targeted at the British and European settlers who were already familiar with mail-order purchases. It took nearly 120 years for someone to discover that companies and individuals

needed help in framing catchy copy (text of the advertisements) to attract customers and a right magazine or journal to address the right audience. In stepped B. Dattaram's, India's first advertising agency, from Girgaum, Mumbai, to fill up this vacuum. It didn't take long for others to notice that Dattaram's cash registers were ringing. By the 1920s, other agencies like Gujarat Advertising and Allied Advertising had come up. The first expatriate (foreigners settled in a country) ad agency was Alliance Advertising, set up during World War I (1914-18). Subsequently, L.A. Stronach (then, the agency for General Motors in United States) and D.J. Keymer opened up in India. The first truly multinational agency was J Walter Thomson (JWT) set up in 1926. The agency was hired to look after General Motors' Indian interests in the country. With the arrival of ad agencies with global branches, smaller agencies began to disappear or got merged with larger ones. L.A. Stronach became Norvickson Advertising while Keymer was taken over by Benson into one of their companies called BOMAS. It finally changed name to Ogilvy & Mather. However, the Calcutta branch of Keymer was taken over by its employees in 1955 and they named it Clarion. One of India's foremost film directors, Satyajit Ray, was at one time employed here as a designer and illustrator. Lever, a multinational consumer product company had also opened its Indian office that had its own in-house advertising department. This later turned into an independent agency called LINTAS (Lever's International Advertising Service).

The first Indian advertising agency to offer both creative work as well as space selling was Sista's Advertising and Publicity Services set up by Venkatararao Sista in 1934. Among the first foreign brands to Indianise themselves was Lux and Pears toilet soaps. Lux was sold as a beauty soap of the film stars and in 1941 roped in film actress Leela Chitnis to model for the ad. Today, most of the top film heroines have appeared in testimonial ads for Lux. However, it was the marketing campaign in 1939 for a vanaspati (cooking fat) brand called Dalda, by LINTAS that truly turned brand naming on its head. Conceived by Harvey Duncan, of LINTAS, the tin was designed, as were different pack sizes. As an advertising gimmick, a van with a huge round tin did the rounds in the metro cities of Mumbai, Calcutta, Delhi and Chennai. Dalda, with its yellow label and green palm tree, soon became a generic name for vanaspati (just as Xerox, a brand name has become generic with photocopying services).


In the 1950s, commercial advertising on radio began with Radio Ceylon (now Sri Lanka) and Radio Goa. All India Radio accepted commercial ads in the middle 1970s when their 'Vividh Bharati' channel took on sponsored programmes like Binaca Geet Mala, Saridon ke Saathi and Bournvita Quiz Contest. Very few of the innumerable advertising agencies can boast of a long agency-client relationship. However, the association with health food brand 'Horlicks', and Hindustan Thompson Associates Limited (HTA, previously J Walter Thompson), has remained unbroken for 68 years. The agency has also been handling Air India's (international air carrier) Maharaja campaign from 1953. Today, India is definitely a country to be reckoned with in terms of advertising with agencies winning awards at the International Festival at Cannes, France and an Indian, Arun Nanda (chairperson of Rediffusion DY&R), even being on the panel of judges.4.1

3.3 INDIAN ADVERTISING MARKET: - A PROFILE India, a sprawling subcontinent of 3.29 million square kilometers with a population of 1040 million, is embarking on the most profound change in its economic policy since it won its independence from Britain, 56 years ago. India has about 230 million people living almost below the poverty line and is still a very rural, agrarian society. But marketers are rejoicing at the emergence of a creamy layer of super-haves with an annual income of over Rs.900,000 or U.S. $18,000 per annum. This, in purchasing power terms, translates to U.S. $108,000. These consumers travel widely in India and abroad, are very

conversant with English and look for world-class products and services. Just below them lies the huge middle class, a population of almost 280 million people. These consumers are now emerging as a major target segment for consumer durables, branded consumer products, services, financial products, etc. What will this opportunity India translate itself into? Lets look at market sizes for a few product classes for the year 2000: colour televisions 13 million units; refrigerators 10 million units; two wheelers 7.3 million units; personal computers 5.4 million units; audio equipment 70 million units; wristwatches 100 million units; washing machines 6.7 million units. India, in terms of per capita income, ranks well below most other countries in the world. But when Indias GDP is taken at purchasing parity rates, India ranks a respectable No.6! Given this and given the fact that a large part of this income is in the hands of the creamy layer and the burgeoning middle class, India truly spells Opportunity to forward thinking MNCs. A number of MNCs have been scared of looking at India in the past because of its vastness; population of 1040 million, over 5000 towns, over 500,000 villages, 14 languages, 1426 dialects, over 5000 publications, etc. But now with the emergence of the middle class who can be reached in about 100 to 200 towns through one medium, TV, the task has become a lot more comprehendible. The beginning of this unification happened in 1985, when the country got its National Network Television. By advertising on the network, one could reach over 30 million households who were glued on to the popular film based

programmes. The 90s has seen this trend taking a new turn. The satellite TV has hit India. Today in a city like Mumbai, the upper classes have access to over 90 channels, provided by the local cable operator for monthly fee of just Rs.200 In the smaller cities, the number of channels are fewer (up to 10) but the trend is catching on. The TV explosion has enabled astute marketers to focus advertising messages more sharply than before. The channel is the message for many product categories. The multiple language problem of India still continues. But the emergence of network television has increased the understanding of Hindi, Indias national language, across the country. Gone are the days when film prints were made in 14 different languages for exhibition in Indias 20000 plus cinema halls. English is the medium of choice for the creamy layer but Hindi is the dominant medium for the middle classes. Further press advertising for most white goods is needed in 10 languages or more. Fortunately, India has a strong language culture in advertising agencies, hence most major campaigns are created in multiple languages simultaneously. When needed, services of specialist language writers are used to cross the language divide. India has the worlds largest film industry and has a huge bank of film talent. India also has a large base of journalistic talent, given the democratic, free-press orientation of the country. Mass media too is today undergoing a rapid

transformation with more TV software production, specialised niche magazines and FM radio. India has a large and growing advertising industry. Total media expenditure is expected to cross Rs 24000 crores by the year 2003. The Advertising Agencies Association of India, the equivalent of 4As, is a vibrant and active trade association with over 120 active members. AAAI is celebrating its 53th anniversary this year and plans to become an even more powerful body for the Ad Industry. Indian ad agencies have a vast pool of high-class talent, recruited from management institutes, art schools, etc. Indian ad professionals are today being headhunted for lucrative jobs in the Far East and Middle East countries. Today, Indian TV and Press advertising can be called world class and with the liberalization of the economy, Indian Ad professionals are getting increasingly exposed to world-class advertising. The integration of Indian Ad agencies into worldwide networks is happening quite rapidly, since India has had a fairly well developed ad industry in spite of being a controlled economy.

Indian Ad agencies and their worldwide affiliates are looking forward to playing a more active role in making India a truly consumer driven market. India is in for some exciting times ahead. The marketers can look forward to a growing market. The Indian consumers can look forward to a choice of worldclass goods and services.

India with its strong democratic polity, a large financial market, a growing presence of reputed multinational companies, an established set of professional ad agencies and a strong distribution infrastructure today spells Opportunity to astute marketing men. The advertising market in India was estimated at Rs 7200 crores for 1998, and was estimated to grow at about 12 percent to Rs 8100 crores for 1999. Revenues of advertising companies in India which were 15 percent of the total expenditure on advertising were Rs 1094 crores in 1998 and Rs 1224 crores in 1999. About 400 advertising agencies with a work force of 18,000 operated in the Indian advertising market in 1999. The Fast Moving Consumer Goods (FMCG) segment is the largest advertiser in the Indian advertising industry, closely followed by the consumer durable segment and the automobile industry.

With 80 percent of all billings, newspaper and television remain the two most popular forms of advertising. Advertisers predict his trend will continue in the coming years due to the proliferation of the print media and the growth in the cable TV and the satellite television business. Indian advertising companies with foreign collaborations control 75 percent of the Indian advertising market. Of the top 20 advertising agencies in India, 15 firms have either joint ventures or affiliations with large multinational advertising agencies. Most of these 15 multinational agencies are among the top 24 global advertising agencies. As the number of multinational companies (MNC's) grow in India, the Indian advertising industry is expected to experience more affiliations and collaboration agreements with foreign agencies.

The presence of American advertising companies in India is as old as the Indian advertising industry itself. Hindustan Thompson Associates (HTA), the largest Indian advertising agency in India has collaborated with the J. Walter Thompson Company of New York since its beginning in 1929. American advertising agencies with a long presence on the Indian advertising scene include J. Walter Thompson Company, Interpublic Group and Ogilvy & Mather. Of the top 20 advertising agencies in India, 12 have joint ventures with American advertising agencies. Other countries with agencies active in this sector include the U.K. (two equity participants), France, and Japan (one equity participant). Although growth of the Indian economy has slowed over the last two years in tandem with other Asian economies, its seems to be stabilizing. Estimates for this year's first quarter of the Indian fiscal year (April-June) indicate that the Indian economy will perform better than last year. Industry sources predict a surge in consumer demand that will result in increased revenue for the advertising industry. As new products and new consumer segments come into the market, Indian advertisers need to constantly address the large Indian population. Under these circumstances industry sources feel that cutting advertising budgets can be detrimental to their market shares. In addition, the advertising industry's ability to promote sales and the ability of mass communication to deliver is more established in India than in other developed countries. Industry sources feel that this year's general

elections that will be held in September will provide additional revenue to the advertising industry. After the new code of conduct was issued in early 1990, Indian politics is emerging as a major client for the advertising sector. Unlike the products marketed by companies, politics in India has been using advertising to generate support from the masses during an election campaign.


Population (Mn) Urban Population GNP (US $ BN) Geographical Area States Towns Villages

1040 26% 271 3.69 mn 25 3,768 5,80.702


Westernised Elite Indian Middle Class The Silent Majority The Very Poor The Destitute

10 million 280 million 500 million 170 million 80 million


Total Media Expenditure

Rs 8100 crores (1999)

Press TV Outdoor Radio Cinema

60.2% 30.6% 5.9% 3.0% 0.3%

3.4 THE TOP TEN SPENDERS IN THE INDIAN MARKET The US advertising and marketing weekly, Advertising Age conducted its sixteenth top global marketer survey with rankings for the year 2001. And it shows that media spend in the Indian market has considerably increased, as opposed to the 2.6 per cent global overall fall in spending by the top 100 marketers. Bucking the trend in worldwide media spend, the survey noted that the top ten spenders in the Indian market have increased their ad spend significantly. India is, perhaps, the only Asia Pacific country where both Unilever and Procter & Gamble have increased their ad spend, the survey noted.

The top ten media spenders in the country comprise of both multinationals and big Indian companies.5.8 Companies are trying to reduce their advertisement expenditure in recent times. This is apparent from the decrease in the ratio of advertisement expenses to sales for 250 major private sector companies (sales above Rs 100 crore) during 200102.

The ratio marginally declined from 2.44 per cent in 2000-02 to 2.43 percent in 2001-02, which suggests that expenditure on advertisement rose much slower than sales during the year. Advertisement expenses comprise sales promotion also. For the purpose of this study, sales means sales income net of excise duties. In absolute terms, the 250 major companies earned a net sales income of Rs 1,81,262 crore in 2001-02 as against Rs 1,72,911 crore in 2000-01 (a rise of 4.83 per cent). The advertisement expenses of these companies worked out to Rs 4,405 crore in 2001-02 as against Rs 4,211 crore in the previous year (a rise of 4.62 per cent).



COMPANY 0 1 - 0 2 0 0 - 0 1 HLL ColgatePalmolive ITC Dabur India Nestle India Bajaj Auto McDowell Mahindra & Mahindra Reckitt Benckiser Britannia Industries(250) TOTAL 82382 23099 18009 15445 15427 11552 11359 9325 9066 9063 440520 69658 21395 18332 14607 12846 12990 10807 7962 6101 8529 421081 18.3 8.0 -1.8 5.7 20.1 -11.1 5.1 17.1 48.6 6.27 4.6

01-02 0 7.51 20.75 3.56 13.99 8.47 3.21 13.53 2.90 16.48 6.48 2.43


19.06 4.36 13.18 8.12 4.31 13.17 2.27 11.12 6.66 2.44

Source: -


90000 80000 70000 60000 50000 40000 30000 20000 10000 0

All figure in Rs lakhs

HLL Colgate-Palmolive ITC Dabur India Nestle India Bajaj Auto McDowell Mahindra & Mahindra Reckitt Benckiser Britannia Industries

3.5 THE YEAR 1998 TO 2003: - FOR INDIAN ADVERTISING AGENCY Indian year-on-year advertising expenditure is expected to grow until 2005. However, the high growth rates of the 1993s will not be maintained, with

average growth falling to between 3% and 4% per annum. This will be due to several factors: the expected move by the Treasury to counter inflation with stricter monetary policies, impacting on company marketing/advertising budgets as well as advertising rates; the expected peak in the business cycle that will curtail some of the recent growth in spending by corporations, as well as impacting on High Street spending; the anticipated drift towards companies placing their advertising with one agency worldwide, which may or may not benefit Indian agencies. Between 1998 and 2005, the market for advertising in the India is forecast to grow by 24.3% to Rs 34,800 million rupees.

3.6 ADVERTISING SPEND IN INDIA The ad industry grew at a healthy 22% in 2001 over the previous year. Cable TV provided the impetus for the TV media, whereas press sustained decent growth rates of about 14%. Magazines grew at a faster pace (18%) than dailies (13%). However, they contribute only one fifth to the press ad revenue. FMCGs completely dominate the spends in media especially on TV. The only durable which was among the top 10 was Car/Jeeps, primarily because of many new launches in the passenger car segment in the middle to premium price segments.

Latent categories like Writing Instruments and Mosquito Repellents have become big media spenders this year because of increased competition among the players in these categories. As expected, advertising for dotcoms, one of the largest spenders in 2000 dropped substantially in 2001. In year 1999, only 2 Indian FMCG companies were in the Top 15 ad spenders. In year 2000, there were 3 and in the year 2001, there was as many as 5 Indian FMCGs in the top 15. It seems the Indian FMCG companies have decided to take the fight into the MNCs court through aggressive advertising and distribution strategies especially in the toilet soaps and skin care categories. The FMCG market is currently dominated by the MNCs viz. Hindustan Lever, P&G and Colgate.

With many new launches in the various FMCG categories, especially skin care and toiletries, there will be aggressive advertising by both MNCs and Indian Companies. Moreover, the first 6 months of the year was also going to be a very active cricket season for India, with India playing England and later West Indies. Hence, it is expected that ad second age will increase by at least 20-25% over the same period last year. However, with recessionary pressures continuing, channels will offer more and more discounts and most industry sources expect value growth of only 9-10%.



If advertising agencies have to establish themselves as universities of learning on communication, they should develop knowledge laboratories, the equivalent of an R&D department, where research and discussion on, and practice of, all aspects of communication take place. Biju Joseph Dominic Senior Brand Services Director, Lowe Lintas & Partners, Mumbai..

A critical issue is how big the size of an agency should be. Size will matter if new capabilities are to be built, more value-added services are to be provided and cost to the client is to be reduced. Also, the industry is getting concentrated, and unless an agency figures in the top ten, it is unlikely to make reasonable money.

Dr.RanjanDas Professor of Strategic & International Management, Indian Institute of Management Calcutta, and Consulting Editor, Strategic Marketing.


4.1 HOW IS AN ADVERTISING AGENCY STRUCTURED? The Basic Structure The traditional, full-service agency is divided into 3 functional parts: account management (sometimes called client service), creative and media. These parts report to a central authority, often the President. There is a central administration and the accounting department. Each functional area has a vital but different role to play in developing advertising for the agency's clients. The account group, for instance, works with the client in developing the advertising approach and objectives and oversees the whole process through the agency. The creative group plans out the words and the artwork, in keeping with the advertising objectives. The media group develops the placement plan - where, and for how long, and in what media, and in what specific outlets, etc., the advertising should run. Some agencies may also have a research unit, which provides basic marketing information to assist in developing advertising objectives. Art jobs in advertising are plentiful, but competitive. If one work well under deadlines can come up with fast ideas and work long hours, then this may be the

profession. Although a college degree is not required for most advertising creative jobs, it can help. Recruiters say the key to being a good candidate is to have a great portfolio. This portfolio should include a variety of layouts, thumbnail ideas, and if appropriate, storyboards. The candidate should demonstrate proficiency with the computer. Programs one should be proficient in include Pagemaker, Illustrator and/or Freehand, Corel Draw (if using Windows), and programs such as Painter, Ray Dream, and Macromedia Director. A strong knowledge of typefaces and production is also helpful. Only the best applicants land their first job in a well-known advertising firm such as: Leo Burnett, J. Walter Thompson, or O&M Getting some experience in high school and at an art school or college is one way to get a leg-up on other applicants. Printed samples of work speak volumes more than marker or computer layouts of imaginary products.


Board of Dircetor /Management


Creative Director

Driector of Account Management Finance and Services (Accounting etc.)

Media Director

Writers, Art Directors,Producers

Account Supervisors

Media Planners,Media Buyers

Traf ic Dept.

Account Executives

Media Estimators


The three main branches in advertising can be broadly grouped into Sales Promotion, Consumer Education and Public Relations. In Sales Promotion, the main job is to persuade and convince people to buy the product, which the company has brought out. This cannot be done overnight with a magic wand, but can be achieved only through a sustained campaign and

promotional drive. In sales promotion, the first thing that one tries to do is to gather more and cater to more and more people and explain the benefits of the product so that they can be convinced to purchase it repeatedly. Similarly, in Consumer Education, the public at large is taught the various benefits of a particular product or service so that the people get attracted to it. In such a procedure, campaigns are designed and splashed in various papers; posters are hung and hoardings painted. Door-to-door campaigns are also organized where the benefit is even greater and the reach more effective. In Public Relations, the objective is to create a positive image of the company by organising various activities, press meets and articles published in various newspapers and magazines. This also helps in building a strong brand message, as the effectiveness of the media is very strong in the country. It is very cost effective too. There are various media available through which a company can achieve its objective. For example, the print media is the best way to achieve it through press advertisements in newspapers and magazines; handbills, direct mail and posters are the other forms. In the Audio-Visual medium, there are radio spots, film and television commercials, slide presentations and live shows. In displays, there are hoardings, exhibitions, point of purchase promotions and demonstrations, market stalls and information booths.

Like any other industry, advertising is also well structured and there are several departments. The major tasks that are performed in any well-structured

agency are Client Servicing, Creative, Media, Production and Research. Each department is important in its own way, and the roles are very well integrated. II) CLIENT SERVICING

Personalized meetings with the clients are perhaps the most important part of any advertising campaign. This department is responsible for meeting prospective clients and getting business for the company. They are the main profit-makers for the company and their role is very important in the agency. It is the client-servicing people who ultimately reach the top slot of any agency. To be an effective client-servicing person, the candidate has to have a thorough knowledge of the client's business and also know his weak points so that, through advertising and communications, the gap can be minimized. Client servicing personnel meet the clients and take their briefing. They then get back to the agency's creative people who, in turn, give a shape to the campaign. The client-servicing people must understand the problem and look at the product from a consumer's viewpoint and also explain the creative department how to devise an appropriate strategy. Then they brief the media Department for right display in various outlets. Once the Campaign outline is designed, the client servicing people take the client's approval and makes modifications, if necessary. After the approval, the job is sent to the production Department where they make the campaign print. The basic requirement of a Client Servicing Executive is that he should be

interactive. As his main task is dealing with clients who ultimately sign the cheque, self-confidence and persuasive power are very important. At times, he should be able to sell a bad campaign to a client and convince him about its merits. These people should be very systematic and take every step methodically. With research getting more and more important, the task of a servicing person is to collect enough track research input before making the final presentation. The work also calls for organising research, collecting information, gauging consumer attitudes and drawing up the most appropriate and effective advertising strategy within a specified budget. Most prestigious advertising agencies prefer MBAs for the job. However, agencies also recruit client-servicing trainees with a degree, preferably in Economics with statistics.

III) CREATIVE DEPARTMENT The needs of the client have been understood but they have to be conceptualized and implemented. This is the task of the creative department. The department is further divided into two sub-sections- Copy and Art. In the former, the text of the campaign is written and appropriate slogans are conceived.

The work of the two has to be tuned together so that the campaign is noticed properly. Copy writing department works on a brief that describes the client's requirement, target group and the media channels. This department devises the campaign slogan, jingles, scripts and promotional literature of the product or service as well as proposals, concept notes and film treatments. The copy department is also expected to edit all textual matter for factual, syntax and typesetting discrepancies before it goes into production. A degree in English with a good educational background, and a flair for writing backed up by the knowledge of advertising are the required parameters to become a good copywriter. General awareness of the current affairs and the social trends is necessary for the job. Command over more than one language can be an asset. The art Department is responsible for the visual effect of a campaign. Layouts and graphics for advertisements are done by this department. Displays, logos and mastheads are also designed. The task of the Visualiser is to visualise and conceptualize the art work.

The studio takes care of the technical aspects of design. Rough sketches are converted here into finished layouts, storyboards; art works and slides are done here and the final shape given to a campaign. The studio also keeps stock of the art materials purchased by the agency when ordering day-to-day inputs, like transparencies and pictures from various sources.

The minimum requirement to join an agency's art Department is a degree/diploma in commercial art from a reputed art college or a design school.


This department is responsible for the positioning of an advertisement in the press, radio or television as well as identifying and procuring display space. The department, keeping in view the target segment, looks for innovative media outlets and places the advertisement accordingly. The department also negotiates for various media discounts and checks out effectiveness of the regional media and its reach to the targeted consumer. Post-campaign release research is undertaken by the department to keep a check on the effectiveness of the ad/campaign. Media buying is a very tricky business and it is here where the client's shoe pinches the most. By media buying, one means, the purchase of advertising space and air time. It also constitutes keeping in contact with commercial representatives of the press, television stations and other media outlets; raising estimates on campaign media plans and ensuring that materials are released on time and the billing is properly done. The agency gets a good commission from the outlet on releasing any campaign. As a matter of fact, advertising agencies are finding media business more profitable and are diversifying into this business with renewed vigor. Many of them have floated separate outlets for media buying and selling. Given the nature

of job that involves interacting with the client and also with the media, the minimum educational qualification requirement is an MBA. The person should be able to juggle with numbers and make the best use of the client's money. If the candidate is an Economics graduate with Statistics background, the chances are far brighter. V) PRODUCTION DEPARTMENT Production Department of an advertising agency is responsible for the looks of the advertisement when they are released in newspapers, magazines, posters and billboards. The production people ensure that the ad gets printed and, therefore, need to know all about typography, printing, photography, use of material, etc. As more and more ads are now released in film format, the production department is also likely to be involved in the production of ad films.

VI) RESEARCH The basis of any advertising is good research. Every good ad plans start with research. This has to be done with the collection of data, of information about the target group, the market and the existing competition. Based on market research, a broad hypothesis is formed on which the ad story is being worked out, market research specialists must, therefore, be good in statistics, and possess some knowledge of psychology or behavioural sciences.

4.2 JOB TITLES IN ADVERTISING i) Creative Director/Vice President

This person is in charge of the creative portion of accounts. They must work carefully in a budget. After brainstorming in a creative session, the creative director will usually create fast thumbnail sketches and then pass them off to the art director for more careful rendering. Frequently the creative director also does some copywriting, but usually limited to slogans or headlines. Throughout all stages of the creative process, the project must be approved by the creative director who also works closely with the account executive and client. This person is usually present during crucial stages of a project such as a photo shoot or printing. Strong computer skills are needed for this position. A good illustration of a creative director is found in the movie Nothing in Common with Tom Hanks playing a creative director.
ii) Art Director

This person also works within a budget. In smaller agencies they also manage some accounts. This person takes conceptual ideas from the creative director and puts them into a finished layout. Once the ideas are approved they also work closely with production to see the project through completion. Occasionally this person meets with clients and attends photo shoots and printing sessions. In larger agencies they have assistants who they delegate work to.

iii) Assistant/Junior Art Director

This person assists the art director. Work that can't be done by the art director due to time constraints or isn't "appropriate" to an art director is delegated to the assistant. Sometimes this position is an entry level position, but usually the gopher job is entry level in large agencies. Strong computer skills are needed for this position. iv) Artist/Designer

This person does a variety of work ranging from quick illustration, key line, rendering layouts, creating stats, and design. Strong computer skills are needed for this position. v) Gopher

This person usually does the jobs that no one else wants to do. The job is entry level and offers opportunities for advancement and to meet many people. Job duties range from delivery/pick-up, creating stats, clean-up, ordering supplies, taking inventory, and rendering. This should show the opportunity for

advancement that this job has. Strong computer skills are helpful for this position.

vi) Production Coordinator

This person usually acquires quotes from vendors on jobs. Once a competive price is found, they work closely with printers and other vendors to assure quality in production. Strong computer skills are needed for this position. vii) Production Assistant

Assists the production coordinator. Does the same work but usually delegated work that the coordinator doesn't have time for. Strong computer skills are needed for this position. viii) Keyline/paste-up (for small agencies)

In small agencies with a low level of technology, this person pastes blocks of type in an ad. They also work the stat camera. In larger agencies, this person creates finished ads on the computer. They usually make corrections in type and position. A strong knowledge in fonts and typefaces is needed. ix) Freelancer

This person is a self-employed person frequently hired by agencies during a crunch. They do jobs that may range from illustration, paste-up, design, and art direction.

x) Illustrator

This person may be a freelancer. In large agencies, they hire an illustrator fulltime to save money. This person creates illustrations for ads, TV, brochures, etc., using a variety of media including the computer. xi) Storyboard Artist

This is a deadline-heavy job. The hours are long and frequently run into the weekend. Storyboards are created for music videos and commercials for the screen or TV. They range in resolution from quick renderings to marker layouts and computer comps. This job has a high turnover rate but offers quick, easy cash and opportunities for other jobs. xii) Layout Artist

Creates ads using a variety of media from pencil, markers and computers. These ads have already been designed by an art director. xiii) Media Director

This person oversees production in media. They may attend photo shoots, create PR campaigns, slide shows, video presentations, etc.


The advertising objectives largely determine which of two basic types of advertising to use; institutional or product.

i) Institutional advertising tries to develop goodwill for a company rather than to sell a specific product. Its objective is to improve the advertiser's image, reputation, and relations with the various groups the company deals with. This includes not only end-users and distributors, but also suppliers, shareholders, employees, and the general public. Institutional advertising focuses on the name and prestige of a company. Institutional advertising is sometimes used by large companies with several divisions to link the divisions in customers' minds. It is also used to link a companys other products to the reputation of a market-leading product. ii) Product advertising tries to sell a product. It may be aimed at the end user or at potential representatives and distributors. Product advertising may be further classified as pioneering, competitive, and reminder advertising. a) Pioneering advertising tries to develop primary demand that is demand for a product category rather than a specific brand. It's needed in the early stages of the adoption process to inform potential customers about a new product. The first company to introduce a new technology to its industry doesn't have to worry about a competitive product since they alone have the technology. They have to sell the industry on the advantages of the new technology itself. Pioneering advertising is usually done in the early stage of the product life cycle by the company, which introduces an innovation. b) Competitive advertising tries to develop selective demand; demand for a specific manufacturers product rather than a product category. An innovating company is usually forced into competitive advertising as the product life cycle

moves along. After pioneering technology is accepted and most manufacturers are supplying competing products, the innovator is forced to sell the advantages of his specific design over that of the competition. This is usually the situation in a mature market. c) Reminder advertising tries to keep the product's name before the public. It is useful when the product has achieved market domination. Here, the advertiser may use "soft-sell" ads that just mention or show the name as a reminder. Reminder advertising may be thought of as maintenance for a product with the leadership position in the market. Of course none of the above classifications are exclusive. Some companies combine elements of the institutional ad with product advertising. The classifications are merely aids in developing the objectives, which the company sets for their ads

Much of the advertising in India is still created and placed by full-service advertising agencies, and these agencies provide most training positions. There are, however, a number of "specialty" or "boutique" agencies, which specialize in just one of the functional areas (account management, creative or media) of the full service agency.

Many agencies have not only a central office headquarters but also branch offices in major centres across India viz. Mumbai, Delhi, Kolkata, Chennai, Bangalore Hyderabad and Nagpur.

All agencies must avoid account conflict. For example, an agency that has one major manufacturer as a client would not also have that manufacturer's competitor.


A wise man once said, "The person who saves money by not advertising is like the man who stops the clock to save time." In today's fast-paced, hightech age, businesses have to use some form of advertising to make prospects aware of their products and services. Even a famous company like Coca-Cola continually spends money on advertising to support recognition of their products. In 1993, Coca-Cola spent more than $150 million to keep its name in the forefront of the public's eye.

Some questions the advertiser should consider before buying ads are: 1. What media is the best to use? 2. How important is creativity? 3. Is there a way to buy space and time that will stretch advertising budget? When it comes to advertising, a lot of people really don't know what they want, where to get it or what to do with it after they have it. This study will help to learn to determine what type of advertising media is best, and learn to

identify guidelines that can be used obtain the advertising exposure. It will help to identify ways to make advertising more cost efficient. Advertising is an investment in business's future. And like any investment, it's important to find out as much as one can before taking a decision.

1) NEWSPAPER ADVERTISING Every advertising medium has characteristics that give it natural advantages and limitations. As one look through newspaper(s), there are some businesses that advertise regularly. Observe who they are and how they advertise their products and services. More than likely, their advertising investment is working if it's selling!

Some Advantages in Newspaper Advertising Almost every home in the India receives a newspaper, either by newsstand or home delivery. Reading the newspaper is a habit for most families. Moreover, there is something for everybody-- sports, comics, crosswords, news, classifieds, etc. The advertiser can reach certain types of people by placing ad in different sections of the paper. People expect advertising in the newspaper. In fact, many people buy the paper just to read the ads from the supermarket, movies or department stores. Unlike advertising on TV and radio, advertising in the newspaper can be examined at leisure. A newspaper ad can contain details, such as prices and telephone numbers or coupons.

There are many advantages to advertising in the newspaper. From the advertiser's point-of-view, newspaper advertising can be convenient because production changes can be made quickly, if necessary, and one can often insert a new advertisement on short notice. Another advantage is the large variety of ad sizes newspaper advertising offers. Even though the advertiser may not have a lot of money in their budget, they can still place a series of small ads, without making a sacrifice.

Some Disadvantages with Newspaper Advertising Advertising in the newspaper offers many advantages, but it is not without its inherent disadvantages, such as: 1. 2. Newspapers usually are read once and stay in the house for just a day. The print quality of newspapers isn't always the best, especially for

photographs. It is suggested to use simple artwork and line drawings for best results. 3. The page size of a newspaper is fairly large and small ads can look

minuscule. 4. 5. The ad has to compete with other ads for the reader's attention. One is not assured that every person who gets the newspaper will read the

ad. One may not read the section advertised in, or they may simply have skipped the page because there wasn't any interesting news on it.

How to Work with Newspaper Representative? Every newspaper has its own sales staff, and the advertiser normally appointed their personal newspaper "Sales Representative." A newspaper sales rep can be very helpful. He or she can keep posted on special sections or promotions that may apply to the business; one should always keep in mind it is the sales rep's job to sell the advertising. Sales rep might say that the newspaper can layout any of the ads, pre-prepared or not. However, these ads are assembly line products and are not often very creative or eye-catching. Consider using an artist or agency for the ads. In addition, sales rep can sometimes be instrumental in making sure that the story or upcoming announcement "finds" the right reporter because the relationship between the advertising and editorial staff is chummier than most people think, even though they claim total anonymity. Buying Newspaper Advertising Space Advertising is sold by column and inch, instead of just line rates. To determine the size of ad one want, just by looking in the newspaper in which to advertise. If one cannot locate an ad that's the size needed, just measure the columns across and the inches down. For example, an ad that measures 3 columns across and 7 inches down would be a 21-inch ad. If the inch rate is Rs 500, the ad would cost Rs 10,500. In case the newspaper is still on the line rate system, then there are 14 lines to an inch. So, if the line rate is Rs 3.75, multiply it by 14 and one can get the cost of an inch rate. (The rate would be Rs 45.50 an inch.)

2) MAGAZINE ADVERTISING Many of the same "print" type principles that apply to newspaper advertising also apply to magazine advertising. The biggest differences are:

Magazines are usually weekly or monthly publications instead of daily. Advertising messages are more image-oriented and less price-oriented. The quality of the pictures and paper are superior to newsprint. Advertisements involve colour more often.

The general rule that one can run the same ad 3-5 times within a campaign period before its appeal lessens applies to magazine advertising as well, even with a monthly publication. Therefore, it makes sense to spend extra time and money to prepare a worthwhile ad that can be successfully repeated. Over long terms such as these, however, be aware that the clients often tire of the ad before the audience does. Because ads in magazines are not immediate, they take more planning. Often, an ad for a monthly magazine must be prepared at least a month in advance of publication, so ads detailing prices and items have to be carefully crafted to insure accuracy. Since the quality of the magazines is superior, the advertising that one generates must be superior as well. Negatives are usually required instead of prints or "PMTs" (photo-mechanical transfers). Consider getting assistance from a graphic artist or an advertising agency. There are two categories of magazines: trade magazines and consumer magazines. Trade magazines are publications that go to certain types of

businesses, services and industries. Consumer magazines are generally the kind the advertiser finds on the average newsstand. Investigate which type would do the business the most good. An agency can also purchase the magazine space for you, often at no charge, because the magazine pays the agency a commission directly. If the advertiser, wish to purchase the advertising directly, contact the magazine and ask for an "Ad Kit" or "Media Package." They will send a folder that includes demographic information; reach information, a current rate card and a sample of the publication. Although most magazines are national in nature, many have regional advertising sections that allow business to look like it purchased a national ad when it only went to a certain geographical area. This can be especially useful if product or service is regional in nature as well and could not benefit from the magazines complete readership. Each magazine does this differently, so contact the interested in and ask them about their geographic editions. Some sophisticated magazines even have demographic editions available, which might also be advantageous.

3) RADIO ADVERTISING Since its inception, radio has become an integral part of Indian culture. In some way, it touches the lives of almost everyone, every day. Radio, as a medium, offers a form of entertainment that attracts listeners while they are working, traveling, relaxing or doing almost anything. A farmer, for example, may listen

to the radio while he is having breakfast or plowing his field. People driving to work often listen to the radio. Radio offers information such as: news, weather reports, traffic conditions, advertising and music for listening pleasure. What Are Some of the Good Things About Radio? Radio is a relatively inexpensive way of reaching people. It has often been called the "theater of the mind" because voices or sounds can be used to create moods or images that if crested by visual effects would be impossible to afford. The advertiser can also negotiate rates for their commercials, or even barter. Stations are often looking for prizes they can give away to listeners, so it is possible to get full commercial credit for the product or service offered.

Advantages to radio advertising include:

The ability to easily change and update scripts are paramount to radio broadcasting, since news stories can and often do happen live.

Radio is a personal advertising medium. Station personalities have a good rapport with their listeners. If a radio personality announces the commercial, it's almost an implied endorsement.

Radio is also a way to support the printed advertising. The advertiser can say in their commercial, "See our ad in the Sunday Times," which makes the message twice as effective.

What are Some Limitations to Radio Advertising? Radio advertising is not without its disadvantages too, such as:

One can't review a radio commercial. Once it plays, it's gone. If the listener didnt catch the entire message, one can't go back and hear it again.

Since there are a lot of radio stations, the total listening audience for any one station is just a piece of a much larger whole. That's why it's important to know what stations the customers and prospects probably listen to. Therefore, most of the time, one has to buy time on several radio stations to reach the market.

People don't listen to the radio all the time...only during certain times of day. So, it's important to know when the customers or prospects are listening. For example, if one wants to reach a large portion of audience by advertising during the morning farm report, one has to specify that time period to the radio station when buying the time.

One of the most popular times to reach people is during Drive Times especially in metros (from 6 a.m. to 10 a.m. and 3 p.m. to 7 p.m.). It is because most people are going to or from work during this period, and because most people listen to their radio when they drive. Unfortunately, radio stations know that this is a favorite time to advertise, so commercial costs are much higher during this time.

Radio as a broadcasting medium, can effectively sell an image...or one or two ideas at the most. It is not, however, a detailed medium...and is a poor place for prices and telephone numbers.

Radio listeners increase in the spring and summer, contrary to television audiences which increase in the fall and winter and decrease in the summer. This is an important aspect to consider when choosing advertising media.

How to Time on the Radio? Like a newspaper, each radio station has its own advertising staff. Each wants to believe that their station is the absolute best buy for the money and many will go to great lengths to prove it. However, if done a research, or if using an advertising agency, one can probably have a good idea of the station they would like to buy time on and when. If one does not know which stations they want to use, ask each station for its own research, that is, the type of programming, musical format, geographic reach, number of listeners and station ratings. By getting the station ratings and the number of people it reaches, one can figure out the cost-per-thousand people (CPM) by simply dividing the cost of a commercial by the thousands of people. Without getting complicated, here are two cardinal rules for radio advertising: 1. its better to advertise when people are listening than when they are not. 2. its better to bunch all the commercials together than to spread them apart. A lot of radio sales reps will try to talk one out of advertising during specific times. They'll offer you a reduced rate called TAP (Total Audience Plan) that splits your advertising time into 1/3 drive, 1/3 mid-day and 1/3 night. This may sound like a good deal, but airing commercials during times when your audience isn't listening is bad advertising. If however, sponsoring a show such as Hawa Mahal or the Morning Farm Report, it makes sense to advertise once or twice a day on a regular basis, since those programs have regular listenership. Frequency is a vital element for effective radio advertising.

Since one can't automatically recall the radio commercial and hear it again, one may have to hear the same commercial two, four, or maybe six times before the message sinks in. If one missed the address the first time, they consciously or subconsciously are hoping the commercial will be aired again so that they can get the information they need. That's the way radio advertising works. And that's also the way the advertiser buys it. Most of the time, radio advertising should be bought in chunks. High frequency over a short period is much more effective than low frequency over a longer period. It is important for the audience to hear the spot again to get more information out of it. For example, if one wanted to advertise a twoweek campaign and one could afford 42 radio commercials, the following buy would serve well: On Tuesdays, Wednesdays and Thursdays, place three spots between 7-9 a.m. and four spots between 3-6 p.m. for two weeks. Notice that both day and hour periods are concentrated. By advertising in concentrated areas in tight day groups, the advertiser seems larger than they really are. In addition, people hearing the concentrated campaign for two or three days will think that the advertiser is on all the time. The radio sales reps may try to sell three spots everyday on the station for 14 days (a total of 42 spots). But the campaign won't be nearly as effective. For writing radio scripts, the basic copy writing rules are:

Get the listener's attention immediately. Write in conversational style. Avoid using buzzwords or jargon.

Repeat important points. Make the ending strong and positive with call-to-action for response.

4) TELEVISION ADVERTISING Television is often called "king" of the advertising media, since a majority of people spends more hours watching TV per day than any other medium. It combines the use of sight, color, sound and motion...and it works. TV has proven its persuasive power in influencing human behavior time and time again. However, it is also the "king" of advertising costs. Advantages in Television Advertising Television reaches very large audiences-audiences that are usually larger than the audience the city's newspaper reaches. The area that a television station's broadcast signal covers is called ADI, which stands for "Area of Dominant Influence." Some advantages of television advertising include the following: 1. Advertising on television can give a product or service instant validity and prominence. 2. One can easily reach the audiences they have targeted by advertising on TV. Children can be reached during cartoon programming, farmers during the morning agricultural reports and housewives during the afternoon soap operas. A special documentary on energy sources for heating homes and business will also attract viewers interested in heating alternatives. 3. TV offers the greatest possibility for creative advertising. With a camera, one can take the audience anywhere and show them almost anything.


Since there are fewer television stations than radio stations in a given area, each TV audience is divided into much larger segments, which enables to reach a larger, yet, more diverse audience.

Disadvantages in Television Advertising Because TV has such a larger ADI, the stations can charge more for commercials based on the larger number of viewers reached. The cost of television commercial time is based on two variables: 1. 2. The number of viewers who watch the program. The time during the day the program airs.

One 30 second television commercial during prime time viewing (8 p.m. to 11 p.m.) can cost 10 to 30 times more than one radio spot during drive time (which is considered prime listening time). While the newspaper may cover the city's general metropolitan area, TV may cover a good portion of the state. If such coverage blankets most of the sales territory, TV advertising may be the best advertising alternative for the business. Producing a commercial is also an important variable to consider. Overall, television audiences have become more sophisticated and have come to expect quality commercials. A poorly produced commercial could severely limit the effectiveness of the message, and may even create a bad image in customers mind. Advertising agencies or TV commercial production facilities are the best organizations for creating a commercial that will be effective for the goods or

service you are offering. However, the cost of a well-produced commercial is often more expensive than people think. Some TV stations will claim they can put together commercials for "almost nothing." Before agreeing to this, find out what "almost nothing" means. Then, determine if the commercial quality and content they are proposing will represent the firm's image. Many companies use the station's commercial production facilities for creating "tag lines" on pre-produced commercials. Often, the station will help personalize the spot for little or no cost...if advertise with them. Remember, more than anything else, when it comes to making a TV commercial, get what is paid for. Moreover, when buying commercial time for one 30-second TV spot costing from Rs 30000 to Rs50000 it makes sense to have the best sales presentation possible. Remember, like radio, the message comes and goes...and that is it. The viewer does not see the commercial again unless one buys more placements. Creativity: A Vital Element When advertise on TV, the commercial is not only competing with other commercials, it is also competing with the other elements in the viewer's environment as well. The viewer may choose to get a snack during the commercial break, go to the bathroom or have a conversation about what they just saw on the show they were viewing. Even if the commercial is being aired, viewers may never see it unless it is creative enough to capture their attention. That is why it is so important to consider the kind of commercial being created...and how one want the audience

to be affected. Spending money on a good commercial in the beginning will pay dividends in the end.

TV and Ad Budget Attempting to use TV advertising by using a poorly-produced commercial; buying inexpensive late night commercial time that few people watch; or just placing the commercial a couple times on the air will guarantee disappointing results. To obtain positive results from TV advertising one must have enough money in your budget to: 1. Pay for the cost of producing a good TV commercial (today costs range from Rs 3,00,000 to Rs1, 00,00,000 and above). 2. Pay for effective commercial time that will reach the viewer at least 5-7 times. Properly done, television advertising is the most effective medium. However, it is big league advertising...and one should not attempt it unless there is enough money in the budget to do it right. If the advertiser is still attracted to TV, it is a good idea to call in an advertising agency for production and media buying estimates. Then, figure out what sales results are expected. With such data, one should be able to reach a logical advertising decision. Buying Television Advertising Time There are many things to know and consider before buying a TV programming schedule. That is why, in most cases, using an advertising agency or a media

buying service is recommended when advertising on TV. If these services are unavailable, find a TV representative that one can trust. The agency or representative can help select the programs one should advertise on in order to reach the market. Also, ask about "fringe" time, adjacencies and package plans. When engineering the schedule, remember that repetition (or frequency) is a very important ingredient to use. Make sure the audience sees the commercial with the context of the programs. Ask for a commercial affidavit. Normally, it does not cost any more and the station will provide with a list of the exact times the commercial was run. Other Considerations For an effective and inexpensive way to get the message on the TV screen, consider using pre-prepared TV commercials that may be available to through a manufacture or distributor. One can add the name and logo to the end of the commercial for little or no cost. Look at cooperative advertising too. Many companies offer prepared advertising materials that can be used and at the same time may pay for a portion of the advertising schedule.

5) CABLE ADVERTISING Cable advertising is a lower cost alternative to advertising on broadcast television. It has many of the same qualities as broadcast television, and in fact, since it offers more programming, it is even easier to reach a designated audience.

The trouble with cable is it does not reach everyone in the market area, since the signal has to be wired instead of broadcast and also because not everyone subscribes to cable. If cable does reach a large part of your market, have an advertising agency investigate its cost or call the cable company's advertising sales department. Chances are the commercial time will be 10 to 20 percent of the costs of regular broadcast time.

6) YELLOW PAGES Telephone book advertising is another way to reach the market area. It allows placing the business listing or ad in selected classifications within the book, with the theory being that when people need the product or service, they look up the classification and contact the advertiser. Much of the "sell" copy for a product or service, therefore, does not have to be in ad content, since the people who have looked up the classification are already in the market to buy. The thing to be aware of when writing the ad is the other firms' ads within the same classification. In other words, why should the reader select the firm over the competition? That is the crucial question -- and the ad should provide the answer. Telephone Yellow Pages salespeople often employ the technique of selling as large of ad as they can to one company, then showing the other companies in the same classification what the one company is doing so that they can match it or

beat it. This is not the best criteria for determining ad size, but is definitely good for the ad salesperson. To determine the size, consider the following:

The ad should be large enough to incorporate the vital information the reader needs to make a contact decision (as mentioned above).

Remember the lessons in print advertising. Keep the ad clean, creative and eye appealing. Even though the phone company will "design your ad for free," some firms employ graphic artists and advertising agencies to create a Yellow Pages ad that really stands out.

Give a budget to work with. Figure out how much to spend on Yellow Pages advertising for the entire year, and then divide it by 12. That will give one the payment that is automatically attached to the phone bill every month.

Do something unique or different. If no one else is using color, use color. Even shades of gray can make an ad look better and more appealing. Advantages of Yellow Pages Advertising

One ad works all year long. Gives the prospect a method of easily locating and contacting the business, even if they didn't initially know the name.

Can help describe the differences between the advertiser and their competition.

Payment by the month instead of one large payment.

Disadvantages of Yellow Pages Advertising

The Advertiser must commit to an entire year of advertising. The Advertiser is immediately placed with a group of competitors, making it easy for the prospect to comparison shop.

Some classifications are so cluttered with advertising, that the ad is buried and ineffective.

It is only effective when a prospect looks up in the correct classification, assuming the prospect knows what classification to look for in the first place.

If the advertiser requires more than one classification, the Yellow Pages representative often has packages and programs that can save some money. In addition, the same is often true if the advertiser need to be advertising in more than one city or market. Yellow Pages advertising is an important medium to consider in our fast-paced, information-hungry society. People really do let their "fingers do the walking" instead of driving around blindly. Make sure that the Yellow Pages ad is attractive and informative enough to be the one or two businesses the prospect actually does select to call. Then make sure to have the resources to deal with the inquiry. After all, there is nothing more annoying than being put "on-hold" by a busy checker or being served by an uninterested or unknowledgeable employee.

7) OUTDOOR ADVERTISING When people think of Outdoor Advertising, they usually think of the colorful billboards along our streets and highways. Included in the "outdoor" classification, however, are benches, posters, signs and transit advertising (the advertising on buses, subways, taxicabs and trains). They are all share similar advertising rules and methods. Outdoor advertising reaches its audience as an element of the environment. Unlike newspaper, radio or TV, it does not have to be invited into the home. Moreover, it does not provide entertainment to sustain its audience. Some Outdoor Advantages

Since it is in the public domain, Outdoor Advertising assuredly reaches its audience. People can't "switch it off" or "throw it out." People are exposed to it whether they like it or not. In this sense, outdoor advertising truly has a "captured audience."

Its messages work on the advertising principle of "frequency." Since most messages stay in the same place for a period of a month or more, people who drive by or walk past see the same message a number of times.

Particular locations can be acquired for certain purposes. A billboard located a block in front of the business can direct people to the showroom. Or can reach rural areas efficiently by placing a billboard in each small town.

Outdoor advertising is an excellent adjunct to other types of advertising. In fact, it is most effective when coupled with other media.

Some Outdoor Disadvantages

Outdoor advertising is a glance medium. At best, it only draws 2-3 seconds of a reader's time.

Messages must be brief to fit in that 2-3 second time frame. Ninety-five percent of the time, either the message or the audience is in motion.

The nature of the way the advertiser has to buy outdoor advertising (usually a three month commitment) is not conducive to a very short, week-long campaign.

When buying outdoor advertising, remember that location is everything. High traffic areas are ideal. A billboard in an undesirable area will do little good. Keep the message concise (use only five to seven words) and make it creatively appealing to attract readership. Few words, large illustrations (or photos), bold colors and simple backgrounds will create the most effective outdoor advertising messages.

. 8) DIRECT MAIL What makes "direct" mail different from regular mail? Nothing. It is just a way the advertising world describes a promotional message that circumvents

traditional media (newspaper, radio, TV) and appeals directly to an individual consumer. Usually through the mail, but other carriers also participate. Studies indicate that it is the third largest media expenditure behind television and newspaper. General Rules

Define the audience. Figure out whom to reach before developing the direct mail program. This allows to specifically target the message to fit common needs. It is the best advertising medium for "tailoring" the appeal.

Locate the right mailing list. One can either build a "house list" by doing the research and compiling the information on a computer or one can purchase an "outside list" from a list house or mailing organization already pre-prepared and ready to go.

There are many ways to purchase lists. The Advertiser can buy them demographically (by age, profession, habits or business), or

geographically (by location, state and zip code). Or one can buy a list with both qualities. More than likely, there is a mailing list company in area that would happy to consult for the needs. If not, there are a number of national mailing lists available.

For assembly, addressing and mailing the project, one also has the choice of doing it or locating a mailing service company to do it. As the numbers of the direct mail pieces increase, the more practical it is to enlist such an

organization for assistance. They also are very good at getting the lowest postal rates.

Consider using a self-addressed reply card or envelope to strengthen return. Use a Business Reply Postage Number on the envelope.

The blessing (or curse) of direct mail is that there are no set rules for form or content. The task of deciding what mailing should have as content, its design and its message(s) is up to the advertiser. However, remember to attract the reader's attention with color and creativity. Use clear, comfortable writing and make the appeal easy to respond. And of course, coordinate the mailing with other advertising media if one is also using them in the same campaign. It can significantly increase the potential return.

9) SPECIALTY ADVERTISING "Giveaways" -- the pencils, pens, buttons, calendars and refrigerator magnets you see everyday -- are called "Specialty Advertising" in the advertising business. Chances are, one have some specialty advertising items right at the desk. Businesses imprint their name on items and give them away (or sometimes sell them at very low cost) in order that:

One notices the advertiser name enough times on the item to build "topof-the-mind" awareness. So when one needs a restaurant, for instance, one thinks of their name first.

One appreciates the goodwill of the company giving the item and eventually returns the favour by giving them some business.

These are both long-term advertising investments that can take months or years to turn into actual sales. First, select the best item that would tell the story most effectively. While an accountant can give away an inexpensive calculator, the same item may not be ideal for a hairdresser. A comb or brush might be more appropriate in that case. Second, decide what to say on the item. A company slogan? Address directions? Since one has a relatively small area, the advertiser must be very concise and direct. Third, figure out the method of distribution. Are you going to send them to each customer through the mail? If so, how much will that cost? Will you have them in a big bowl that says, "Take one"? Distribution is just as important to consider as buying the item. Just as there are many reputable specialty-advertising professionals in the area, the industry is notorious with many high-pressure telephone and mail solicitors who often give specialty advertising a bad name. Do not buy specialty advertising through the mail without checking the quality and prices with trusted

local representatives first. And, buying specialty advertising over the telephone is not recommended at all. Specialty advertising is a unique way to generate goodwill. 1.3

10) INTERNET ADVERTISING More and more innovative types of advertising are coming into existence as the Web matures, so this is not meant to be an exhaustive list. However, it covers all the main types of advertising in use today. a) BANNER ADS Despite widespread concern about the effectiveness of banner advertising, this is still by far the most popular advertising type in use today. A banner ad is a graphical bar or button containing text or graphics designed to attract a viewer's attention and induce an action (usually, invite the viewer to click through the banner and visit the advertiser's site). Banners come in all shapes and sizes, although some standards are emerging. For instance, the 468x60 pixel banner (like the one at the top of this page) is a very popular size, as is the 234x60 banner (half the size of the larger banner, so two fit into the same space). Banner ads can be static or animated. The most popular graphic format for banner ads is GIF format. Most banner ads are sold on a CPM basis or on a CPC basis.

Some sites show more than one banner ad per page, and some even go so far as to use little Java or other programs to rotate banners every few seconds while a visitor remains on a given page. b) TEXT ADS Popular in newsletters, and on some progressive sites, text ads are growing in popularity (for some products, a few words are worth a thousand pictures!) A text ad consists of a few lines of copy together with a link or an email address for action. Text ads can be priced like banner ads on a CPM or CPC basis. It is difficult to track how many text ads have been shown on a site, so many sites choose to "hide" a 1x1 pixel transparent graphic right next to the text ad and count how many times the graphic is loaded as being the number of times the text ad was loaded. Text ads in newsletters are usually specified as a number of lines, with a maximum number of characters per line. For instance, PR2 offers text ads in the newsletter with a maximum of ten lines of text and 65 characters per line. c)INTERSTITIALS Interstitial ads are nothing more than ads that are shown in the transition between two pages of a site. So you click on a link on Page A, but instead of going to Page B you arrive at an intermediate page containing the sales pitch (and hopefully - a link to Page B somewhere on the page!). Interstitials are gaining in popularity with advertisers since they offer an almost unlimited amount of space to pitch a product. Many site visitors find interstitials irritating, and they also increase site-loading times,

d)POP-UP ADS According to many webmasters, pop-up ads are the most annoying type of advertisement... although there is little evidence this sentiment is shared by the larger Web community. Pop-up ads consist of a small window that "pops up" over the main browser window when you enter a site (and sometimes when you leave it, a favourite tactic of adult sites). The pop-up windows can contain anything: text, graphics, a form to collect information or email addresses, even a little game. There are two downsides to pop-up ads, one for webmasters, one for advertisers. From a webmaster's point of view, pop-up ads wrench control of the browser away from their own page, and some badly-written pop-up ads may also crash certain browsers, leaving a permanently bad impression in a visitor's mind. From an advertiser's point of view, most pop-up windows can be minimized (hidden behind the other windows) with relative ease, so if the pop-up window is being used to rotate ads on a time basis, your advertisement may not even be visible but you'll still be charged for it! e) OPT-IN MAILING An advertising type that is rapidly becoming popular, opt-in mailing consists of sending an email message to a "pre-qualified" list of people i.e. an audience that has expressed an interest in receiving information on a given topic. Some sites sell their lists of newsletter recipients to advertisers, but most prefer to keep the email addresses secret and distribute the ad on the advertiser's behalf.

If you want to advertise using opt-in mailing, approach mailing lists with caution and check that they are being offered by a reputable firm. Some unscrupulous companies think nothing of "padding" their lists with the names of people who have no real interest, but who have been virtually press-ganged into joining. Opt-in mailing is not the same as SPAM. SPAM is another word for bulk mailing, and involves sending a message to people who have never shown any interest in receiving it. SPAM will destroy your business. Some companies claim to be opt-in whereas they are actually selling SPAM services. In general, don't expect to pay less than $0.02 per name for a real opt-in mailing - and many are around $0.1-0.2 per name. SPAM services sell their lists ridiculously cheap, for instance $250 for 10 million names. Don't get caught out!

f)HTML ADS HTML ads combine graphics and text with other HTML elements such as pulldown list, check boxes or forms. These can be very effective in getting traffic, but are much harder to serve and track, and generally require very sophisticated software to run properly. g)RICH-MEDIA ADS Rich media ads make use of multimedia elements such as sound, animation (often using plug-in such as Shockwave or Flash) and Java/JavaScript to drive the message home. Great for advertisers, less good for webmasters since the premium for rich-media ads is not particularly high, but the extra load time and

annoyance can be considerable (you'll lose your audience of visitors surfing from work on audio-equipped PCs for a start if your site suddenly blares out music!) h)HYBRID ADS Hybrid ads combine aspects of other advertising types, such as text and banners, to make a more effective pitch to visitors. i)SPONSORSHIPS/PARTNERSHIPS Not a different advertising type, exactly, but a different way of approaching advertising; sponsorships and partnerships usually involve embedding the advertising much more into the body of a site. Sponsorships, when done well, can be both discreet and effective. Much sponsorship takes the form: "Site brought to you by Sponsor" or "Sponsor's guide by Site"

Sample Advertising Page from



Ad Guidelines For your reference, here's a list of standard banner sizes available on our website. To find out how you can get the most out of your Web advertisement, please contact us. Banner I

Banner Size : 238*238 Banner Weight : Max 20k.


Banner Size : 468*60 Banner-III

Banner Weight : Max 16k.

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Social responsibility
Take a look at government advertising, and government has for many years been one of the very biggest advertisers in the United Kingdom. Ah, yes, say the critics and have you noticed how fond critics are of saying Ah, yes...? Ah, yes, but that isnt advertising... What nonsense. Of course, social advertising, public service advertising whether its for drinking and driving, social benefits, AIDS or public information of any kind is advertising and often state of the art advertising at that. It takes the proven techniques, techniques of simplification, dramatisation and, most important, personalisation and applies them to the way we live now. The communication skills honed on the humble packet of frozen peas or brand of petrol have made invaluable contributions not merely to the small reassurances of daily domestic life but to helping modify social attitudes and behaviour. Advertising today is many things. Its come a long way from the gaudy poster proclaiming the presence of Sunlight Soap. Its part of the social fabric of all our lives which, cosmetically, would be a good bit duller without it. More to the point, its a thread on which are strung several of the key economic elements that affect the workings of the business community and the comfort of the individual. IAA Perspectives N39 February 1996 Advertising The link in the chain of supply and demand by Sir Michael Perry, CBE, Chairman Unilever


5.1 INTRODUCTION The Oxford English Dictionary defines the word Advertise as Draw attention to or describe favourably (Goods, Services or vacant positions) in a public medium in order to sell, promote or seek employees (from old French a(d)vertir) . This clearly implies that the objective of an Advertisement is Sales and sales promotion as part of marketing activities to attract people to buy goods or services of a person or Organisations. Thus advertising becomes an inseparable function of marketing. Marketing is probably as old as the human civilisation. The evolution of marketing can be traced back to the Barter System of the ancient era. As the civilisation progressed, different progressive stages were observed, such as The stage of Money Economy , The stage of Industrial Revolution, The stage of competition to the current stage of Marketing. In the same context Marketing Concepts underwent complementary changes i.e. the exchange concept, production concept, product concept, sales concept, the marketing concept to the prevalent societal marketing concept. At the same time the advertising process also adopted to the changes in the marketing concepts. With the Public Interest as the main focus now a days. Cause related advertising is the banner of the day.

While it may not be possible to exactly derive the age of advertising, it can be said that it is more than 5000 years old. As evidenced form the proofs seen during Indus Valley Civilisation, the wooden statues erected by Inca tribe of Latin America, the pillar edicts constructed by King Ashoka and other structure during 563 BC to 232 BC. Curiously advertising is not limited to human beings. Just as in a rural Bazar the hawkers advertised their presence and that of their goods; a tiger in a jungle advertises its presence by roaring. The other from of advertising adopted by them is to advertise their territory, claw marks on the tree made by the by bear, urinary scent by tiger are a few examples. So for as human beings are concerned, the basic form of advertising was for religious purpose. As the time progressed the purpose of advertising also changed. While, in the Indian context, the changes have been discussed in earlier chapter, it now stands to crossroads.

5.2 RESEARCH METHODOLOGY:The research methodology adopted was as under: 5.2.1 PROBLEM IDENTIFICATION The Government policies of liberalisations, privatisations, de-licensing, coupled with globalisation, rapid changes in technology and explosion of Information Technology have drastically changed the marketing scenario in the country. Joints ventures, acquisition, mergers etc. are now here to stay. The entry of MNCs in Indian market has brought in conceptual changes in the objectives of

advertising. With growing public awareness, formulation of consumer protection act (1986) , value for money (VFM) demand by consumers, growing competition etc. have necessarily changed the out look of Advertising business . Further the Ethical Marketing concept gathering momentum, the task of an advertiser has become very complex. It is, thus, very vital to study the Indian marketing environment, the implication of changes that have taken place, to study the client relationship, and the future perspective of advertising Industry. The problems faced by the advertising agencies are not few. In view of the globalisations, liberalisations, growth of information technology etc, the futuristic line of approach needs to be defined .The entry of international companies in Indian advertising scenario have further complicated the matters. The increasing awareness of the consumer of their rights has drastically changed the strategies adopted. The government regulations e.g. Consumer protection act 1986 has led the agencies to rethink the ad process. A critical analysis is inevitable to mitigate the above said problem.

5.2.2 OBJECTIVES OF THE STUDY With the above background, the objectives of this research are: 1) To study the development of Advertising in India Experiences are for the past, planning is for future .For better planning the history and development of advertising is vital. One cannot plan for future without studying the past.

2)To study the present status of advertising agencies in India. How did we get here? This is important form the point of view of deciding where do we go from here? . This aspect is equally important to identify the root cause of the problems of the advertising agencies. 3) To study the problems faced by the advertising agencies in India The changed environment as brought in a new set of problems to the agencies. It is prudent to analysis these problems in order to diagnose the causes for it and the effects of it. This is bound to assist in deciding the future plan of action. 4)To study the emerging trends The Indian marketers have moved from national to Global scene and viceversa. The large number of product availability of different brands and in ample quantity has made the competition worthy of fight. It is essential that the recent trends, which emphasis on ethical marketing and concern for the environment need to be taken in to account while formulating the further polices. 5)To recommend plausible solutions for sustainable growth of advertising agencies in India. 5.2.3 HYPOTHESES: The globalisation, liberalisation of the Indian Economy has necessitated the Indian Advertisers to rethink on their marketing strategies with Cause related advertising as its motto. The problems faced by the advertising agencies are related with Ethical Marketing and Client Relationship.


Universe of study: For this research the Universe of study consist of i) All Indian Advertising agencies, including the independent Indian companies and those with foreign collaborations totalling to a number of 550 (accredited agencies) and several hundreds, which are not listed and are working on their own. ii) All Advertisers, who are utilising the services of ad agencies

Sampling techniques and sample size: Non-Probability, Judgmental sampling technique has been used to conduct the study. It is to be mentioned here that a total of 589 respondents (clients and agency executives) were contacted across seven centres Mumbai, Delhi, Kolkata, Chennai, Bangalore Hyderabad and Nagpur. This was done so with the assumptions that the companies from these centres represent the Universe. Out of approximately 589 samples, 98 completed surveys were received, representing a completion rate of 16.63 percent.

Actual In-Tab Responses Agency Advertiser Total 56 42 98


The questionnaire was designed after conducting in-depth interviews with advertisers and agency executives. A structured questionnaire was used to capture advertising agencies ranking and perceptions. The questionnaire was divided into two sections, objective and subjective. The objective section contained standard, factual information about the advertising agencies. In the subjective section, each agency, advertisers were asked to strategically assess the queries and respond according to their unique experience.

Overall rating for identifying the most admired advertising agency: Respondents were asked to rate the agencies on an overall level (taking all aspects into consideration) using a 10-point scale. Subsequently, ad agencies were also evaluated on the following critical parameters:

Quality of client servicing: which included aspects like ensuring timelines, understanding, implementing strategies and team stability.

Overall creative quality: Including developing new ideas, execution of ideas and creative strategies.

Account planning: Including aspects like consumer insights, using research for better insights, own initiatives on brand development, and value add-on communication strategies.

Overall Partnership: Optimising budget, long-term approach, keeping brand in focus.

Media: Including role in media planning, appreciating & understanding media strategies

Market recognition: Winning awards, managing their PR. Overall organisation/people: Which included training and grooming talent, exposure to new learnings, variety of accounts handled, investment in better work environment and learnings from the parent company.

Other aspects: Including smooth billing procedures, managing financial dealings with clients & efficient logistics.

The endorsements on the above factors were used to work out advertising agencies strengths and weaknesses. All those participating in the survey were exposed to the list generated from the study (as mentioned above) and then asked to rank them in order of preference for the most influential advertising agency.

The findings in this research have been reproduced in respect of Top 51 Ad Agencies in India (Chapter No: VI A Status Report of Advertising agencies and Chapter no: IX findings, conclusions and recommendations of the study) Sampling Units: The advertising agency perception study looked at going beyond the arenas of mere numbers, or creativity, and sought to evaluate ad agencies in a more holistic manner. Hence a wider audience was used to evaluate ad agencies. It included:

Advertisers, who are using the services of the advertising agencies. Representatives of advertising agencies.

5.2.6 DATA COLLECTION: Primary Data The Primary data was collected from Advertisers and Advertising agencies through Questionnaire. The sampling units selected for this study are; Representatives of advertising agencies and Advertisers who are using the services of these agencies. Interaction based on Questionnaire with CEOs, marketing managers, executives of companies through post, e-mail, phone calls and personal interviews across Mumbai, Delhi, Kolkata, Chennai, Bangalore Hyderabad and Nagpur have a deep insight of the subject.

Secondary Data Most of the secondary data for this research work was colleted from the websites of various advertising agencies of India and aboard. Substantive data was also obtained form the Journals published by the associations of advertising agencies, trade magazines, news paper and Scientific Publications etc.

5.3 LIMITATIONS It needs to be mentioned here that non-availably of data with specific reference to India was a major impediment to this research work. Also, reluctance on the part of executives to impart with actual financial data was

another. For this research work the researcher had to rely heavily on the global publications and views expressed by experts. Given the number of responses, one would not be prudent to widely generalize. The population included only the seven centers across India. Additional strategy statements could have been included in this survey. Also, other potential influencing factors were not evaluated. This study is an attempt to understand prevailing marketing environment in relation to the market and the subsequent effect of this changes on the Indian advertising agencies. It is a fact that marketing has turned Ethical. Profit

alone is not the ulterior motive of business organizations. Advertising agencies are the vital link between the Advertisers and the consumers. In the perceptive of human values, environment and ethical practices the advertising agencies has to give more stress on client- Agencies relationship with the ultimate objectives of achieving sustainable growth. This is a research on the advertising services industry covering all the different media including press, television, video, movies, and outdoors in India. Market information and statistics for other services such as public relations, and market research are, however, excluded from the scope of this research.



If I were starting my life over again, I am inclined to think that it would go into the advertising business in preference to almost any other...The general raising of the standards of modern civilisation among all groups of people during the past half century would have been impossible without the spreading of the knowledge of higher standards by means of advertising. President Franklin Delano Roosevelt



The following section contains Name, addresses, e-mail, website, Capitalised billings, Name of Executive and major clients of some of the principal companies identified as operating within the market sector discussed in this research.

Top 51 Advertising agencies in India for the year 2002-03 (Alphabetical Listing) (Based on the primary data)

1) Adbur Pvt Ltd Abdur Ltd, Kaushambi, Sahibabad, Ghaziabad-201 010. Tel: 477 7901-7920, 477 8501-8520 Fax: 477 7935 E-mail:

Capitalised billings: Rs 114.72 million, Television Billings: Rs 419.97 million Senior Executive: Rakesh Endlaw, Chief Executive officer Major Clients: Sanat Products (Bioslim slimming agent); Dabur Pharmaceuticals (Lona Low-sodium salt). Dabon International Ltd (Lebon-Cheese)

2) Akshara Advertising

302-303-310 Meghdoot, 94 Nehru Place, New Delhi - 110 019 Tel: (0091 11) 641 6253, 641 6258, 640 4264-66 Fax: (0091 11) 648 1655 Branch telephone numbers: Hyderabad: (0091 40) 500 028 Chennai: (0091 44) 461 5265, 461 5870 Bangalore: (0091 80) 220 3616 Nagpur: (0091 712) 528 923 Jaipur: (0091 141) 612 670 E-mail:,

Capitalised billings: Rs 196.76 million Senior Executive: S K Swami, Chief Executive Major Clients: Rajasthan (University of Rajasthan); ONGC; MTNL. 3) Ambience D'arcy Ambience Advertising pvt. Ltd, Neelam Centre, 'A' wing, S K Ahire Marg, Worli, Mumbai - 400 025 Tel: (0091 22) 496 2898, 494 4640, 492 3925, 494 8696 Fax: (0091 22) 493 7847, 493 4036 Branch telephone numbers: Delhi: (0091 11) 646 9572 E-mail:

Capitalised billings: Rs 1014.00 million,Television billings: Rs 474.00 million Senior Executive: Ashok Kurien, Chairman & Managing Director Major clients: Times of India Group (planet M/ Music store; Emami Group of companies (Himani sona chandi, Nirog dant power, tooth power); Procter & Gamble(Whisper, vicks, healthcare); TVS Suzuki Ltd (Suzuki Shaolin, motorcycle), Philips India Ltd (Domestic appliances) 4) Chaitra Leo Burnett Pvt Ltd 9/11 NS Patkar Marg, AB Godrej Chowk, Mumbai - 400 036 Tel: (0091 22) 380 7070 Fax: (0091 22) 380 4542 Branch telephone numbers: Bangalore: (0091 80) 527 2507-9, Fax: (0091 80) 527 2506

Calcutta : 280 1022 Delhi: (0091 11) 5069831-34 Fax: (0091 11) 506 5961 E-mail:

Capitalised billings: Rs 1967.21 million,Television billings: Rs 904.82 million Senior Executive: Arvind Sharma, Managing Director Major Clients: ICICI; Bajaj Auto; Dabur India; BPL Ltd; Coca cola(mazaa/beverage); Toyota (Qualis); Amtrex Hitachi(Air-conditioner) 5)Contract Advertising (India) Ltd Vaswani Chambers, 264, Dr.A B Road, Worli Mumbai 400 025 Tel: (0091 22) 4306041, 4306042 Fax: (0091 22) 4303808/7890 Branch telephone numbers: Bangalore: (0091 80) 221 4827, 221 9937 Calcutta: (0091 33) 2825824/5/6 Delhi: (0091 11) 561 8571/ 2 Chennai: (0091 44) 4616433/6501 E-mail:,

Capitalised billings: Rs 1786.88 million,Television billings: Rs 331.59 million Senior Executive: Colvyn J Harris, President

Major Clients: Bajaj Ltd (spirit scooterettes); Indian Express (matrimonial); Cadbury India Ltd (picnic, milk treatChocobix); Dabur foods Ltd(real/fruit juice); MTNL (corporate) 6)Crayons Advertising and Marketing Pvt Ltd B-23, Greater Kailash-I, New Delhi - 110 048 Tel: (0091 11) 621 2347 Fax: (0091 11) 647 4765 Branch telephone numbers: Mumbai: (0091 22) 605 4884/3383, 604 5828 Chandigarh (0091 172) 710 532/33 Jaipur: (0091 171) 374 774, 373 290 E-mail: URL:

Capitalised billings: Rs 286.20 million Senior Executive: Kunal Lullani, Managing Director

Major Clients: Marshal (Mahindra & Mahindra/jeep); Jindal art glass (Jindal Dyechem/Stained glass) 7)Creative Advertising 143, M G Road, 2nd floor, Sasson Building, Kalaghoda,Mumbai - 400 001 Tel: (0091 22) 267 1763, 267 1991 Fax: (0091 22) 267 0860 Branch telephone numbers: E-mail: ,

Capitalized billings: Rs 105.00 million,Television billings: Rs 49.00 million Senior Executive: Vishwanath Iyer,Director Major Clients: trendly systems (TSL/telemedia service) 8)Enterprise Nexus Communications Pvt. Ltd 367 Sane Guruji Marg, Agripada, Mumbai - 400 011 Tel: (0091 22) 300 1112 Fax: (0091 22) 300 1017 Branch telephone numbers: Delhi: (0091 11) 652 6826 Bangalore: (0091 80) 529 4228 E-mail:

Capitalised billings: Rs 1587.48 million,Television billings: Rs 404.00 million Senior Executive: Mohammed Khan, Chairman

Major Clients: Nimbus (Nirvanazone/youth portal); Daewoo (Matiz,Nexia/cars); Emami(Herbal skin & hair care range) 9)Euro RSCG Advertising Pvt Ltd Brady Glady's Plaza, Unit No 5, 1st floor, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013 Tel: (0091 22) 493 7188 Fax: (0091 22) 493 7183 Branch telephone numbers: Bangalore: (0091 80) 529 4101 Calcutta: (0091 33) 464 7367 Delhi: (0091 11) 686 5319

Chennai: (0091 44) 499 1038 URL:

Capitalised billings: Rs. 1521.69 million,Television billings: Rs. 391.80 million Senior Executive: Ishan Raina, Chairman-CEO Major Clients: HDFC Securities (; Pacific Online (portals); Rolta (; Weekender (weekender garments); Torrent Pharma (Dilzem Surge); 10)Everest Integrated Communications Limited Kitab Mahal, 192, Dr D N Road, Mumbai - 400 001 Tel: (0091 22) 207 1771-4 Fax: (0091 22) 207 4682 E-mail: URL: Capitalised billings: Rs. 707.00 million,Television billings: Rs. 297.15 million

Senior Executive: Niloufer Kapadia, Chairperson Major Clients: Ajanta Pharma Ltd (Pinkoo Cough Syrup & Gripe Water/healthcare); Honda Motors; National Panasonic India Ltd (Washing Machines/Consumer goods)

11)Equus Advertising Co Ltd Apeejay Business Centre, Apeejay House, 15 Park Street, Calcutta. Tel: (0091 33) 217 1136 Fax: (009 33) 217 1137 Branch telephone numbers: E-mail:

Capitalised billings: Rs. 240.32 million,Television billings: Rs. 34.23 million Senior Executive: Suhel Seth, CEO Major Clients: EL Net 3L (Computer Academy); Indian Oil Corporation(Estern region, Servo and other products); Sita World Travels (Travel & Tourism); CocaCola India (Regional - soft drinks); Apollo Tyres (Amazer Tyre, corporate) 12)FCB-Ulka Advertising Ltd Nirmal, 4th Floor, Nariman Point, Mumbai - 400 021 Tel: (0091 22) 202 6884, 285 2184, 283 6068 Fax: (0091 22) 287 5947, 283 6072 Branch telephone numbers: Delhi: (0091 11) 577 2810 Hyderabad: (0091 40) 434 1606 Calcutta: (0091 33) 282 2525 Bangalore: (0091 80) 558 7467 Kochi: (0091 484) 380 323 Chennai: (0091 44) 859 1828 E-mail: Capitalised billings: Rs 5215 million, Television billings: N.A.

Senior Executive: Anil Kapoor, Managing Director & CEO Major Clients: N.A.

13)Fountainhead Communications Pvt Ltd Aarthi Chambers, 2nd Fl, 189 Mount Rd, Chennai - 600 006, India Tel: (0091 44) 852 6430 Fax: (0091 44) 852 4215 E-mail:, Capitalised billings: Rs 326.20 million, Television billings: Rs 171.20 million Senior Executives: B S Raj Narain, Director Major Clients: CavinKare Ltd (Talcum power, face cream, branded food);

Srinivas Cellcom (Aircell cellular services Telecom); Grundig India (Grundig TV) 14)Fortune Communications Ltd Dr Sunderlal Bahl Path (Goa Street), Ballard Estate, Mumbai - 400 038 Tel: (0091 22) 262 0227/ 1251/ 2542 Fax: (0091 22) 262 0547 Branch telephone numbers: Chennai: (0091 44) 828 1777, 823 2299 Capitalised billings: Rs 128.13 million, Television billings: Rs 0.18 million Senior Executive: R M Basu, President & GM Major Clients: Southern Railways-Chennai (Services); UTI-Mumbai (UTI Mutual Funds, Mutual Funds) 15)Graphisads Pvt Ltd 219, Hans Bhavan, 1, Bahadurshah Zafar Marg, New Delhi - 110 002 Tel: (0091 11) 331 8086/ 7112 Fax: (0091 11) 332 3958 E-mail: Capitalised billings: Rs 228.51 million, Television billings: Rs 10.53 million Senior Executives: Mukesh Gupta, Managing Director

Major Clients: Birla Home Finance; HFCL (infotech); JMD Realtors Pvt ltd. Allahabad Bank (banking); Delhi Financial Corporation (diversified);

16)Hindustan Thompson Associates Lakshmi Bldg, Sir Pherozeshah Mehta Rd, PO Box 541, Mumbai - 400 001, India Tel: (0091 22) 266 0190 Fax: (0091 22) 266 0186, 269 2518 Branch telephone numbers: Calcutta: (0091 33) 247 8361 Delhi: (0091 11) 361 0081 Chennai: (0091 44) 827 1871 Bangalore: (0091 80) 227 3348 E-mail: Capitalised billings: Rs 10 777.05 million,Television billings: N.A.

Senior Executive: M K Khanna, Chief Executive Major Clients: Apollo Hospital (Apollo Hospital & healthcare); DSP Merrill Lynch (Investment banking); Hero Honda(CBZ/automobiles); Satyam Infoway(Software); Indian Army; Indian Navy; News Television India Pvt Ltd(Star news/Media); Standard Chartered (Personal Banking & Cards); Ministry of Finance (VDIS); Ministry of Defence (Indian Army - recruitment); Pepsi Foods (7 UP, Mirinda, soft drinks); Star TV Network (Star Plus, Star Movies, Star News); Omega (watches); ESPN (Channel promo); 20th Century Fox (film releases); Godrej GE (washing machines); Madura Garments (Van Heusen, garments); Hero Motors (Hero Winner, automobile); Parle (Monaco, biscuit); Hughes Ispat (telecommunication) 17)Hakuhodo Percept Percept House, 2, Sant Nagar, New Delhi- 110 065 Tel: (0091 11) 628 8870, 628 2523,621 1130 Fax: (0091 11) 628 8871 E-mail: Capitalised billings: Rs 183.36 million, Television billings:Rs 12.27 million

Senior Executive: Junki Imaki MD Major Clients: Konica (Konica, Photographic films); Epson (printers) 18)IB&W IB&W Communications Pvt Ltd 71 Gandhi Nagar, DS Marg, off Dr E Moses Rd, Worli, Mumbai - 400 018, India Tel: (0091 22) 494 4087-89, 492 0291-94, 496 0029-32, 497 1401-04 Fax: (0091 22) 497 1398 Branch telephone numbers: Delhi: (0091 11) 628 5414/15 Bangalore: (0091 80) 228 0756/57 Coimbatore: (0091 422) 493 342 Chandigarh: (0091 172) 782 591 E-mail:

Capitalised billings: Rs 1657.66 million, Television billings: Rs 162.73 million Senior Executive: Mukesh Gupta, Chairman & Managing Director Major Clients: Pantaloons Retail India (Fashion Retail chain); J K Cement (J K White/Cement); MTNL (telecommunication); ION Exchange (water Management System) ONGC; Airport Authority of India; Business India (Exhibitions); Living Media (Music Today - music); Concern India (NGO)

19)Interface Communications Limited Haines Road Property, 81 Dr E Moses Road, Worli, Mumbai 400 018 Tel: (0091 22) 4963919 Fax:491 4538 E-mail: Capitalised billings: Rs 375.30 million,Television billings: N.A. Senior Executive: Niteen Bhagwat, Executive Director Major Clients: N.A.

20)Interact Vision Advertising & Marketing Pvt Ltd RZ-1, Bhavani Kunj, opp D-1 Market, Vasant Kunj, New Delhi - 110 070 Tel: (0091 11) 613 5134/5 Fax: 613 5136. Branch telephone numbers: E-mail: Capitalised billing: Rs 262.83 million,Television billings: N.A. Senior Executive: Prabir C Purkayastha, President Major Clients: Kirloskar Airtech Ltd (air-conditioner); Bayer India (Dithane M-45 Potato); Reliance Telecom (only smart, Internet); Essar Cellphones (Speed prepaid card); Kirloskar Airtech (Kirloskar, air conditioner); Reliance Industries (Reliance

readymade garments); Zandu Pharmaceuticals Works (Trishun Rub - cold rub) 21)Imageads Imageads and Communications Pvt Ltd 103 Mittal Chambers, Nariman Point, Mumbai - 400 021, India Tel: (0091 22) 202 2425/6416 Fax: (0091 22) 202 8858 Branch telephone numbers: Bangalore: (0091 80) 559 6231/ 6597 Delhi: (0091 11) 338 3419/ 4580 Chennai: (0091 44) 826 2306/ 1476 Hyderabad: (0091 40) 776 8467/ 2908 E-mail: Capitalised billings: Rs 242.46 million,Television billings: Rs 11.84 million Senior Executive: CD Ramachandran, Managing Director Major Clients: Webley Jeans (garments); Vysya Bank (Bank/finance); Yonex(jeans and garments); IRDA (Insurance service) 22)Jelitta Publicity Wattasseril Building, PB No 8, Baker Junction, Kottayam - 686 001 Tel: (0091 481) 564 075/806 Fax: (0091 481) 563 127 Branch telephone numbers: Chennai: (0091 44) 826 9323 Fax: 822 6297 Kochi: (0091 484) 367 241, 361 928 Fax:369 588 Trivandrum: (0091 xxx) 473 128 Fax: 463 302 Trichur: (0091 487) 384 807 Fax:384 308 Kozikode: (0091 495) 303 875 Coimbatore: (0091 422) 235890 Fax: 235890 E-mail: N.A. Capitalised billings: Rs 119.73 million,Television billings: Rs 26.46 million Senior Executive: Joy Thomas, Managing Director Major Clients: South Indian Bank (banking); Hero Honda (Hero Honda Motor cycle); Travancore Cements (Super Shelcem cement paint, Vembanad white cement); Samsung Electronics (Regional - TV & Electronic systems); Coir Board (mats, mattings & geo-textiles); Coca Cola Bottling (Regional)

23)Kamerad-news MBC First Floor, 134, Infantry road, Bangalore-560001 Tel: (0091 80) 2868278, 2863276 Branch telephone numbers: Chennai: (0091 44) 825 6460 E-mail: Capitalised billings: Rs 162.34 million,Television billings: Rs 3.02 million Senior Executive: K R Bilimoria, Director Major Clients: Unitech Ltd(Unitech projects/builders); Silklens Pvt Ltd (Contact lens); Express Publication Ltd(The New Indian Express/Publication); 24)Mudra Communications Ltd Mudra House, Sheth CG Rd, Ellisbridge, Ahmedabad 380 006 Tel: (0091 79) 656 5659 Fax: (0091 79) 642 5058 Branch telephone numbers: Ahmedabad: (0091 79) 646 1530/23 Bangalore: (0091 80) 5588692 Delhi: (0091 11) 616 5290/92 Mumbai: (0091 22) 496 4800 Chennai: (0091 44) 825 0932, 8273151 Calcutta: (0091 33) 474 9084/85 Hyderabad: (0091 40) 3314181, 3390494 Kochi: (0091 484) 365750/301 E-mail: URL: Capitalised billings: Rs 5232.54 million, Television billings: N.A. Senior Executive: AG Krishnamurthy, Chairman & Managing Director Major Clients: Mahanagar Telephone Nigam Ltd (Corporate); Indian Express (News paper); Mid-Day (website); Global Trust bank (Banking);Indian Tourism Development Corporation (Hotels); Business Standard (Publications); Raj TV (TV Channel); Henkel Spic India (Detergents); Godrej Foods; Ahmedabad Electricity Co Ltd (corporate); LIC of India (Insurance - services); Honda Siel Power Products (gensets); Satyam Computer Services Ltd (Satyam - computer software); Satyam

Infoway Ltd (Satyam - internet services); Compaq (Compaq - computers); Cadila Healthcare Ltd (EverYuth - healthcare); Blow Plast Ltd (VIP Skybags - luggage carrier); Dabur Ayurvedic Specialities Ltd (Nature Cure - Ayurvedic products); Henkel Spic India Ltd (Fa - soap); Hindustan Motors Ltd (Mitsubishi Lancer automobile) 25)McCann-Erickson India Ltd 8, Balaji Estate, Guru Ravidas Marg, Kalkaji, New Delhi 110 019 Tel: (0091 11) 600 2600 Fax: (0091 11) 646 3875, 600 2647 Branch telephone numbers: Bangalore: (0091 80) 221 9058, 227 0289 Calcutta: (0091 33) 246 1001-3, 244 7829 Chennai: (0091 44) 435 9228, 432 3481 Mumbai: (0091 22) 416 0470/72 E-mail: Capitalised billings: Rs 3479.53 million, Television billings: N.A.

Senior Executive: Sorab Mistry, Chairman & CEO Major Clients: Reckitt& Colman(Cherry Blossom/shoe polish); Usha Martin Telecom(telecom); Coca-Cola (Kinley soda water, Diet coke, beverages, Sprite Soft drink); Nestle(sunrise/coffee); BPL (Gas tables); Motorola (Cellphones & Pagers); Khaitan (Fans); Nestle (Media buying); Stracon (Corporate); Goodyear India (Goodyear - tyre); Travel Corporation of India (tourism); Hong Kong & Shanghai Banking Corporation Ltd (HSBC - credit card, personal banking & corporate); MasterCard (credit cards) 26)MAA Bozell Communications Ltd No. 6, MAA House, Service Rd, Domlur Layout, Bangalore - 560071 Tel: (0091 80) 556 8910, Fax: (0091 80) 554 2712 Branch telephone numbers: Chennai: (0091 44) 499 1353/1466 Delhi: (0091 11) 691 4640/4795

Mumbai: (0091 22) 267 4609 Hyderabad: (0091 40) 776 8261/0674 Cochin: (0091 484) 354 614/09 E-mail: URL: Capitalised billings: Rs 1753.80 million, Television billings: Rs 427.10 million Senior Executive: Bunty Peerbhoy, Chairman Major Clients: Tata International (garments); Volvo (Trucks); tata Tetley (tea); SmithKline Beecham (Zental/ Pharma); MTNL (MTNL - Telephone Services); K.Raheja Group of Companies (Club Cabana - leisure resort, Real Estate); Dr. Reddy's Laboratories (Velocit - Healthcare); Vizag Steel Plant (Vizag Steel Steel); Escotel Ltd (Escotel - cellphones); Bausch & Lomb India Ltd (Optima contact lenses & vision care, Ray-Ban - sunglasses, eyeware, prescription glasses) 27)Madison Advertising Pvt Ltd 3rd Floor, Zoroastrian Bldg, 16, Horniman Circle, Fort, Mumbai 400 023 Tel: (0091 22) 266 3997, 266 0425, 269 4167 Fax: (0091 22) 266 2776, 269 4168 Branch telephone numbers: Sewri: (0091 22) 415 4467-70Delhi: (0091 11) 338 1053/1146 Bangalore: (0091 80) 558 8785, 559 4782 E-mail: Capitalised billings: Rs 658.62 million ,Television billings: Rs 1406.80 million Senior Executive: Sam Balsara, Chairman & Managing Director Major Clients: Milton Plastic Ltd (Plastic/thermoware); Rasna Enterprises Ltd(Spread Maker/Jam); Camlin Ltd (Colours, stationery); Som Distilleries Ltd (Hunter Beer) 28)Marketing Consultants & Agencies Ltd Mehra Complex, 42 Millers Road, Bangalore - 560 052 Tel: (0091 80) 2256287/88/4289 Fax: (0091 80) 225 2614 E-mail:, URL:

Capitalised billings: Rs 238.65 million,Television billings: Rs 1.40 million Senior Executive: M. Rudradev, Managing Director Major Clients: Dept. of Information Technology,Govt of India (Booklet and film); KS&DL (Mysore Sandal Soap, premium soap), KSIC (Karnataka Silks - sarees & dress materials); KSHDC (Cauvery - handicrafts) 29)MCS Communications Pvt Ltd 20/1 Bagirathi Ammal St, T Nagar, Chennai 600 017 Tel: (0091 44) 826 9945/4319, 8269730 Fax: (0091 44) 825 1782 Branch telephone numbers: Delhi: (0091 11) 618 1775, 618 1776 E-mail: Capitalised billings: Rs 168.60 million Television billings: Rs 20.29 million Senior Executive: R Ravishankar, Managing Director Major Clients:Modi Xerox (photocopiers); Bajaj Auto Ltd (Bajaj/motor bikes, scooter); HDFC Bank (Bank/Auto finance) 30)Market Missionaries (India) Pvt Ltd A-5, Vidyadhar, 1313, Sadashiv Peth, Pune - 411 030 Tel: (0091 20) 4478200/8623 Fax: (0091 20) 473170 E-mail: URL: Capitalised billings: Rs 160.79 million,Television billings: N.A. Senior Executive: Jagdish Patankar, Managing Director Major Clients: Ee-TV(ETV Marathi/regional channel); Silicon Mountain(Simo Telecom); JMD Marketing (JMD/Car loans); Tata Autocomp Systems (Software, consultancy services); Kinetic Motor Co Ltd (Kinetic range, regional - twowheelers); Maharashtra State Road Development Corporation (MSRDC); Usha International Ltd (Usha, regional - consumer durables) 31)Moulis Euro RSCG (I)Pvt Ltd

4 & 5, 1st Floor, Rams, 27 West Cott Rd, Royapettah, Chennai 600 014 Tel: (0091 44) 852 2828, 857 0515, 853 3480 Fax: (0091 44) 853 3480 Branch telephone numbers: Bangalore: (0091 80) 558 2146, 5550229 Delhi: (0091 11) 613 5538 Mumbai: (0091 22) 269 5102, 2651989, 2656597 2672236 Hyderabad: (0091 40) 7816890 Trivandrum: (0091 xx) 3231442 Calicut:320 238 Kochi:390 867, 432 628 E-mail: URL: Senior Executive: R Ramesh, Managing Director

Major Clients: Global Software Ltd(Software); Central railways(Railways); Banking service recruitment board(recruitment); OBSI (Information Technology); NIFT (Fashion Design Training); ONGC (Regional); LIC (LIC - insurance); Konkan Railway (Konkan Railway - rail transport); SmithKline Beecham (Smithkline Beecham - operational advertisements, southern region) 32)National Advertising Agency PT-62/12, Kalkaji Extention, Sansad Kung, New Delhi-110 019 Tel: (0091 11) 6445592, 6426353, 6419764 Fax: (0091 11) 6220415 Branch telephone numbers: Kanpur:350278 Lucknow:217386 Bhubaneswar:435074 Capitalised billings: Rs 153.00 million, Television billings: Rs 40.00 million Senior Executive:Gautam Sen, Partner Major Clients: N.A 33)Ogilvy & Mather Ltd Trade Centre, Third Floor, Senapati Bapat Marg, Lower Parel, Mumbai 400 013 Tel: (0091 22) 491 3877 Fax: (0091 22) 491 3838 Branch telephone numbers:

Delhi: (0091 11) 631 7384-91 Calcutta: (0091 33) 247 3406-7 Chennai: (0091 44) 852 0677/0887/0967 Bangalore: (0091 80) 558 4566/4816 OgilvyOne Worldwide-Bangalore: (0091 80) 5065046-48 E-mail: N.A Capitalised billings: Rs 7425.78 million ,Television billings: 1852.73 million Senior Executive: Ranjan Kapur, Managing Director Major Clients: IDBI Mutual Fund (Mutual fund); SBI Mutual Fund(Mutual Fund); TTK Textiles (Tantex/Textile); J K Tyres(Tyres); Pantaloon Fashion India Ltd(Garments); Levers, Cadbury, Louis Philippe (coporate); UTI (MIP'97/Financial); TVS Suzuki (corporate): Tata Telservices (corporate), Tata Communications Ltd (corporate); Hindustan Lever Ltd (Brooke Bond, Lipton - tea and health); Discovery Channel Inc (Discovery Channel - television channel); ITC Ltd (corporate); MIRC Electronics Ltd (Onida - television); The Chase Manhattan Bank (corporate); Birla 3M Ltd (Scotch Brite - cleaning aid); J M Morgan Stanley (J M Morgan Stanley - investment bank); Hero Honda Motors Ltd (bikes); United Television (television media); Castrol India Ltd (Castrol - lubricants); Hutchison Max Telecom Ltd (Max Touch - cellular operator); TELCO (Tata Safari, Sierra, Sumo - sports utility vehicle) 34)Pressamn Advertising and Marketing Ltd Pressman House, 10A, Lee Road, Calcutta 700 020 Tel: (0091 33) 280 0815-8, Fax: (0091 33) 280 0813 Branch telephone numbers: Mumbai: (0091 22) 2042881/3607/2767 Banglore: (0091 80) 226 9336, 2281789 New Delhi: (0091 22) 331 5292, 372 5930/33 Capitalised billings: Rs 1872.74 million, Television billings: Rs. 47.30 million

Senior Executive: Navin Suchanti, Director Major Clients: Delhi Govt(Government); Delhi Police(Social awareness); Calcutta Telephone(Telecom); Kajaria Ceramics Ltd (Kajaria - ceramic tiles); Eastern railways ( Railways); Videsh Sanchar Nigam Ltd (Telecom services); Tata Mutual Fund (Mutual fund)

35)Percept Advertising Ltd 22 Raghuvanshi Mills Compound, 11/12, Senapati Bapat Marg, Mumbai 400 013 Tel: (0091 22) 491 8811 Fax: (0091 22) 491 1281 Branch telephone numbers: Delhi: (0091 11) 621 4383/1130 Fax:(0091 22) 6217357 Baroda: (0091 265) 324 358 Fax:(0091 22) 324358 Pune: (0091 20) 628 432 Bangalore: (0091 80) 229 0270 Fax:(0091 22) 2244929 Lucknow: (0091 522) 323 126 Fax:(0091 22) 332228 E-mail: Capitalised billings: Rs 1098.76 million, Television billings: Rs 127.01 million Senior Executive: Harindra Singh, Managing Director Major Clients: Coca-cola India Ltd (Coke/beverages); Sahara India Ltd(Amby valley, (Siyaram Silk Mills (Oxemberg ready made garments); Bank Of Baroda (BOB card credit card); Godrej Boyce (Godrej office furniture); Mumbai Gold Club (Mumbai Gold Club - gold jewellery); Godrej & Boyce Mfg Co Ltd (Ultima Chairs - office furniture) 36)Publicis Zen Communications Pvt Ltd Publicis-Zen House, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai 400 013 Tel: (0091 22) 493 8828, 4925031 Fax: (0091 22) 4930709 E-mail:

Capitalised billings: Rs 667.37 million, Television billings: Rs 342.70 million Senior Executive: Bharat Dabholkar, Managing Director Major Clients: Alliance CapitalLtd(Alliance mutual fund); United Breweries Ltd(Ice Beer, Beer); Siemens Ltd(Industrial products); Kirloskar Airtech Ltd(Kirloskar airconditioners); Unit Trust of India(Equity scheme/Mutual funds/Gsec); Tata Tea Ltd (Agni - tea); Hewlett Packard (HP - computers); Tata Chemicals (Tata Rakshak - detergent) 37)Purnima Advertising Agency 35 Shrimali Co-op Society, opp Navrangpura Police Stn, Navrangpura, Ahmedabad 380 009, India Tel: (0091 79) 643 0179, 644 6619 Fax: (0091 79) 642 7967 Branch telephone numbers: Mumbai: (0091 22) 460 3114/5 E-mail: Capitalised billings: Rs 383.97 millio,Television billings: Rs 366.13 million Senior Executive: Ashok S.Soni, Managing Director Major Clients: N.A. 38)Quadrant Communications Ltd 13A, Karve Road, Kothrud, Pune 411 029 Tel: (0091 20) 333 917/623 Fax: (0091 20) 331 965 E-mail: Capitalised billings: Rs 486.50 million,Television billings: Rs 26.00 million Senior Executive: Ms G.V.Kirloskar, President Major Clients: Tata Honeywell Ltd(Security System); United Phosphorous Ltd(Pharmaceuticals); Bank of Muscat Ltd (banking service); Duraware India Ltd (Nirlep - kitchen appliance); Bajaj Auto India Ltd (Bajaj M80 - two wheeler); Akai India Ltd (Akai - television) 39)Rediffusion-DY&R

Young & Rubicam Ltd, 4th Floor, Sterling Centre, Dr A.B.Road, Worli, Mumbai 400018 Tel: (0091 22) 493 7308/13, 494 0206/5750 Fax: (0091 22) 493 6557 Branch telephone numbers: Bangalore: (0091 80) 229 3067-69 Fax: 222 9297 Calcutta: (0091 33) 247 5432, 240 0328/1732 Fax: 247 5431 Delhi: (0091 11) 696 1513/ 3149, 6521940-8 Fax: 685 8109 Chennai: (0091 44) 855 4643, 855 4436 Fax: 855 4674 E-mail: Capitalised billings: Rs 4431.69 million, Television billings: N.A. Senior Executive: Arun Nanda, Chairman & Managing Director Major Clients: Godfrey Philips (Four square/cigarette); Haldia Petrochemicals(Petrochemicals); Evian (Mineral Water)BPL (Colour television, Refrigerator, home appliances), Ericsson Mobile (Cellphones); SAIL (Corporate); CitiBank (Corporate); Cannon (printers, calculators); Bharti BT Ltd (Internet service); BPL Mobile Communications Ltd ( prepaid cellular cards); Exide Industries Ltd (Exide - automotive batteries); SBI Funds Management Ltd (SBI mutual funds) 40)RK Swamy/BBDO Advertising Ltd Film Chamber Buildings, No 604, Anna Salai, Mount Road, Chennai - 600 006 Tel: (0091 44) 829 2300, 829 2302 Fax: (0091 44) 829 5557 Branch telephone numbers: E-mail:, Capitalised billings: Rs 2315.95million,Television billings: N.A. Senior Executive: R.K. SWAMY, Chairman Major Clients: Cisco System(network solution); Abbott Laboratories India Ltd(Healthcare); Mercedez Benz (Automobiles); MTNL(Telecommunication); Sony India Ltd(Sony/TV); Fujitsu 'O' general(Airconditioners); SQL Star International Ltd(Computer education);Dalmia Cement (Cement); Wrigleys India

(Wrigleys Juicy Fruit chewing gum); Dena Bank (Banking); ANZ Grindlays (Credit cards)

41)Ram Advertising Service SCO 1112-13, Sector 22-B, Chandigarh 160022 Tel: (0091 172) 702 361, 705 168 Fax: (0091 172) 707 283 Branch telephone numbers: Mumbai: (0091 22) 264 1553 Delhi: (0091 11) 371 8224 Fax: 331 6089 E-mail: Capitalised billings: Rs 158.27 million,Television billings: N.A. Senior Executive: Pawan Kumar Tah, Managing Director Major Clients: N.A. 42)Rashtriya Advertising Agency Rashtriya tower, 38 Jhansi Road, Jhandewalan, New Delhi-110055. Tel: (0091 11) 351 6326-29, 354 8182, 351 6801-3, 753 6032 Fax: (0091 11) 753 5072 Branch telephone numbers: Mumbai: (0091 22) 204 5128, 282 4769, 281 4463 Lucknow: (0091) 201 046 E-mail: Capitalised billings: Rs 111.83 million,Television billings: Rs 18.03 million Senior Executive: Dinesh Gupta, President Major Clients: Northern Railway; IRCON International Ltd(Govt); NHDC(Ministry of Textile); Power Finance Corporation; western railway; Reserve Bank of India; Airport Authorit of India; Akai(electronics); Videocon (electronics); Food Corporation of India 43)Saatchi & Saatchi Pvt Ltd 1st floor, Sitaram Mills Compound, 1st Floor, N.M.Joshi Marg, Mumbai - 400 011 Tel: (0091 22) 300 0301/3/4 Fax: (0091 22) 300 0302

Branch telephone numbers: Bangalore: (0091 80) 509 1171-3/5 Chennai: (0091 44) 452 193 Calcutta: (0091 33) 242 5577/2595 Delhi: (0091 11) 6142180/6142159 E-mail: Capitalised billings :Rs 937.54 million, Television billings: Rs 72.69 million Senior Executive: V Shantakumar, Managing Director Major Clients: Maruti udyog Ltd(Wagon R/ Automobile); Bharat Petroleum Corporation (Diesel Engine oil/automotive lubricants); HDFC Asset management company(Mutual Fund); Global Tele-system(Information Technology); BPL Ltd (Washing machines, Corporate); VISA (Card, Relationship marketing); Delta Airlines (Airlines); Proctor & Gamble (Old Spice -Mens Grooming); Hyundai Motor India (Hyundai Accent - automobile); Sony Entertainment Television (Sony TV - television channel) 44)SSC & B Lintas Ltd Phoenix Complex, SB Marg, Lower Parel, Mumbai 400 013, India Tel: (0091 22) 493 5377, 495 3679 Fax: (0091 22) 495 0130, 460 2731 Branch telephone numbers: Bangalore: (0091 80) 559 3660 Hyderabad: (0091 40) 332 8894 Delhi:(0091 11) 335 3793/92/91 E-mail: Capitalised billings: Rs 494.00 million, Television billings: Rs 164.00 million Senior Executive: Ajay Chandwani, President Major Clients: Bombay Dyeing (Home Collection, Vivaldi, Princeton); ICICI (ICICI Direct .com/portals); UDV (Gilbey's Green Label, Alchemy, Old gold, Chistian brothers , Alcazar/liquors); Kale Consultants (Software); Indian Oil (servo); Hero Motors(automobiles); Samtel India(Monitors); HLL (Nihar coconut


45)Sasi Advertising Pvt Ltd 1050, Ground Floor, Damodar Centre, Avinashi Rd, Coimbatore 641 018 Tel: (0091 422) 217 558/9, 200227 Fax: (0091 422) 217 487, 212 427 Branch telephone numbers: Chennai: (0091 44) 855 4804/4610 Delhi: (0091 11) 249 4450, 225 9076 Mumbai: (0091 22) 202 2258 Bangalore: (0091 80) 333 8642 Kochi: (00 91 484) 390 629, 391 215 E-mail: URL: Capitalised billings: Rs 270.66 million, Television billings: Rs 37.05 million Senior Executive: R Swaminathan, Managing Director Major Clients: Hatsun Agro Product Ltd (Arun Ice-cream); Maharani Amusement Park (Theme park); LIC (TN & Kerla); Crocodile Products (Mens Wear); Godrej & Boyce (Regional); Mafatlal SA Intex Ltd (Mafatlal - garments); Modi Xerox Ltd (Modi Xerox - Photo copiers); Srinivas Cellcom Ltd (Aircell -Cellular Services, Corporate); The Lakshmi Vilas Bank Ltd (Corporate) 46)Trikaya Grey Advertising (India) Ltd Block 2 - D, 3rd Floor, Phoenix Estate, 462 Tulsi Pipe Road, Lower Parel, Mumbai 400 013 Tel: (0091 22) 493 9336, 497 5401 Fax: (0091 22) 493 9355 Branch telephone numbers: Delhi: (0091 11) 652 2679, 651 5625 Bangalore: (0091 80) 208 8396-8 Calcutta: (0091 33) 474 8518, 475 0869 Ahmedabad: (0091 79) 642 4561, 644 9562 E-mail: Capitalised billings: Rs 2208.00 million, Television billings: Rs 906.00 million

Senior Executive: Nirvik Singh, Chief Executive Officer Major Clients: SmithKline Beecham (Viva, maltova/health drink); Dominos Pizza (Food); Sri Adhikari Brothers (SABe TV); Hughes Software (Software); General Motors (Opel Astra - automobiles); Oracle India Ltd (Oracle - software); United Agencies Ltd (Pernod - liquor); Bhartiya Janata Party (BJP - political); Philips Communications (Savvy - cellular phones); Britannia Industries (Zip-Sip, Tetrapak - health drink); Kinetic Engineering (Luna, V2, Brat - mopeds) 47)Triton Communications Pvt Ltd 43, Prospect Chambers Annexe, Dr D N Rd, Fort, Mumbai 400 001 Tel: (0091 22) 287 2518 Fax: (0091 22) 285 1840 Branch telephone numbers: Delhi: (0091 11) 646 6759/2107, 647 5407, 646 6759 Ahmedabad: (0091 79) 658 6551/52/53 Bangalore: (0091 80) 552 0689 Hyderabad: (0091 40) 330 5937, 331 8341 Pune: (0091 20) 581 8631 E-mail:, Capitalised billings: Rs 1301.90 million,Television billings: Rs 940.10 million Senior Executive: Noshir Desai, Executive Director Major Clients: Set India Ltd(Sony Set Max, Entertainment); Coca-cola India Ltd (Coke promotion/beverages); Tata Finance Ltd (Credit Card); Bajaj Tempo Ltd (automobiles); Balsara Hygiene Products (Odopic Bar scourer); Genco (Jockey innerwear); Whirlpool Apple Consumer Credit (Consumer Finance); American Dry Fruit Ltd (Mother's Recipe - spices, dry fruits); Samsung Ltd (Samsung - mobile); LG (LG garments) 48)TBWA Anthem Pvt Ltd 25-C, Commercial Complex, Paschimi Marg, Vasant Vihar, New Delhi - 110 057 Tel: (0091 11) 614 2292 Fax: (0091 11) 614 5176 Branch telephone numbers: Mumbai: (0091 22) 655 2451, 622 2462, 655 2472

Chennai:(0091 33) 829 1051-54 Pune: (0091 20) 636 444, 632 681 Trivandrum (0091 xx) 313 762, 314 193 E-mail: URL: Capitalised billings: Rs 696.15 million,Television billings: Rs 163.61 million Senior Executive: K George John, Chairman & Managing Director Major Clients: Malayala Manorama Ltd.(Publication); United Television (UTV interactive portal); Samtain Sales Pvt Ltd (Samsonite luggage); Electrolux Voltas Ltd (Allwyn - refrigerator); Tag Heuer Pte Ltd (Tag Heuer - wrist watch) 49)Ushak Kaal Advertising Pvt Ltd B-23, Geetanjali Enclave, New Delhi 110 017 Tel: (0091 11) 696 8113/5, 656 9968 Fax: (0091 11) 696 8114 Branch telephone numbers: Bangalore: (0091 80) 528 8711 Mumbai: (0091 22) 496 3867, 496 3868 Chennai:(0091 33) 490 8725 Hyderabad: (0091 40) 776 0285 E-mail: Capitalised billings: Rs 372.58 million, Television billings: Rs 70.00 million Senior Executive: Raj Hiremath, Managing Director Major Clients: MTNL (Telecom); Summit Infotech Ltd (Software); ONGC(Oil); Wipro Ltd (Software); Adobe Systems (IT); India Trade Promotions (ITPO Government); Wipro Bangalore (Wipro - software division); Fedders Lloyd (Lloyd-Cozy - Consumer Durables); Telecommunications Consultants Ltd (Consultant Services)

50)Urja Communications Pvt Ltd Oberoi Garden Estates, B/3060,Chandivali, Mumbai - 400 072

Tel: (0091 22) 8595730 Fax: (0091 22) 8595740 Branch telephone numbers: Bangalore: (0091 80) 299 0460/61 E-mail:, Capitalised billings: Rs 141.61million, Television billings: N.A. Senior Executive: Prakash Sharma , Director Major Clients: Aptech Ltd(Online,; CRISIL ( research) 51)Lintas India Ltd Express Towers, 15th Floor, Nariman Point, Mumbai - 400 021 Tel: (0091 22) 202 1577, Fax: (0091 22) 202 3135/6 Branch telephone numbers: Delhi: (0091 11) 371 2465/ 2472 Fax: (0091 11) 3712853 Calcutta: (0091 33) 247 7771, 247 5970 Fax: (0091 33) 2403814 Bangalore: (0091 80) 559 2225, 559 6871 Fax (0091 80) 558 6679 Chennai: (0091 44) 852 2115 Fax: (0091 44) 5586697 E-mail: N.A. Capitalised billings: N.A. ,Television billings: Rs 2930.00 million Senior Executive: Prem Mehta, Vice President, Managing Director Major Clients: ITC (Indian Kings cigarettes); Johnson & Johnson (Johnson's Kids soaps); Air France (Airways); BPL (BPL Excell alkaline batteries) Nestle India Ltd (Polo, Bar One - Confectionary); Johnson & Johnson (Lotion, Cream - baby oil); AT&T (Cellular phone); United India Insurance (Insurance), Bajaj Auto Ltd (Bravo, Legend - Scooter); BHEL (Corporate); Elf Gas (Elf - LPG distributor)


All figures in Rs'000s.

Top 10 Agencies (India) 90 1. Hindustan Thompson Associates 2. Lintas: India 3. Mudra Communications 4. Ogilvy & Mather 5. Everest Advertising 6. Ulka Advertising 7. R.K. Suwamy 8. Clarion Advertising 9. Contract Advertising 10. Chaitra Advertising

G I in Rs 490545 391050 251325 204030 177345 161550 122940 119340 104445 97110

Total G I



All figures in Rs'000s.

Top 10 Agencies (India)91 1. Hindustan Thompson Associates 2. Lintas:India 3. Mudra Com. 4. Ogilvy & Mather 5. Ulka Advertising 6. R.K. Swamy/BBDO 7. Everest Advertising 8. Chaitra Advertising

G I in Rs 453060 407700 226440 217260 184320 161820 129960 100845

9. Clarion Advertising 10. Contact Advertising

99810 91890

Total G I


Note:GI: Gross Income


All figures in Rs'000s.

Top 10 Agencies (India)92 1. Lintas:India 2. Hindusia Thompson Associates 3. Mudra Communications 4. Ogilvy & Mather 5. R.K. Swamy/BBDO 6. Ulka Advertising 7. Clarion Advertising Services 8. Trikaya Grey 9. Contract Advertising 10. Everest Advertising

G I in Rs 493290 471375 215010 213345 197775 156060 114480 98505 98370 83295

Total G I


Note:GI: Gross Income


All figures in Rs'000s.

Top 10 Agencies (India)93 1. Hindustan Thompson Associates 2. Lintas India 3. Ogilvy & Mather 4. Ulka Advertising 5. Contract Advertising 6. R.K. Swamy/BBDO 7. Trikaya Grey 8. Rediffusion advertising 9. BSB India 10. Everest Advertising Total G I

G I in Rs 599940 517995 257355 203085 128610 126270 125955 115740 84375 82980 Rs 2242305

Note:GI: Gross Income


All figures in Rs'000s.

Top 10 Agencies (India 94)

G I in Rs

1. Hindustan Thompson Associates, 2. Lintas India 3. Mudra Communications, Ahmedabad 4. Ogilvy & Mather, Mumbai 5. Ulka Advertising (Euro RSCG), 6. Contract Advertising, Mumbai

780795 619650 427005 354600 273195 186660

7. Chiatra Leo Burnett, Mumbai 8. Rediffusion Com., Mumbai 9. Triksya Grey, Mumbai 10. R.K. Swamy/BBDO Adv., Total G I

147510 147195 144045 133020 3213675

Note:GI: Gross Income


All figures in Rs'000s.

Top 10 Agencies (India) 95 1.Hindutan Thompson Associates, 2. Ammirati Puris Lintas, India, 3. Mudra Communications (DDBN), 4. Ogilvy & Mather, Mumbai 5. Ulka Advertising (JWT), Mumbai 6.Contract Advertising, (JWT), 7. Trikaya Grey, Mumbai 8. R.K. Swamy/BBDO Advertising, 9. MAA Group (Bozell), Bangalore 10. Redivvusion-Dentus, Total G I Young & Rebicum

G I in Rs 1118070 740295 570195 501750 378450 308790 275760 264150 231705 207225 4596390

Note:GI: Gross Income




Hindustan Thompson Associates Ogilvy & Mather Ltd FCB-Ulka Advertising Ltd Rediffusion-DY&R McCann-Erickson India Ltd Lintas India Ltd

Capitalised billings: Rs 10,777.05 Capitalised billings: Rs 7425.78 Capitalised billings: Rs 5215 Capitalised billings: Rs 4431.69 Capitalised billings: Rs 3479.53 Capitalised billings: Rs 2930.00 Capitalised billings: Rs 2315.95

RK Swamy/BBDO Advertising Ltd Trikaya Grey Advertising (India) Ltd Chaitra Leo Burnett Pvt Ltd Pressamn Advertising and Marketing Ltd Contract Advertising (India) Ltd MAA Bozell Communications Ltd IB&W Enterprise Nexus Communications Pvt. Ltd Euro RSCG Advertising Pvt Ltd Capitalised billings: Rs 2208.00 Capitalised billings: Rs 1967.21 Capitalised billings: Rs 1872.74 Capitalised billings: Rs 1786.88 Capitalised billings: Rs 1753.80, Capitalised billings: Rs 1657.66 Capitalised billings: Rs 1587.48 Capitalised billings: Rs. 1521.69

Triton Communications Pvt Ltd Percept Advertising Ltd Ambience D'arcy Saatchi & Saatchi Pvt Ltd

Capitalised billings: Rs 1301.90 Capitalised billings: Rs 1098.76 Capitalised billings: Rs 1014.00 Capitalised billings Rs 937.54








Capitalised billings in Million Rs
Hindustan Thompson Associates Ogilvy & Mather Ltd FCB-Ulka Advertising Ltd Rediffusion-DY&R McCann-Erickson India Ltd Lintas India Ltd RK Swamy/BBDO Advertising Ltd Trikaya Grey Advertising (India) Ltd Chaitra Leo Burnett Pvt Ltd Pressamn Advertising and Marketing Ltd


ADVERTISING AN Updates (2002-2003)

1) Leo Burnett plans buyback to hike stake in local arm US-based advertising major Leo Burnett Worldwide is planning to increase its shareholding in its local advertising affiliate, TLG India, through a buyback offer to the existing domestic shareholders. According to sources, post-buyback Leo Burnett's equity in TLG India would go up from 74 per cent to 79.3 per cent. While the financial details of the offer are not yet known, sources say that Black Pencil Mauritius, an OCB will also increase its stake in TLG India, marginally from the existing 20 per cent to 20.7 per cent. The buyback would also lead to an increase in the foreign equity of TLG India, which is within the prescribed limit for foreign direct investment in the advertising sector. The approved foreign equity is 74 per cent amounting to an investment of Rs 74 lakh. The board of TLG India has already cleared the proposal. 2) Publicis gains $50 million Cadbury ad account Cadbury Schweppes, London, has moved its chocolate advertising business, which analysts in the media estimate at $50 million, to Publicis Groupe's Publicis Worldwide, New York and London. The account was technically awarded to D'Arcy Masius Benton & Bowles, the New York shop that will be shuttered by Publicis in the coming months. In India, Cadbury's Dairy Milk account is handled by O&M, a WPP group company. 3) TCNS' 'W' goes to Rediffusion DY&R Clothing company TCNS has ambitious plans for W an apparel brand for the middle-class working woman. In line with its plans, the company recently invited three agencies to pitch for its advertising account. Rediffusion DY&R, Enterprise Nexus and Grey Worldwide were asked to make a credential, creative and strategy presentation. At the end of the process, the estimated Rs 3-crore business, which includes both creative and media duties, was awarded to Rediffusion DY&R. The agency believes once the brand goes national hopefully around August 2003 the ad budget would also go up. 4) Nestle moves creative of infant product range to McCann

In a strategic move, Nestle has moved the creative duties of its infant nutrition product range Cerelac, Lactogen and Nestum to McCann Healthcare, the healthcare advertising division of McCann-Erickson India. The account moves from Mudra Communications, Delhi. The media duties of the Nestle products remain with Universal McCann. The Financial Express, January 8/The Economic Times, January 8/Advertising and Marketing, January 7/The Asian Age, January 5, 2003 4.2

5) ADVERTISERS PUSH AGENCIES TO GET MORE FOR LESS Slim is in. Facing tall orders and short budgets, advertising agencies have learnt to become better rupee-stretchers. And belttightening has taken on a new hue. According to TAM ADEX data, TV commercials have shed weight in 2002. Even the space used by advertisers in the print media has reduced. Belt tightening is something that advertisers have been resorting to for some time as media costs have been spiralling. And they have been pushing all their partner entities in advertising agencies to get more bang for the ad buck. Challenging economic conditions and an aversion to risk have put a serious crimp in advertising budgets. 'With media planners continuing to be under pressure to drive the best bargain, a recent analysis done by TAM ADEX, which examined the duration of TV commercials over the past eight years, has confirmed that TV commercials have slimmed down.' The average TV commercial in 1994 and 1995 had a 25 second duration; since then it has been on a diet. In 2002, the average duration dropped to just above the 20 second mark. The trend is so pronounced that TV commercials below 20 seconds in duration (5 seconders, 10 seconders, 15 seconders and 20 seconders) accounted for about 70 per cent of all commercials aired on television in 2002, the analysis pointed out. It maintained that the growth in the number of TV commercials that are losing weight (below 25 seconds) was also much higher than the increase in fat ads. This phenomenon is not unique to television alone. The TAM ADEX compared TV, newspapers and magazines and noted that magazines have thinned down the maximum. Magazine sizes have eroded by a whopping 30 per cent over the past eight years. For newspapers, the weight loss has been only 21 per cent.

TV commercials have seen a 20 per cent drop in ad durations (from 25.5 seconds in 1994 to 20.3 seconds in 2002). As for this year, with similar pressure on ad size, the average duration of a commercial on television could well shrink below the 20-seconder mark. TAM TV ADEX YEAR 1994 1995 1996 1997 1998 1999 2000 2001 2002 AVERAGE DURATION OF TV SPOTS (seconds) 25.5 24.9 23.8 23.5 22.3 21.7 21.7 20.4 20.3

The Times of India, January 7, 2003 4.3 6) Ogilvy & Mather unseats HTA as 'best' advertising agency Business Standard, 08-02-2002 Ogilvy & Mather (O&M) is the country's 'best' advertising agency, according to AgencyTrack 2001, a syndicated study by ORG-Marg. The study is based on perceptions about agencies among advertisers and agency employees. O&M dislodges Hindustan Thompson Associates (HTA), India's largest ad agency, from the number one position it occupied in the previous study, AgencyTrack 1999. Ranjan Kapur, managing director O&M, India, said, We have showm significant achievements since the last study of 1999. We are steadily rising above our competitors. AgencyTrack 2001 is the fifth of similar studies which were conducted by ORG-MARG in 1990, 1995,1997 and 1999. The study covered two target groups - advertisers and agency personnel Thirty four per cent of the advertisers rated O&M as the best agency compared to 19 per cent, who rates HTA as the best agency and the 9 per cent who voted, for Lowe. Interestingly, 59 per cent of non-O&M clients have expressed a desire to work with the agency, indicating avenues for inorganic growth for the agency. O&M has scored high in terms of employee perceptions as well. Of the 1,51 agency executives interviewed, 76 per cent voted the agency as being 'good to work for'. The study revealed that O&M was relatively weaker among smaller and medium-sized

spenders. Across regions, the agency was weak in the east, which is an HTA bastion. AgencyTrack 2001 covered Delhi, Mumbai, Kolkata, Chennai and Bangalore and conducted 290 structured interviews among advertisers and 151 interviews among agency executives. As far as advertisers are concerned, it covered companies of different sizes, ad spends, product types and management types. Talking about the agency's future plans, Kapur said, We will be more aggressive in terms of acquiring new business.

7) The 36th Abby Awards This year's Abby Awards were spectacular as always. The night belongs to the creative 'creme' of the advertising world and the suits have to be satisfied with applauding in the audience. This years Abbys saw O&M stealing the show once more. Diana Hayden, the hostess for the 36th Abby Awards ceremony, held in Mumbai announced that O&M was the Creative Agency of the Year for 2002. O&M picked up 28 points at the awards, while second-placed McCannErickson India got 7 points, a quarter of O&M's tally. To add to O&M's cup of joy, National Creative Director Prasoon Joshi was named the Copywriter of the Year (though no points accrued to the agency from this). The Art Director of the Year award was not conferred this year. Enterprise Nexus and Mudra Communications shared the third spot with 6 points each, while Leo Burnett India, Publicis Ambience and Quadrant Communications tied for the fourth place with 5 points each. Here's how points are scored. Gold Abbys in the Single Ad and Campaign subsets carried two points, silver Abbys, one. For the Best Continuing Campaign of the Year and the Best Campaign of the Year (Special Abby categories), the gold carried four points, and silver, two. Winning entries in the Unpublished Work category were not awarded points. Among the other awards given away this year were four Distinctive Recognition Awards. This year's recipients were advertising doyen Bobby Sista, media maven Roda Mehta, ad filmmaker-turned-middle-cinema-torchbearer Shyam Benegal and debonair model Kabir Bedi.

One of the highlights of this year's Abby Awards was the constitution of three new awards for the Best Actor, the Best Actress and the Best Director in television commercials. Adjudged by noted feature filmmakers Govind Nihalani, Mahesh Bhatt and Subhash Ghai, this year's awards went to Akhil Mishra (Best Actor, Aaj-Tak), Malaika Shenoy (Best Actress, Toshiba Dramatic Theatre) and Pradeep Sarkar (Best Director, Aaj-Tak). For the record, these three awards did not impact the overall points tally. In what can qualify as one of the most keenly contested awards of the night of the Abbys', three advertisers staked claim to this year's Creative Advertiser of the Year award. Amararaja Batteries (Amaron), Bennett Coleman & Co (The Times of India, The Economic Times and Navbharat Times) and Coca-Cola India (Coke) tied with 6 points each, narrowly edging out Perfetti India (Center Shock) by a one-point margin to share the honours. McCann-Erickson won The Hindu INS Gold Trophy for the Indian Newspaper Society (INS) Thinkprint award.

The prize included an all expense paid trip for two to the Cannes Advertising Festival. SPECIAL SPECIAL ABBY ABBY POINTS GOLD SILVER 0 1 0 0 0 4 0 0 0 0 28 7 6 6 5

AGENCY Ogilvy & Mather India McCannErickson India Enterprise Nexus Mudra Communications Leo Burnett

ABBY ABBY GOLD SILVER 2 1 0 0 0 16 1 6 6 5

India Publicis Ambience Quadrant Communications Virtual Marketing India RediffusionDY&R Contract Advertising Euro RSCG India Saatchi & Saatchi Lemon Alok Nanda & Co Apocalypso Filmworks Channel [V] D'Zine Garage Mediaturf Worldwide TBWA\Anthem 0 0 2 0 1 0 1 0 0 0 0 0 0 0 5 5 0 4 1 3 0 2 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 5 4 4 3 3 2 2 1 1 1 1 1 1

Source:-The Economic Times, March 27/The Financial Express, March 22/Brand Equity, March, 26/The Hindu, March 18/The Hindu Business Line, March 27, 20034.4



Advertising can itself contribute to the betterment of society by uplifting and inspiring people... Governments should not seek to control and dictate policy to the advertising industry any more than to other sectors of the communications media. Archbishop John P Foley, President of the Pontifical Council for Social Communications The WFA World Congress in Geneva, October 1997


7.1 EVOLVING EQUATIONS: ANALYSING THE CLIENT-AGENCYMEDIA OWNER RELATIONSHIP Evolution is an ongoing process, gradual and continuous. Relationships are complex equations, particularly if they involve three parties. But all rules and logic seem to go for a toss when one sees the rapid speed with which the relationships between the client, the advertising agency and the media owners have been evolving over the past two decades. In the days gone by, the client was always king (still is, because it is his money!), usually with strong preferences and views, and the role of the advertising agency was to feed his ego, agree with his views, have long lunches with him and introduce him to the happening models of the day. The media owner was either a supplier or a monopolist, with little or no role to play in actual business. Life was cruising along smoothly for a long time and there was enough scope to continue to mount fat as the economy was in the grip of the protectionist license Raj. This arrangement suited everyone and therefore continued for decades, perhaps until the early eighties.

And then two changes took place that turbo-charged this Darwinian process and rapidly changed the face of the advertising industry.

Some agencies like Lintas, HTA etc. the initiator and leader of this process in India, actually started hiring professional managers, particularly MBAs from premier business schools. This single step completely transformed the entire industry as the client and the agency personnel were from the same institutes, and any one of them could have been on either side of the table. This brought with it professional management, did away with a lot of fat in the system and made the client-agency relationship that of a business and its consultant. No longer was the agencys performance judged by its fancy lunches or its power to generate Filmfare award nite passes. Professional relationships, based on mutual respect, started forming and the agencies truly moved towards being equal partners. At least some of the leading professional ones did, and the others aspired to do so. Suddenly the focus started shifting from whether the client liked the agencys face or not to whether what the agency recommended was in the best interest of the brand or not. Rightly, this was an era where the brand started to come into focus. The agency was expected to understand more than just the communication. It had to become the consumers voice in the brand management team. With liberalisation of the economy and with the first wave of competition, the industry quickly realised that there would no longer be scope for the fat and hence started becoming more and more demanding of the agencies. This in itself forced the advertising industry to professionalise itself, and influenced relationships. Meanwhile, most media owners continued to fit into either the supplier or the monopolist mode. However, once you initiate change, it is like

fission. It goes out of control after critical mass is achieved. This stage was reached in the mid-nineties. The client started questioning his consultant, the agency. The unquestioned trust evaporated quickly, and agency-shopping became the norm. The competitive pressures forced the client to look for every extra rupee saving. And why not? The environment got even murkier as some unprofessional agencies refused to move towards transparency in relationship. The client always had the nagging feeling that his consultant, the agency, could be coloured by the ulterior motive of maximising its 15 per cent commission and might be making the client spend money indiscreetly. There was enough happening in the industry by some unscrupulous players to even justify this feeling. Clients were literally driven to bankruptcy by ill-advised advertising spending. The famous fire extinguisher client spent crores on launching some air-tight containers, but was unable to contain his financial losses. The agency laughed all the way to the bank, the client went broke! A leading agency made a small South-based airline spend more money on advertising than on its airplanes. Naturally incidents like these eroded client confidence and a few black sheep put pressure on the entire clientagency relationship. Once again the advertising industry, in a different manner, became less professional. And this time there was no wave of MBAs to save it, as by this time the quality of talent in advertising started deteriorating. The fancy MBAs joined finance companies, consultancies, technology companies everywhere but advertising.

The dawn of the millennium has ushered in yet another era. Like in all industries, advertising was forced to cut flab. Right sizing happened and clients started realising the differences between the real players and the me-toos. Globalisation brought in an era of mergers and acquisitions. This brought with it the respect the agency deserved and once again put the onus of delivery on the agency. The agencies have started to once again realize that it is not the client who pays the bill but the brand. There would be no client without the brand. And once more the focus has shifted to building brands, which some agencies had continued mastering over the years. The relationship between the client and the agency has once again become much healthier and more equal because both are now working towards a common goal the brand. There still are agencies that operate in the Gray areas, and some who drove clients bankrupt are still in business. But the scenario is changing. By and large there is much more honesty, trust and accountability between the client and the agency today than there ever was. Some of the media owners have also changed. The days of doling out ad space are over in the electronic media, and only a few vestiges are left in the print media. Some of the largest publications have become so much more accountable and responsive. The advent of media specialists has aided this process, though here again there are some independents still around, unattached to any advertising agency, those who dont understand advertising but treat media as a commodity. And surprisingly they were initially able to get some clients to use their services though now wiser counsel seems to have prevailed and their days

seem numbered. This breed also includes some creative agencies that have virtually lost all their creative business and are hence functioning a bit like independents, though not out of choice. Against the backdrop of all these developments, media owners are also realising that there is a need for accountability. As they professionalise themselves and become more responsive, the agency-media owner relationship will also shift focus to adding value to the brand rather than squeezing out one rupee more on the rate.2..1


Growing interests have been developed in a new marketing concept, relationship marketing, among both academic and practitioners in recent years. Relationship Marketing aims to win existing customers continuing patronage and loyalty. The phrase relationship marketing appeared for the first time in literature of services marketing in 1983. 1.4 In fact, the idea of Relationship has long been adopted in many oriental societies in the process of business transactions as a means to achieve business objectives. In the western world, the concept is furthered elaborated, especially in the service industry. Until now, most of the literature in RM is focusing on the theory and conceptual basis, not many literature have been done on the

operational and practical context. When put into practice, perceptions and the implementation style of RM affect the effectiveness of the RM. The purpose of this study is to investigate the perceived importance of some relationship attributes among RM receivers in a service industry Advertising. In the meantime, factors that influence advertisers perceptions toward these attributes are examined, such as the time period of association, the type of industry and the level of budget. In the 1990s, advertising agencies are facing the problem of maintaining large global clients as the number of agencies has been reduced through mergers and acquisitions. Relationship is one of the effective means to keep clients loyal to the agency.

7.3 THE INTRODUCTION OF RELATIONSHIP MARKETING Relationship marketing in service organizations is not an entirely new concept. For example, Berry (1983) defined relationship marketing as attracting, maintaining, and, in multi-service organizations, enhancing customer

relationships. But recognition of the importance of relationship marketing in service organizations has grown in recent years. This concept also has attracted many research studies on its definition and the changes in the marketing concepts and phenomena. The most innovative and theoretically developed contributions to Relationship Marketing theory come from various disciplines, such as service marketing, industrial marketing, quality management and indirectly from organization theory.

The early literature in RM focused on the definitions and conceptual frameworks. After Berrys (1983) initial work, Christopher, et al. (1991) stated that Relationship Marketing has its concern the dual focus of getting and keeping customers. Gummesson (1994) has commented that the perception of RM varies between authors and RM is a function of relationships, networks and interaction. These initial efforts in defining the term relationship marketing enabled the further development of relationship marketing in the later years. Over the past twenty years, a new approach to marketing management, based on relationship and network is gaining ground .1.4 Marketing is changing its focus from the marketing mix to relationships, networks and interaction .2.2 The traditional marketing mix theory has been criticized for being incomplete and manipulative that Kotler (1986) has added two general Ps: political power and public opinion formation, into the 4Ps. Many other researchers considered that people is an

important element in marketing management

. In the mid-1990s, service

industry competition has never been fiercer in supermarkets, banking services and airlines. Since customers are facing the uncertainty of intangible products, repeated contacts between customers and service providers facilitate relationships and finally confidence and loyalty in the service. Customer satisfactions had gained increased attentions in service marketing. According to Reichheld and Sassers research (1990), profits climb steeply when a company successfully lowers its customer defection rate. Not only do loyal customers generate more revenue for more years, the cost to maintain existing

customers are lower than the costs to acquire new customers. Companies that focus on customer satisfaction will enhance the loyalty of the customers for a long period of time. On the other hand, relationship marketing taps into a highly influential psychological component. Bonding and empathy are important elements in maintaining long-term relationship with clients. It is a basic fact that people do business with people they know, like and trust and are inclined to stay with them.4.5 Morgan and Hunt (1994) defined relationship marketing as marketing activities directed to establishing, developing, and maintaining successful relational exchange. Trust and commitment are the essence of relationship marketing. For a strong relationship to exist, it must be mutually beneficial.

Communications must be open, honest, and frequent. Similar values must prevail among partners. 7.4 RELATIONSHIP BETWEEN ADVERTISERS AND AGENCY As the advertising industry in Asia strives to come to terms with the new economic reality and with the clients demands for better and more costefficient solutions to their marketing and promotion problems, an industry poll has discovered that the agency-client relationship is stronger than ever.2.5 Most of the advertisers said they are relying on agencies for strategic guidance and advice. As far as the advertising agencies are concerned, to develop a strong and long term relationship with their clients is considered to be important in retaining clients in recent years.

The recent worldwide down turn in economic conditions has motivated many organizations to re-evaluate their advertising. Many advertisers have cut their advertising spending, and others have changed agencies in the hope of achieving a better return on their advertising expenditure. Cathay Pacific ended its 10-year relationship with Leo Burnette due to the dissatisfaction of the agencys service. Therefore, agencies have to restructure themselves to meet the requirement of their clients in order to maintain the clients. Among advertising agencies there is always a keen interest as to why companies change their agency. There are a number of academic research studies on this area to investigate the wide range of factors, which affect advertising agency-client relationship.2.6 The most prevalent theme of this research is to isolate the reasons why agency-client relationships fail. On average, Indian advertisers change advertising agencies once every four and half year (Michell 1983; 1990). Verbeke (1989) pointed out in his research findings that half of the firms switch advertising agencies within less than four years. Interpersonal factors and structure of agencies were regarded as determinants for the success of relationship. Harper (1971) pointed out that agency would need to restructure itself into individual specialized functional units demanded by clients to maintain better working relationship. In the study of Mitchell and Sanders in 1995, compatible interpersonal characteristics are considered to be one of the determinants that appeared to influence the likelihood of the agency-client relationship remaining loyal. It is apparent that advertisers engaged in long-term relationships

treat agencies as equal business partners. Apart from the economic problem, today, advertising agencies are also facing with rapid changes and new development in the industry, which create profound effects on the global advertising industry. Dramatic increases in international advertising spending are leading major U.S. agencies to reorganize for better management, more services and better profits from their overseas operations. Due to the recent trend of mergers and acquisitions of agencies, there are smaller numbers of larger agencies that are facing with clients of diverse background. To maintain these global large clients for longer term is their objective. Global advertising agencies which are serving the global clients need to have detailed understanding of a local market and its relevant social issues in order to offer individual attention to individual market.



In general, heavy advertising is evidence of fierce competition, and this usually arises when a few efficient companies are battling for supremacy. The result of such competition is, inevitably, that the nondescript products fall out of favour and disappear. In due course there remain a small number of heavily advertised products competing one with another, each perhaps with a marginal appeal to a particular segment of the population, but none with a clear advantage. Advertising oils the wheels of commerce and is the dynamo of competition. Henry Lazell of the Beecham Group


This chapter deals with the findings, conclusions and recommendations of the study. After analysis of the views, recommendations and suggestions given by the respondents, various strategies for advertising agencies have been formulated. These interactions are covered under various heads viz: -







I) STRATEGIC CHOICES OF AN ADVERTISING AGENCY This is the best of times and worst of times for Indian advertising agencies. On the one hand, there are ample opportunities for growth not only in existing areas of activity, but also in new fields that are opening up, thanks to liberalization and globalisation, technological progresses and changing lifestyles. At the other end of the spectrum, risks are looming large on the horizon of agencies that are not

able to identify the critical competencies they need to stay on course and decide how they should build and deploy these competencies, given their current scope and resources. The risk of getting stuck in the middle is now very real for many agencies, and the time has come for such agencies as well as others operating at the top and bottom rung to revisit their strategies including scope, scale and competitive advantages.

i) Changing Environment of the Advertising World The performance of the Indian advertising industry since the middle of the nineties can be termed as healthy. The current growth rate of 18-20 per cent, though below the 49.5 per cent achieved during 1995, is still above many industries in India. The Rs 10000-crore industry is becoming globally competitive and presently accounts for 33 per cent of total industry profit in the Asia-Pacific region and ranks seventh highest in terms of contribution to global profit. Global agencies are increasingly getting attracted to the Indian market and now have a share of about 47 per cent of total Indian advertising. In spite of this healthy state of the industry during the mid and late 1990s, the uncertainty of the future remains a cause of concern for all agencies, big, medium or small. Developments in the last 5 to 10 years have changed (or are changing) the rules of the industry dramatically. Lets take a look at some of these developments to identify the opportunities and vulnerabilities of Indian advertising agencies:

Clients are increasingly looking for a one-stop communication solution, including direct marketing, event management and public relations. *Emergence of Internet and other new media such as ATM, WAP devices and interactive TV are exciting and threatening exciting for fast and first movers in building capabilities and early advantages and threatening for laggards and those basking in past glory. *Interactive divisions of many agencies are now offering online consulting, web branding, web designing and offline advertising strategies. * Concentration in the industry is clearly visible, with the top 15 agencies accounting for 80 per cent of the billing and the balance 20 per cent being shared by a 100-odd agencies. * Opportunities for growth appear substantial total billing is expected to grow to Rs. 20,000 crore by 2005 with two to three agencies billing more than Rs 3000 crore. Some of the opportunity areas will be healthcare, insurance, financial services,, Internet and special communications. * Online advertising will be on the rise and will reach Rs. 300 crore by 2005. However, it will change the rules of advertising and will help advertisers to shift focus from broadcasting to narrow casting. * With media planning and media buying becoming highly specialized, thanks to the emergence of new media and need for better relating media characteristics with brand and consumer profile, there is a possibility that these two activities will move out of the range of services provided by a traditional advertising agency, implying splitting of the commission presently being earned. It is bad

news for full service agencies who will have to establish how they can add value in such areas as speed, coordination and optimum media plans. * Clients will be looking for more comprehensive and also better services with greater speed in delivery and applications across geographically dispersed markets. They will also be increasingly demanding a different remuneration structure (either fixed fee-based or performance-linked) to ensure accountability. * Media planning has become far more complex than before there are a 100odd channels, 400 publications and a plethora of new media that keep popping up every other day. With the rising cost of media and its ever-growing fragmentation, the efficiency and effectiveness of ad spend are now being examined critically more than ever before. * Online and offline media-buying companies will be fully integrated and automated. In general, technology will drive initiatives in devising better ways to reach consumers. * Faced with increasing media cost and intense competition, many agencies are now trying to scale up quickly to become one-stop solution providers and reduce cost. In fact, the industry has already started witnessing a number of M&As and strategic alliances ii) Areas of Repositioning Given the changes mentioned above, the strategies that worked in the past will need to be revisited to check their relevance in the new environment. Some of the areas where fresh views are needed are:

Segmentation The choice of segments to be served in the emerging future is the first aspect to be revisited in order to reposition an advertising agency in the new competitive environment. It is now clear that no organization can be all things to all people. The need to divide existing and prospective clients into a number of homogeneous segments and then select the few where the agency wishes to focus in the coming years will be a key task since it will help the agency to have clarity, consistency and commitment in development of strategy, allocation of resources and identification of critical skills. The choice of segments to be targeted must take into account such aspects as scale of future operations, new opportunity areas (e.g. relative emphasis on non-traditional media and choice of segments such as retailing,, health care, insurance etc.) and underlying capabilities to serve such areas, competitors existing and future offerings, agencys present strengths and vulnerabilities and its agenda for building specific capabilities in the future. Scope An agency should examine if it should become a full service agency or focus on one or two specialized areas. There will increasingly be a sharp distinction between pure players in select areas and full-fledged communication practitioners. Scale A critical issue to be addressed is how big the size of an agency should be. Size

will undoubtedly matter if new capabilities are to be built, more value-added services are to be provided and cost to the client is to be reduced. It is also a fact that the industry is getting concentrated, and unless an agency figures in the top ten, it is unlikely to make reasonable money. Capability Building One key issue that needs to be revisited is what kind of future capabilities an agency should build so that it can have competitive advantages to offer value that is better than its other direct competitors as well as niche players. The list of capabilities has to be developed keeping in view the need for microsegmentation, requirement of faster delivery, emergence of e-business, new technological possibilities in IT and telecom, and development of non-traditional media such as Internet, ATM, WAP devices, interactive TV etc. Care must be taken not to build capabilities in all possible areas (for example, the agency need not build capabilities in software required to support its online initiatives). Needless to say, the more the number of areas where capabilities need to be built, the more will be the investment that will be required in technology, creative people and associated training and development. Two additional considerations, while deciding on future capabilities, will be: * Applicability of newly developed capabilities across different geographical markets around the world * Breadths of sectors to be covered (e.g. retailing, distribution, promotions, merchandising, sampling etc.)

Value proposition The decisions taken to reposition the agency in four specific areas of segmentation, scope, scale and capabilities will determine the value proposition that the agency intends to offer to its clients. The uniqueness and sustainability of such value proposition and the ability to deliver such values at a competitive cost will be a critical aspect of an agencys plan to reposition itself. The key thing to figure out will be what specific values clients in each segment targeted will be looking for (which may not always be articulated by the clients). While value expectations will differ from one segment to another, some common aspects are clear: * Providing research and intellectual inputs to clients in three key areas, viz understanding changes in consumer behaviour, developing business insights (including making available frameworks for formulating strategic options) and crystallizing the brand vision. Agencies have not paid sufficient attention to supporting clients in the last mentioned two areas, namely business insights and brand vision. They will need to involve themselves in these upstream areas to not only assist the clients in their strategic brand management function but also to ensure excellence in downstream activities. Interestingly, an agency need not build all the capabilities needed to excel in these areas. Strategic alliances and networking with individuals and specialist organizations (such as industry experts, strategy consultants, research companies etc.) can provide the required concepts and best practices.

* Development of a range of options, so far as choice of media both online and offline is concerned, given the content of the message and the profile of target consumer or customer group. Providing value cost leveraging of each of these options and ranking them on a neutral basis through relating each option to the specific context such as business strategy being adopted, short- and long-term goals and brand vision of the client will be a critical component of the value proposed to be created. Specifically, clients will like to know how effective various traditional and new media options (remember 80 per cent of the cost of a campaign is the media-related cost) for a particular product or service will be, given the overall business and brand strategy and short- and medium-term marketing objectives. * Speed in delivering error-free, quality output and responsiveness as well as the flexibility to change the package of offering at short notice will help agencies reduce customers anxieties to get an advantage over competition. *Subjecting the agencys remuneration structure, on a proactive basis, to certain accountability format. This will communicate seriousness,

professionalism and sensitivity to a clients needs and help greatly in building a strong goodwill in favour of the agency. *Building a track record of measurable success in all aspects of the agencys operation and services creative, media planning, media buying, production and account servicing. A track record of superior performance builds reputation and equity in the minds of the client.

* Expertise and professionalism of the agencys staff, at both the front and back office, reduce customers anxieties to a great extent and are thus sources of value. * A well-developed, well-communicated, and well-delivered value proposition that is meaningful and relevant to the target client groups will help the agency position itself clearly and uniquely in the minds of the clients vis--vis competition. iii)Performance Criteria As with any other organization, an agency will need to define a few critical parameters against which it will measure its short- and long-term performance, given the industrys standards and clients expectations. Such parameters should be chosen to reflect the importance of both client satisfaction and internal efficiency. Against the backdrop of the increasing propensity of clients to shift from a commission or fee-based remuneration structure to a system based on payment by result, it is obvious that an agency will need to incorporate in its list of key success factors such parameters as the advertisers business performance (e.g. sales, volume etc.), the performance of advertising (e.g. level of awareness created, enhancement of brand image etc.) and performance of the agency vis-a-vis clients expectations and service standards set in delivering the service (e.g. task competencies, service deliveryquality, timeliness and professionalism). These three areas, in addition to other items that measure internal efficiency, must be fine-tuned, quantified and benchmarked to make sure that both clients and employees of the agency

understand and evaluate the kind of value the agency proposes to deliver and how the agency ensures high-quality execution of the same.

iv) Organising for the future Against the background of changing environment and the repositioning required to deliver the new value proposition discussed above, a key issue the agencies will face is how to organize their activities in future to implement the new direction. While traditional thinking will probably indicate the need to possess all required capabilities and infrastructure in-house, the guiding principle should be to include only those few core activities where the agency has established capabilities (or has plans to develop such capabilities); any other activity, however unconventional it may sound, must be subjected to critical scrutiny and be considered for outsourcing (without, however, losing control over the same). In the 21st century, the resources that will be critical for ensuring the success of any organization are essentially creative people, ideas, information and network; there will be less and less emphasis on physical infrastructure and layers of bureaucracy to deliver the value desired by customers and advertising agencies will not be any exception. The real challenge for agencies will be how to keep the core activities to the minimum and how to establish a collaborative relationship with a large number of individuals and organizations who will provide specialized and standard services, depending on each individuals and organizations intrinsic strengths, in a seamless manner. Such individuals and organizations will be legally separate but must

work along with the agency in an operationally synchronized manner. Advancement of information and communication technology can help an agency to have control over activities of such satellite units by establishing contractual control on digital information.

The need of the agencies of tomorrow to reposition themselves in the fastchanging business and advertising world cannot be overemphasized. The areas that should be revisited by the agencies have been identified in this research and these require urgent review. A fresh prospective is necessary in each of these areas to reposition the agency in the new scenario. Obviously there will be a number of alternatives under each of these areas, and the final choice will essentially depend on how the managers of each concerned agency perceive the dynamics of the new environment, including the opportunities that are opening up and the competencies they need to develop. Also important will be the aspirations these managers have to dominate the nature and pace of the future evolution of the advertising industry.

II) EMPLOYER-EMPLOYEES RELATIONSHIP IN ADVERTISING AGENCIES The 15 per cent commission system is a reward system that is based on the quantity of the work done and not the quality. In this system, there is no incentive to produce superlative creative that works and needs lesser media exposure and thus no incentive for the agencies to employ superlative employees

who will produce superlative work. No advertising agency with the right business sense would consistently produce commercials like the 1984 commercial of Apple computers, which needed to aired only once. So going by business sense alone, it is advantageous for the advertising agency to employ talent that is just good enough to produce acceptable levels of output. Little wonder, therefore, that there is no incentive for advertising agencies to enter the salary race in the job market to attract good talent. In certain developing countries like the US, a trend is already in place where the 15 per cent commission is giving way to other reward systems, reward systems that take into consideration the quality of the work done by the advertising agency. With these new systems gaining more prevalence, it will become mandatory for advertising agencies to attract very good talent even at a high cost. i) Build knowledge laboratories In the past, one could walk into an advertising agency to become an expert in communication. But today advertising agencies are no more universities to learn the latest developments in the field of communication. The stagnating knowledge base of the industry is responsible for this situation. There have been very few paradigm shifts in the knowledge base of the advertising industry. The last big paradigm shift in advertising happened in the 70s with the introduction of psychographics and before that the concept of USP in the 50s. The advertising industry is probably one of the very few industries where, with a 30-year-old knowledge base, you can still be considered an expert.

(Contrast this with an industry like software, where even a two-year-old knowledge base is considered outdated.) Due to this static nature of the knowledge base, the advertising industry has lost its importance to more specialist services like management consultancies, design houses or media outfits. This, in turn, has led to good talent going in search of these specialist outfits where the excitement of learning new things and making innovative contributions to the clients business is very high. If advertising agencies have to establish themselves as universities of learning on communication, they should develop knowledge laboratories, the equivalent of an R&D department, where research and discussion on, and practice of, all aspects of communication take place. The knowledge laboratories could focus, for instance, on how blind persons interpret the audio stimulus, so as to create better radio commercials, or on the communication strategy of traditional Indian art forms and their impact on commercial communication. There have been tremendous developments in the field of neurology, more so in the field of neuro-linguistic programming, which has a lot of implications on developing better advertisements. This constant infusion of new knowledge will help advertising professionals to create an inequality of knowledge between them and the other professionals around them. This knowledge inequality will help to change the existing attitude that advertising is a job that anybody and everybody can do and one that doesnt need much expertise. Advertising will be seen as a specialist science. This, in

turn, will dramatically improve the status of an advertising career in the job market. ii) Let fresh talent bloom One of the biggest complaints that fresh talents have about the advertising industry is the job content at the entry level. Today, the job profile of a newcomer for the first two to three years of his job is to take care of the operations of the brand. While it is extremely important to give training to all trainees on the operational aspects of creating an advertisement, to make the trainee do this job for another two to three years is a huge waste of her talents. More so when her batch mates at the institute are doing far more meaty jobs like leading a sales team or being part even if it is junior of a team working on the merger plans of a big corporation. There is a need to create a new layer consisting of employees with lesser educational qualifications to take care of only the operations of the brand so that the more qualified new recruits learn the operations during their training period, and after the training period supervise these operations along with being involved in brand management jobs. This system will alleviate the problems of the existing system where young, intelligent kids from good management institutes have to act as glorified courier boys, and never get to use their brainpower until they reach the middle management of an agency. iii)Give more teeth to seniors The middle management team too has its problems. Today, the job profile of a middle management person does not change until he becomes really senior

enough to look after a branch office. So, while job designation changes and one moves from middle to senior management, the job content remains the same. This is not a healthy trend at all. One way to improve the job content of the senior level is to make each of the brands seniors handle an independent profit center. So if the advertising budget of a brand is Rs. 2 crore, the account director on the brand assumes the responsibility of the CEO of a company with sales of Rs. 2 crore. He is given the responsibility to manage the expenses, collections and cash flow and is ultimately held responsible for the profits on the account. iv) Treat employees with care The advertising industry, with its long working hours, numerous teams, processes and tight deadlines, has undoubtedly one of the most stressful atmospheres among all industries. There is no doubt that these high levels of stress can adversely affect any employee, more so his personal life. Due to either, the employees will leave this stress- filled atmosphere after a few years for better pastures or those staying back will be so drained that their productivity will decline at an alarming rate. So it is imperative that the advertising industry develops good enough HRD policies to make the life of the employee more comfortable not only in the office but also at home. But sadly, the HRD practices in most advertising agencies are primitive in comparison to HRD practices in other service industries like software and financial services. All the leading advertising agencies are part of a global network. This global network can be used effectively to attract and retain good talent. It will be a big

incentive for any employee if he gets opportunities to work on foreign assignments. However, today foreign assignments in the advertising industry, unlike its counterparts in the financial services or software industries, are the exception rather than the rule. Even the exceptions happen only at the senior levels. The advertising industry has been slowly but steadily losing good talent. Adding to the problem is the fact that the industry has not been able to replace the good talent with equally good talent. The time has come for the advertising industry to realise that it has no alternative but to take immediate steps to make the industry attractive to good talent. Else, there will be notices outside advertising agencies proclaiming Trespassers will be hired. .

III) NEED FOR A ONE-STOP MEDIA SHOP FOR MEETING CLIENTS' COMMUNICATION NEEDS Unlike a lot of other services whether in advertising or in any other field, where the benefits are tangible and visible media planning offered a whole host of benefits in terms of scientifically planned media usage, innovative ideas, implementation, monitoring et al. However, more often than not, these benefits were intangible and hence, people found it difficult to accept and appreciate them. Besides, the media scenario in India was very static, with very few real options to choose from. Clients, too, did not demand the same level of involvement from media planning as they did from creative, and maybe, to a

much lesser extent, from media buying. Advertising agencies one-stop shops for all communication needs did not want to give up control over media as: * The same work could be done even without the support of real specialists *Without investing much in databases, software, hardware, people and other infrastructure * Account servicing people could act as the face of the agency even for media issues.

Current Scenario Media Explosion and Shake-outs: With the advent of satellite TV and the corresponding media explosion, the media market became extremely vibrant, complicated and unwieldy. The static environment gave way to a very dynamic environment, not only in the field of TV but had its impact on other media as well, be it print, outdoors, cinema, radio, Internet et al. Leaders of the day lost out to the more innovative and aggressive players: in the field of television, it was DD v/s Zee earlier and Zee v/s Star now; the print revolution that was the forte of leading English and a few regional publications has now shifted to the likes of Dainik Bhaskar and Dainik Jagran; the outdoor market is inundated with technological breakthroughs as well as innovative options by the dozen; and radio is abuzz with FM channels about to be launched by the score. Internet is creating a tehelka and is likely to emerge as a strong candidate in the future.

i) Customers to Consumers: The customers of yesterday have truly become the consumers of today. Far from being happy with what is available, they have fastforwarded to being very demanding. They have the best of both worlds, access to everything without having to pay a substantial amount to receive the same. ii) The Economy: With the opening up of the economy, advertising in the Indian market has undergone a dramatic change from being one of the less important marketing inputs, today it has transformed into a key ingredient for brand success. A lot more money is being spent on advertising than ever before for reasons that are varied but real. iii) Competition: Competition is at its peak, as never witnessed before. No single brand, however well placed, can take its place for granted and may lose its position overnight if caught unawares, e.g. Zee TV to Star Plus. Therefore, clients have to focus on immediate as well as long-term means of communication more advertising being one of the means. iv)Fragmentation: Increase in media options is giving rise to fragmented media usage, leading to less time spent per medium or vehicle. In other words, lower TRPs (Television rating points) per programme on television and lesser time per vehicle on press. This means the cost of reaching the prospective customer is increasing by the day. Advertising Needs: Brand advertising for long-term results and tactical campaigns for short-term rewards are both becoming imperative to outlast competition. With increasing competition, the need to advertise is increasingly

higher. The need to advertise at optimum level of spends (at requisite Share of Voice) is becoming critical. This required optimum level is on the increase year after year. Overcoming clutter (through preferred positions and higher frequencies), ensuring roadblocks (by being present simultaneously across many channels) and investing in building media properties (that lead to word-of-mouth publicity or long-term cost efficiency) are all pointing towards an increase in cost. Advertisers are, therefore, forced to commit a much higher ad spend than they can actually afford. This is because the media inflation index is way above the consumer price index and this increase cannot be passed on to the consumer, thus affecting their bottom line adversely. Understanding the intricate science of determining the level of media presence required against a sales or market share objective is becoming an art. In this scenario, clients are now looking for specialists who can help them plan their media spends in the most optimum way as well as buy at the best possible rates for them without compromising in any way. They are looking upon a media agency as a partner that will respond to their marketing objectives with accountability and an agency that has a handpicked staff of top professionals so that clients get what they need on time at the best value for them. To quote from the Glaxo Wellcome (from the Net) on what it looks for in a media planning and buying agency to consolidate its Direct-to-Consumer advertising, media buying and planning, including Internet buys, with one agency to improve efficiency, effectiveness and return from its advertising. 1. Experience as a media planning

2. Experience in buying major media categories 3. Applied integration of media and targeting tools 4. Staffing plans for the account 5. General philosophies and approaches to the media marketplace.

The need, therefore, is to save the advertisers money to the maximum without diluting the advertising efforts needed for the brand. This is where the specialised skills come in. Save Maximum Advertising Money but without Diluting Required Effort i.e. Minimum Risk. The Way Forward The need of the hour is a team under one roof that: 1. Is skilled enough to advise on the optimum spend levels 2. Can do hard negotiation without compromising on the best values 3. Has the right contacts across media that matter 4. Is armed with all relevant tools and technologies, data bases, systems and global learning 5. Is accountable, trustworthy, unbiased and ensures complete transparency 6. Has complete service orientation The media professional needs to undergo a complete change in mindset from being a Media Professional to being a Business Manager and a Service Provider.

Requirements: Obviously, it calls for a huge investment in people, in tools and technology, in databases, in systems and in training. Often, this amounts to a

three- or four-fold increase in investment than that incurred in a traditional media department. To make this investment worthwhile, these one-stop media shops become independent units to vie for a larger business base that makes them financially viable. It is also worthwhile noting that all major media independents in India are part of a worldwide media independent network, having access to the networks learnings as well as the latest tools and technology available. This, in turn, makes each a better professional through varied exposure and helps in providing better service to clients.

Let us take an example from Zenith Media in India as a case to illustrate the above points better how a one-stop media shop provides tangible savings without diluting effort, yet reaches out to the consumer through media in a holistic manner, and assumes accountability for its recommendations and their results, keeping the clients needs and requirements uppermost. The case study is about a food product used by the entire family, the purchase decision of which is mainly the homemakers. The product was being distributed in one state of South India in a very competitive environment, and the objective that the company had was to double the sales of the brand in one year. Using various databases for media monitoring, the Zenith team first identified the links between. * Market Share and Share of Voice, as well as *Market Share and Effective Reach (above a certain level of OTS) Thereby, it established clear required targets to double the sales.

Using proprietary global models, the Zenith team, along with the brand









Cues were obtained from global learnings (using another proprietary global method) and insights through local research to identify the body clock of a typical housewife, her points of contact with media (not only the organised media but with anything that contacts her) and the extent of her involvement with the same. This helped in the initial screening of media to come up with: 1. The most appropriate time slots/sections in TV and print media respectively when she was most receptive. 2.Places/locations for placements of out-of-home sites 3. Additional media to be used for reaching out to her at the kitchen or at leisure. Using the proprietary optimisation model, the required SOV, Reach and Frequency was achievable at 35 per cent less, as it threw out all wasteful spots/insertions. Then the buying tools and the Zenith Buying contacts were used to buy at the best prices possible. Through this, a further savings of 25 per cent was achieved. Total savings of 60 per cent. To bring further excitement to the brand, innovative ideas were sourced from the worldwide offices of Zenith Media through their global site that contains all innovations from across the world, in addition to creating innovations tailor-made for the brand and the market.

Finally, the system matched the sales targets and achievements to the savings and delivery targets.

We believe that one-stop media shops cannot act only as suppliers but as business associates who are accountable and are willing to stick their neck out for performance.


The slowdown and the events of 9/11 have taken the wind out of the sails of most companies and IT firms have been no exception. With profit margins thinning and most companies struggling to stay afloat, cost cutting has become the mantra for survival. And as always, one of the first industries to be affected by this trend is advertising. The announcement last week by the fifth largest advertising firm in the world that it would be axing employees in the light of a slump in business laid bare the fact that the industry is facing one of its toughest battles yet. Closer home, the situation has been no different. The advertising industry concurs. Rama Paul, assistant media controller at Mudra, which handles the HP and Samsung accounts, points out that while the declining trend had been there for about a year, it gained momentum in the last six months. Using HP as an example he says that while the company used to earlier spend Rs 1-2 crore on advertising, it has now fallen to Rs 60 lakh to Rs 1 crore. The story is much the same for Oracle. The company is currently in the process of re-positioning itself as an e-business company, which generally calls

for a massive and extensive advertising campaign. Despite this, the companys advertising budget has remained almost stagnant for the last one to two years. According to Ravi Negi, media manager, Grey Worldwide, Oracles advertising agency, the company has been spending close to Rs 2.5-3 crore on advertising during the last two years and its budget for the last year has been more or less constant. Advertising spend in terms of LGs IT product range also points towards a similar trend. The companys advertising budget has fallen from Rs 7 crore during the year 2000 to Rs 4 crore in 2001. In fact, the company now spends a frugal 1.5 percent of its total revenues on advertising, as compared to the 3.5 percent it used to spend earlier. The same is the case with companies such as Acer, HCL Infinet and banking and financial software major i-flex solutions, whose ad budgets all tell a similar story. According to S Rajendran, general manager-marketing, Acer India, even though the industry as a whole has shrunk its advertising rates by about 50-60 percent, the company has dropped its ad spends by only 20 percent. HCL Infinet has cut its ad budget by about 60 percent, and i-flex now spends just 30 percent of its overall marketing budget on advertising as compared to the 50 percent it used to previously.

BLAME THE DOT-COMS One of the biggest factors leading to shrinking of the advertising pie in the IT industry has been the dot-coms going bust. Commenting on the impact this development had on the ad spend of the industry, an internal source from Euro

RSCG (the advertising agency for Microsoft and Intel) points out that with many dot-coms shutting shop, the ad agency lost a significant amount of its business as the former contributed Rs 5-10 crore per annum to the agency during previous years. Rajendran concurs, Though dot coms boosted ad revenues, they were unsustainable and unrealistic in the long run and with their fall, a major source of revenue for the industry disappeared. Another factor contributing to a slump in advertising revenues has been the decrease in IT training related ads, which according to Skoch Consultancy Services, experienced a downturn of 50-60 percent over the last one year with the increasing disillusionment of students and lack of job opportunities. Further, according to Anurag Batra, managing director and co-founder, exchange4media, a provider of software solutions and consultancy services to the media and advertising industry, the decrease in recruitment by IT companies has resulted in IT appointment advertisements decreasing across publications and media. The downturn in the economy has taken the sheen out of advertising, especially for IT companies. The recession has reversed the demand-supply equation and hence, advertising spends, which were largely spent on enhancing brand image, explains Pradeep Kar, chairman and managing director, Microland.

Providing a particular perspective on the dynamics of the hardware industry, Ganesh Mahalingam, general manager-marketing, LG India, points out that market operating prices for computer peripherals have crashed, thus affecting the turnover of the IT peripherals company to a great extent. Advertising budgets are directly related to turnover. The advertising scene on the peripherals front

has not been as active as the last year, he explains. In terms of PC companies too, there has been a check on advertising activity, particularly in the last 2-3 months on account of Intel stopping promotional funds to them. Says Paul, About 40 to 60 percent of advertising funding in the PC market comes from Intel. With Intel choking funds, companies are now forced to bear costs alone, leading to the current situation.

Traditionally, the hardware sector has always advertised significantly and cutbacks have not been as severe as in the case of software. Says Anand Iyer, country general manager, APC, The IT industry had witnessed an unprecedented spurt in ad spend from non-traditional advertisers like the software and services sector in the recent past, who have now decreased their spends significantly on account of the dot-com crash, cuts in pre-IPO corporate campaigns, and huge recruitment spends with IT companies.

A VALUE PROPOSITION? For several companies, ready availability of VC money also fuelled the advertising boom. Now, companies have started realising that a Nasdaq listing is not the only objective of advertising as had been seen earlier. According to Ranjyoti Barooha, CEO, Brandquiver, this has been the result of the much needed reality check on advertising spends in the software industry. The fundamental fact is that software companies essentially function in a B2B environment, wherein buyers are mainly corporates. Somewhere along the way this was forgotten, and the emphasis shifted to IPOs, he adds. In order to boost

this sentiment, IT companies started advertising heavily. As the IPO bubble burst, the rationale of advertising spends reverted to the original i.e. talk to buyers. The questioning of the role of mass media advertising for a B2B environment, points out Barooha, has been one of the main reasons why the advertising of software companies in particular has dropped to rational levels. In terms of IT companies cutting down on individual ad budgets, both industry experts and players in unison point to the slowdown as the foremost factor driving the trend. With constraints on their pockets during a time when revenues are hard to come by, there is increasing pressure on companies. According to Batra, a lot of IT companies promotional and advertising budgets come out of their international or South Asia (or ASEAN) budgets, which have now been cut. Hence, companies are not spending as significantly locally as they did earlier. Elaborating on the mix of advertising budgets of the global IT companies, IDC points out that generally advertising budgets of these companies comes from three sources global headquarters, regional headquarters (like A-PAC) and direct local spending. With the global and regional headquarters squeezing budgets, the direct local spending has also taken a dive, adds Avasthi.

According to experts, in a scenario like this it is allied activities and expenditures that are most likely to be curtailed first. And advertising tops the list of such avoidable expenses. While companies cannot afford to cut down on activities like direct marketing, manpower and infrastructure, advertising seems to be the most likely and easiest way to cut down on costs.

The current recession has been unsparing to any industry; more so the IT industry, which had been enjoying galloping growth rates the past few years. This has imposed a lot of discipline in the industry; and every expense is being given a second look, adds Rajendran. According to Sameer Kochar, managing director, Skoch, a certain amount of rationalisation has set in with the slowdown forcing IT companies to have a more focussed approach. Thus, the earlier lavish advertising budgets are now being re-directed towards more programme focussed marketing activities like direct and below-the-line marketing. According to most players, it is very difficult to calculate return on investment and the direct impact of advertising activities of a company on revenues. Companies are currently looking at focussed and result-oriented marketing activities which can directly back sales like direct marketing. There is now greater emphasis on direct contact with the customer which is not possible through advertising, explains Saurav Adhikari, president, HCL Infinet. According to Avasthi, another reason for the shift in focus has been the growing maturity of the Indian IT industry as a whole. Two to three years ago, companies needed to establish a brand image as well as create awareness about their offerings. For this, advertising is the most suitable medium as it helps in positioning and creating top of the mind recall value, he adds. However, as the Indian IT industry has evolved to higher levels of maturity and moved up the value chain, the focus is now shifting from creating mind share to creating actual sales. While advertising is good for creating mindshare, its worth in converting that into actual sales is still not clear. When it comes to actual sales, mass

advertising does not work, adds Sunil Robert, manager-corporate relations, iflex solutions. With the industry growing mature, so has the customer, whether it be corporates or consumers. Customers are now more aware and demanding than before. IT decisions are now high involvement decisions with customers calculating the true value for money from each offering. A mere brand name is not enough any longer, explains Avasthi. Companies are now realising that direct marketing is more effective when customers are choosing their IT systems, as not only can they get a first hand experience of the offerings, but also reason the value of their offerings.

Crystalgazing Experts believe this trend of companies adopting a more rationalised approach towards advertising will continue for the next one year before the industry starts evolving a more balanced approach towards its advertising activities. They add the IT industry will continue to experience a downward trend in terms of advertising spends for the next three quarters, after which advertising budgets are likely to be revived. While advertising activity in the IT industry is likely to pick up the mad spends or dizzying growth rates that we saw till about a year and a half back will not return, explains Barooha. Even players are optimistic of a revival in advertising spends. The current dip is temporary it is just that the trough is expected to continue well into the second half of next year. We expect the market to bounce back towards the last quarter of next year. However, lessons from the slowdown, the dot-com bust, and the realisation that

fundamentals have to be adhered to, will see more targeted ad spends in the future, says Rajendran.

While advertising spends are set for a rebound, sluggish customer demand will force IT companies to deliver value in new ways. This, according to Rajendran, will include road shows, customer seminars, advertising in new/different media like scroller translites at ATMs, etc. Further as Iyer points out, there will be sharper, targeted messaging, and a collaborative tactical effort. There will be an increase in bundled offers that seek to amortise costs of campaigns. Restricted media campaigns are likely to be matched by increased below-the-line messaging, like direct marketing. Greater accountability would be the norm for companies, he adds. According to Batra, there will be an increased focus on response-based advertising to measure advertising effectiveness, with the IT advertiser and marketer to rely heavily on eCRM and technology-based relationship and brand building tools. Hence, while advertising and brand building activity will continue as big brands continue to find ways to differentiate themselves, the conceptual rigour employed by consumer marketing companies are likely to be increasingly adopted by IT companies even as they seek ways to quantify returns on spends.

The fragmentation of media is presenting a new challenge to traditional agency working practices. Clients demanding widespread media mean that creative departments have to come up with campaigns that work across multimedia. This is prompting a growing need for collaboration between

creative and media departments within agencies to find co-ordinated marketing strategies. This cross-media campaign style also has to deal with cross-geographic advertising. The pan-regional campaign is now a reality despite some industry insiders claiming that such advertising is always diluted to the common denominator and ultimately lacking in effectiveness.

A) NEW ALLIANCES FOR NEW MEDIA Computers can now possess human traits. They can talk and make

decisions. New computer programs can simulate animation and sound. Colour printers can now produce a piece as high quality as a photograph. With all these improvements and additions, less studio employees will be needed to fulfil these tasks that are now completed, to a higher quality, by a computer. 1) Many smaller clients are beginning to use in-house advertising because it is so easy to produce a web page and much less expensive. Account managers now need to work extra hard to convince their client that the creative work done by the advertising agency will be done faster, cheaper, and cost-efficiently. 2) Media buyers and planners must engulf themselves in research so as to determine what is the most beneficial media outlet for their clients service or product? With regard to the technological advancementsinteractive

media stands out first and foremost. Following close behind are web pages, web

banners and Internet and Web advertisements. More people today use their computers rather than watch television. 3) Media consultants must take their findings and inform the creative team of these drastic reforms. Computer programming, QuarkXpress, Adobe

Photoshop, and Adobe Illustrator were once the industry standards for computer graphics. In the competitive state the agencies stand in today, the creative team must be fluent in digital animation, such as familiarity with computer programs such as Dream weaver and Flash 4. Clients want their web -site, a fairly new concept to most, to now be equipped with moving banners, advertisements, and interactive capabilities. The creative team is no longer just a brainstorming session, but a highly skilled computer graphics team. 4) Another problem the modern advertising agency faces is all the mergers that communication companies such as MSNBC are participating in. Microsoft, a media giant is taking over the media business. This could affect an ad agency advantageously should a discount on all their media outlets apply. Otherwise these mergers could become a communication monopoly, proving lethal especially for smaller agencies without a huge financial backing. Technological advancements are changing the role of the modern advertising agency. 5) Pertinent technological advancements are currently being employed in modern advertising agencies. One of the most influential technologies is the Apple Power Mac G4 and G4 Cube. The Power Mac G4 Cube is smaller

rendition of the G4, measuring only 8 inches per side and weighing only 14 pounds. The Apple G4 and G4 Cube have a ATRAGE Pro 128 graphics card with 16MB of SARAM graphics memory pre-installed, and a 1200-pixel resolution at 32 bits per pixel. In other words, the resolution is so high that the computer monitor displays a perfectly crisp image and is capable of producing millions of colours. This is an extremely important feature for graphic

designers, web-page designers, and other members of the creative team. The more clear and precise a computer image is, the more professional the finished advertisement will be. The G4s allow all creative work to stay inside the

agency, rather than sending work out for free-lancers and print shop specialists to touch-up an ads images, keeping expenses down. 6) Another beneficial feature that the G4 offers an advertising agency is the superior performance backed by the ample memory capacity. The G4s are currently capable of 1.5GB of memory and more computing power than PCs four times four times their size. The G4s now let the creative team make professional-quality desktop movies with the Apple iMovie software and moving web pages with sharp sound.

Apple Power Mac G4 Cube

7) The speakers have a digital amplifier and are produced by Harmon Kardon, the leader in audio technology. The total audio output is 20W, the highest frequency of sound yet to be achieved from a personal computer, making an advertising agencys web pages even more interesting with life-like sound. DIGITAL AMPLIFIER BY HARMON KARDON

8) The Apple G4 comes equipped with FireWire, a connector for digital video camcorders and cameras alike. This allows shots to be filmed without a large crew and directly download the frames onto the computer, permitting the monitor to double as a television screen. Television commercials can now be edited on the G4 with programs such as iMovie, QuickTime4, and FireWire, knocking out the astronomical costs and the time consumed by primitive video editing equipment. Not to mention that the digital camera, such as the HewlettPackard Photosmart 912, with features such as a Pentax Precision digital zoom lens with the capability of shooting two centimetres in maromode, produces shots with professional quality and resolution.


9) The ability of the digital camera to have such pristine images is due to its 3D graphic capabilities. The CRT monitor has a built-in 15-inch shadow mask, three flicker-free screen resolutions, and 24-bit true colours. How does the G4 and all of its features affect the modern advertising agency? The Power Mac G4 can simulate the human voice, the monitor can display an image as sharp as a photograph, and with the assistance of pre-installed programs, movies and web pages can be edited without any outside aid. The G4 is able to

complete tasks that studio employees once created by hand. Although the G4 is advancing an advertising agencys work, it is also replacing members of the creative team. 10) In April of 1998, Apple Computer, Inc. and Hewlett-Packard Company formed a printer alliance. With Apple being number one in computer sales, only to be boosted with the release of the iMac, and Hewlett-Packard running a close second, it was a smart business move for HP to make their future ink-jet printers compatible with Apple products. Hewlett-Packards Desk Jet 648C color printer was the first of the Apple compatible line. The Desk Jet 648C can print directly from the computer or a digital camera. This model is capable of printing images on photographic paper. The finished prints are realistic due to Hewlett-

Packards PhotoRetII enhanced color layering technique. This model is also able to print up to six pages per minute in black and white, and three pages per minute in color. Now mock-ad campaigns for clients can be more influential with the vibrant colors and rich black text. The print ads will be completed faster and resemble more closely the actual ad. In other words, the quality of the mocked ad will be more impressive and easier for the client to see what the agency has in store for them. 11) Hewlett-Packards latest release, the e-printer e20 is capable of printing websites, e-mail, and other interactive content from television. The e20 can connect to a TV or computer like a VCR or DVD player and print up to 600 dots per inch. Considering movie posters and most magazines are printed in 300-400 dpi, the e20 produces an extremely sharp hard copy of the image viewed on your


This could propose copyright issues for advertising agencies,

because their images can be downloaded or directly printed from a personal computer or television. 12)Hewlett-Packard has also introduced the e-scanner for WebTV. This scanner not only has the abilities of HPs high quality ScanJet 4300C, but can also connect to a television or computer to scan images right off of these mediums. There is even a rotate button that turns electronic images at whatever angle you choose. E-scanners display images at 300 dpi and has moved the modern

advertising agency to a new level. The days of looking through stock photo books for hours and paying the company with ownership rights, hundreds of thousands of dollars for a years worth of use and the possibility of the image being re-used by another company after your contract ends, is over. The art buyer and creative team can simply scan images off the Web or television and use them for their own pieces repeatedly. The e-scanner serves the art buyer well, by making the job less tedious, less time consuming, and virtually free. 13)Internet advertising has come a long way since the day HotWire flared to life, October 27, 1994, boasting the Internets earliest banner ads, (Riedman, 106). With the introduction of Flash, which is Macromedias interactive

program and animation tool, the role of the web banner has changed. This program was created especially for web designers, and is responsible for computer-generated games, cartoons, banners, the pulsing buttons and moving letters on web pages. Interactive programs are easier than ever to use 150

tutorials, 500 games, 1,000 sound loops, 2,000 movies, and 4,000 links. The 3D graphics of this program have yet to have a worthy competitor and Flash is becoming the industry standard for the graphic designers and web design members of the creative team. People are teaching themselves how to use these programs and landing jobs in the creative ad world; because Flash courses were not offered until June of 2000. People who have never been formally trained in these interactive programs are being hired because of the clients demands for interactive web-sites. According to the Internet Advertising Bureau, web ad revenue was $2.8 billion for the first three quarters of 1999, it is expected to approach $6 billion this year, (Dowling, 450). 14)Matt Carmichael, staff writer for Advertising Age says, The future of interactive advertising is a bright and happy one, because it will reduce the probability of a feminine hygiene product ad showing up on my TV screen to roughly the same probability of my ever buying such a product, at least for my own use, . He believes that banners will continue to use more of

Macromedias Flash because of the sound, 3D graphics, and animation. He recommends for well known and established products to continue implementing web banners, to reinforce their campaigns, in advertising terms: branding their product. The future of interactive advertising might mean never having to see someone elses ads. Carmichael predicts that eventually everyone will have some sort of wireless communication device. Whether it is cell phones, two-way pagers, palm pilots, or all of them. The most successful marketer will able to

communicate with all of them, says Carmichael. Secondly he believes that consumers will be offered incentives in exchange for personal data and the right to contact them in more personal ways. Possibly offering discounted cell phone time or free wireless devices. He asks, What if your cell phone received an email message, Youre only a block from a Starbucks; stop in for a 20% discount on your latte, . The data is available and marketers are beginning to tap into these resources. His latest prophecy is that interactive television will allow a viewer to click on objects you see in shows and buy them. Your TV will keep track of what you are watching. Carmichael says your TV will even know what kind of car you own because, youll tell, for the free oil change youre offered in exchange. The oil change will be compliments of your TV provider, and it is good only at certain oil-change company, which has paid handsomely to be the official oilchange provider of the TV company, . Advertisers will be able to send out specified ads for you through TV and e-mail; you will even be able to schedule an appointment through your palm-pilot or cell phone. Yes, advertisers will know everything about their customers.

Customers will be rewarded with targeted advertising and the signal-to-noise ratio in advertising will decrease dramatically. Everywhere you go, ads will find youTheyll be your ad-for you and nobody else, . 15) Most companies are experiencing conflict as to whether or not they will use in-house advertising. Most companies do not have the manpower or financial

backing to formulate their own ad campaign.

However most advertising

agencies fees can be pricey, so to reduce clients costs, many agencies are hiring ad networks. Ad networks act as brokers to connect web advertisers

and web publishers, or the buyers and sellers of web ads. Ad networks not only do the research for the ad agency, but also target the clients advertising and measure the results of the agencys campaign. The networks are a wonderful resource for ad agencies, especially the smaller ones. The top ad networks, which were introduced in the early 1990s and remain in the lead, are DoubleClick, 24/7 Media, Flycast, and AdSmart. Marissa Gluck, an analyst for Jupiter Communications specializing in online advertising, says, Ad networks enable advertisers to get their message out without the expense of building a sales force. With ad networks, theres no cost for you at first. You dont have to build a sales force, you automatically get reps all over the country. Gluck also mentions the targeting is an ad networks specialty, If youre selling dog food, for instance, you can run your ad on a dog lovers site, or iVillages pet-targeted sites, (Hamm-Greenwalt, 36). The ad networks then charge advertising

agencies a commission on advertising sales, or on a pay-per-click basis, measuring by CPM, or cost per thousand. The billing cost varies on the

dependent variable: how many eyeballs see an ad and the type of web site on which the ad appears. 16) Jeff Lehman, chief revenue officer of Flycast suggests, Ad networks dont replace traditional agencies, they work with them, taking the creative- the actual ad-and placing it on web-sites appropriate to the advertisers target. Involve the

client, the agency, and the ad network in the whole process. Lehman also notes that in-house agencies do not have the technological know how, nor the objectivity to create a successful ad campaign. He says, There is so much more than the traditional banner ads, think beyond whats already been achieved, to interactive opportunities such as event sponsorships, interactive applications, contacts, promotions, and games, . The fast food chain Wendys is sponsoring the Find the Next Great Hamburger Song Contest, where aspiring food fans upload their songs to as MP3 files. The winner of the contest receives a chance to perform his or her song, with Wendy's CEO Dave Thomas as lead singer, on CBSs Late Late Show with Craig Kilborn, (Gardner, 1). Wendy's song contest is a perfect example of Lehmans theory of interactive promotions building brand awareness. Communication giants have altered the way in which a traditional advertising agency budgets itself. Microsofts merger with NBC has started a trend for converging services to cover the expanding global market. 17) Media buyers and planners are facing the obstacle that they rely on outdated media and pricing models, and are not implementing much needed innovation. John Nardone, president at Media Poppe Tyson, an interactive ad agency, says, Its a fusion medium, and because of its multidisciplinary nature, you have people attacking from their individual areas of expertise, with traditional metrics. Few people look at it with a consumer perspective. On the Internet, user behavior dictates, and you have to build your programs based on that, .

18) Modern technology reforms are affecting every aspect of the advertising agency. Each sector of the agency is experiencing a change in their actual job structure. The account executive is the person in an agency that is typically in charge of a specific accounts advertising. The account executives are the mediators

between the ad agency itself and the client whose account he or she is overseeing, . For instance, the executives in charge of the Coca-Cola account, worth $64 million have a great deal of pressure residing on their shoulders. As of May 2000, Coke had never participated in an on-line interactive campaign. However, Coke representatives told Rich LeFurgy, chairman of the IAB that, Our ad agencies (there have been numerous) have been criticized for dusting off media plans year after year without looking at alternate media types. CocaCola, considered a traditional company, wants to incorporate the Internet with its unique combination of strengths. LeFurgy also says, Many big companies were confounded as to how to sell goods on-lineCoke is also using a combination of on-line and off-line cross-promotions. The account executives relay what type of media Coke wants to use to reinforce brand awareness. The creative team is then informed of the image that the company wants to portray. What was the outcome? Coke partnered with AOL in packaging,

merchandising, advertising, and in-store promotions and will concentrate its campaign on music, sports, movies, holidays, and community. Cokes account executives suggested that the company support AOLs Moviefone brand through

promotions. Additional advertising included Cokes sponsorship of the 2000 Olympic Games. Cokes account executives realized that, Prominent consumer companies have quietly adopted the Internet as part of their marketing programs, .

19)The media planners and buyers must look at traditional research such as the Nielsen and Arbitron ratings, but also now consider ratings from ACNielsen Why? The Internet is advancing quickly into one of the top advertising mediums. Jupiter Communications said, some of the growth in on-line ad revenue will come at the expense of traditional advertising as marketers do a better job of integrating their on-line and off-line efforts. One likely victim will be newspaper and magazine classifieds, as on-line classified ads grow to six percent of all classifieds and bring deep discounts to the market, . Planners and buyers must be able to segment their target audience and find which medium and what time suits their client best. The Super Bowl is a great way to get an evolving company or product started. With 131 million

Americans watching the Super Bowl, advertisers jump at the 36 spots. Internet sites bought 17 of the 36. According to Media Matrix, Web-site ads debuting during Super Bowl XXXIV, or the dot-com bowl, showed that traffic was increased by 38.7 percent. Rising by 4 million unique visitors. The media planners and buyers had done their research well and it paid off, considering a 30 second spot was $2.2 million, .

20)The creative team has to endure the most change when compared to any other sector in the advertising agency. The account executives inform the art

directors, the ad agency specialists who are responsible for the finished visual effects of the ad and the creative team, of what image a company is looking for and what type of consumer they are attempting to attract. The media buyers and planners inform the creative team of what mediums to produce the ads for, whether it be a TV commercial, radio spot, billboard, or web-banner, . Roger Cameron Wood, vice president of global e-commerce for Boston based Reebok, confronted CyBuy to create on-line banners. Reebok has taken its first step into on-line marketing with pop-up banners that enable shoppers to make purchases on the spot, rather than requiring them to go to another site, says Wood. Banners are running on sites with related content in the AdSmart network of 375 sites. Reebok thought that on-line marketing was a new and creative way to draw more traffic to their product, in a space that was dominated by consumers like The Gap, . Doug Heyman, Technology Director at DiMassimo Brand Advertising, NY, believes the creative team to be most effected by new technology, The studio is in the most advanced stage of technological turmoil. The G-3s which became widely spread less than two years ago, have already been replaced with G-4s. With every computer there are new programs and it is hard for studio employees to keep up with technology while trying to do their job. Which explains why there is such a high turnover rate in the creative department. The agency always

wants the freshest technological skills and program knowledge. Heyman offers a free weekly night course to his fellow DiMassimo employees so they may keep abreast of programs such as Flash, an interactive animation program. With advertising moving away from traditional mediums such as radio and billboards, a greater emphasis is placed on highly personalized digital TV ads and pop-up banners. That means creative employees must learn more about computer

graphics and a little less about the traditional ad layout or broadcast spots. Advancing technology is making advertising more entertaining and personalized with its interactive capabilities. But ad campaigns like VW Bug will always be famous for the beautiful layout, but our audience just is not driven to traditional mediums as they were in the past. There is another popping up every second it seems, states Heyman. The modern advertising agency has to adapt to technology in order to be successful. With all these improvements and additions, less studio employees will be needed to fulfill these tasks that are now completed to a higher quality, by a computer. The creative team is no longer just a brainstorming session, but a highly skilled computer graphics team.

B) WORLDWIDE FORECASTS With the growing internationalisation of both agencies and accounts, as well as the continuing search for successful cross-border campaigns, the health of the global advertising industry is becoming of ever more importance to Indianbased agencies.

THE US Without doubt, the US will remain a major marketplace, with an unparalleled range of advertising media outlets in broadcast, print and other media (not to mention high connection rates to the Internet and no terrestrial TV). Advertising expenditure may decline slightly, due to an expected dip in the countrys economic fortunes around the turn of the century. EUROPE Europe will remain a major market too. The expected decline in the UK market will not be reflected on the Continent, where the business cycle is positioned at a lower level currently and is rising. Eastern Europe is expected to become increasingly important, especially for fast-moving consumer goods (FMCG) advertisers. Similarly, growing regional economies such as Greece, Portugal and Ireland are expected to see advertising revenue and billings rise by the turn of the century. Russia remains a problematic marketplace but is generally expected to be a growing one. ASIA Asia is currently a region of split intentions. The economic downturn in the latter half of 1997 initially led to a collapse in advertising expenditure that particularly affected the print media. However, an unforeseen consequence of the downturn has been the rise in TV viewer ship and the growth of advertising spend on broadcast media. China is a rapidly growing market, as, to a lesser extent, is India. The major adverse effect of the economic crisis will be the projected downturns in Japanese advertising spend.

HIGHPOINTS: - FOR INDIAN ADVERTISING AGENCIES Aside from the ongoing corporate campaigns, there are a number of date-specific and upcoming events that will generate additional income for the Indian advertising agency: Privatisation of PSU such as Air-India, Maruthi Udyoug Ltd, Telecom Sector, various mining sector and Service sector which currently subject to approval by the Government of India. Major Players in Telecom AT&T, BPL, AirTel, Reliance, TataIndicom etc, New Millennium requirements. 2003 Afro-Asian games and the World Cup in 2002, jointly hosted by Andrapradesh India hosting the 2008 Common Wealth Games etc. Growing development of tourism as Industry Various multinationals trying to establish a strong hold in the Indian Markets Growing Consumer Awareness towards Value For Money (VFM) And the strong inclination towards following business ethics growing concern for environment protection The growth of digital TV and the Internet in India General Election in 2003/2004 at the latest or possibly earlier, as well Parliament elections, elections to the Assembly in 2003 and regional elections.

The strategies and instruments exist to help the advertising sector to play a significant part in sustainable development in the future. The outlook however is heavily conditional on the provision of more evidence in the shape of sustainable products and services to give something for the sector to communicate. While the feel that blanket promotion of all aspects of sustainability by governments is probably unrealistic, the budgets must be created to promote key areas and to help to educate consumers. The advertising sector should not rely too heavily on consumer interest in sustainable principles alone to translate into behavioural changes.








SUSTAINABILITY: assist product and service companies to be aware of consumer interest in sustainable principles and opportunities in brand positioning, enable manufacturers to make their commitments to sustainability clear to consumers and to differentiate themselves accordingly, promote the sustainable attributes for products when appropriate to do so, through educational campaigns, provide information and persuasion on sustainable issues, ensure that its advertising industry is as efficient as possible.








SUSTAINABILITY: introduce or promote products on sustainability platforms contrary to consumers actual brand choice criteria; censor manufacturers advertising for products that are not considered by some to be sustainable; change lifestyles of consumers in the face of prevailing social trends, for example from disposability to permanence; counteract the educational, editorial or legislative context within which advertising operates as a relatively weak force; regulate overall demands for goods and services. B) STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) FOR INDIAN ADVERTISING AGENCIES

STRENGTHS Indian advertising agencies are strongly positioned within the international advertising industry, both as parts of global groups and as respected creative firms in their own right. India remains a major advertising market with multiple media outlets, comparatively lax legislation and a base for major fast-moving consumer goods (FMCG) corporations. India is also still the centre of the Asian-wide advertising industry. The onset of digital television (TV), widespread adoption of satellite, cable and multi-channel terrestrial TV are providing additional media space, as

well as the continued growth of commercial radio, the regional press and the number and scope of magazine titles. Advertising industry is embracing new electronic media, such as the Internet, as an additional strength and has well-developed design, technical and creative skills to exploit the new media. With India positioned at the upper end of the business cycle, account revenues are the highest they have been throughout the 1990s. WEAKNESSES Any slowdown in the Indian economy, as is expected to occur, will be a weakness, as advertising is an industry that is very responsive to trends in the wider economy. Larger agencies are finding that smaller, although highly creative agencies, are successfully winning accounts. A prime example is the highly rated R.K. Swamy/BBDO agency. Listed advertising agencies are finding that their share price is often volatile due to rapid switching of accounts between agencies. The growing concentration of media power in the hands of a smaller number of players means that advertising space rates are increasing.

OPPORTUNITIES Web advertising is expected to become increasingly popular, with an estimated 150 million connections to the Internet by the year 2000.

Likewise, digital TV will provide additional segmentation of the TV market, allowing advertisers to target niche markets such as sports fans, news fans, etc. With segmentation becoming ever more defined, more general advertising opportunities, such as posters and billboards, have become popular again, with advertisers seeking to achieve maximum exposure. Ambient advertising is a growth sector and is providing creative opportunities for both agencies and site promoters.

THREATS The rash of risqu adverts such as the Cola-Cola and Pepsodent campaigns have led to renewed calls for greater restrictions on the content of advertising. Any clampdown on creativity would obviously be a threat to agencies. The current consolidation of the industry into several larger international holding companies may ultimately be a threat and lead to a drop in creativity and diversity. The onset of any recession in the India would obviously be a threat to the industry, as it would reduce advertising expenditure across the board.



Brand image is heavily influenced by social image - one of the most important challenges business is facing. Brands will be important in setting social and political issues as traditional government fails. Any good advertising agency giving advice to a company has to include ecological issues because customers are demanding more active stands on social and environmental issues. Pierre Huppert, advertising consultant, The Netherlands


10.1 EMERGING TRENDS AND DEVELOPMENTS The advertising sector is very much susceptible to the winds of change. With globalisation as a major trend, together with what is called glocalism, which is a more recent development by more experienced global advertisers. i) Globalisation Globalisation is changing the landscape that business is operating in. Before 1989, two geopolitical power blocks, each with its own ideological and economic system, faced off across the Iron Curtain. In todays post-cold war world, trade, commerce and technology have reconfigured the global balance of power equation. Market forces and large corporations in many ways have an increasing impact on peoples lives, while with the fading of national borders, governments and regional authorities are re-shaping their roles and responsibilities. An important question is whether the emerging global market and the purchasing power of the urban population are driving the homogenisation of lifestyles and popular culture. Between 1965 and 1998 average incomes in developing countries more than doubled. Per capita incomes are rising, and habits of diet, mobility and resource consumption are changing to reflect

industrialised country patterns. Consumer aspirations are increasingly similar in urban centres throughout the world. However it appears that fears of converging lifestyles and loss of identity are overstated. If one defines living in poverty and consuming accordingly as lifestyle, it must be true that higher living standards alter lifestyle. Given that developed markets achieved this altered lifestyle before emerging ones, it is questionable whether emerging consumers are emulating developed (or northern or western according to how you want to describe them) consumers. It seems that if a developed lifestyle is described as watching TV, living in houses equipped with electrical devices, driving cars, and adopting a faster lifestyle, then emerging consumers are not ape-ing anyone, but are achieving a better standard of living, while preserving whatever they wish of their traditional culture and lifestyle. It is where traditional culture is inconsistent with the lifestyle changes that greater affluence brings, that we see consumers being forced to make a choice.

ii) Glocalism Advertising is very close to people and to the trends that affect them. It is also totally dependent on business trends and reflects them closely. This is why the Indian advertising sector is so deeply influenced by the changes on a global level today. The change towards a worldwide market, the technology development and the shifts in consumer preferences and desires, binds the

advertising sector ever closer to their clients and to the success or failure of their marketing, which increasingly demands cross-border communications. However, contrary to what one might expect, the trend are not entirely towards creation of global advertising campaigns, industry has had to adjust to the realisation that the global village is a very unfamiliar place. The idea of using advertising formulas which had been successful in the developed industrial economies to the rest of the world seemed attractive, economical and logical. There are many such cases where, what are called one sight, one sound, one sell campaigns achievable and successful. Marketers have soon learned however that what worked for one brand did not necessarily work for another, even in the same product category. In addition, brands do not cross cultures easily. In India alone, the MTV brand, Channel V etc soon had to customise its music video channels programming to the local tastes of the young in the country. The problem, though, with generalising about trends in global communications is that advertisers in different categories and even in different locations are at different stages of the process. For every category that has become experienced in use of global communications, there is another just emerging and trying to achieve the one sight and sound, which they believe, drove development of the likes of Coca-Cola. Globalisation of communications depends on three factors being in total alignment:

The product category, which must be similarly structured in each country, with similar brands dominating, similar distribution, pricing and product formulation. Also similar legal constraints on purchase; The consumer, who must have the same needs and wants, use the products in the same way and have similar cultural reactions to the product or its use. For example beer is not sold for in-home consumption in many countries where it is freely available, because cultural barriers prevent it; The Company, which must be used to central control of communications, which impacts on management responsibility, motivation and job satisfaction. More global campaigns fail because of the company culture than for any other reason.

Many clients and agencies have now abandoned one sight, one sound as the holy grail of advertising in favour of what are called glocal solutions. Glocalism allows them to control the development of their brands with a global core communications strategy, but to execute it in ways, which are locally culturally relevant. Thus people seeing MasterCard advertising in over 30 countries think it is a campaign designed for them. However if they step back to a global view they see one brand emerging. This has come about through realisation that the global village is a very different place than what was expected 20 years ago. In the global village, as seen, there is a confusing mix of people. Many adopt some global characteristics we see a young African playing soccer in a Chicago Bulls T-shirt but reject

others. What we see developing are global brand citizenships, where people show allegiance to a global club which is not divided by borders, but united by values. Brands express these values, so people wearing Coke T-shirts in India and USA are sharing a global citizenship. But that does not make them the same. The brand does not alter their identity; it merely gives them a comradeship with other cultures, which is impossible to create by any other means.

As an industry, the Indian advertising sector has had to come to terms with the fact that it is people that create brands, not marketers. Citibank card is a powerful global brand, but BOB card is not. Are the marketers of Citibank so much more astute than those of BOB? Of course not. Consumers have formed a global citizenship around the values and identity that they perceive to be Citibank. However it has to be realised that consumers are not slaves to brands and are never captured for life. It will be almost impossible to find a young person wearing Sergio Tacchini, Nike, or any other gear from head to foot. He or she may have as many as four or five brands visible or none at all.

iii) Media The ongoing developments in new electronic media the Internet, the CD-Rom, the spread of cable and satellite TV and, before long, interactive TV lead to increased transparency. For example, by using the Internet to convey information at the speed of light, peer groups can easily interconnect to take

actions on specific issues. The Internet also allows voices from inside organisations to reach out to small groups of people to spread their messages swiftly around the world. Web sites are an important tool for coordination of communication among and between non-governmental organisations (NGOs), media and the general public. In many respects, the media revolution is one of the biggest challenges that Indian advertising industry has had to face. On the one hand the spread of TV and the Internet might be expected to have made the process of taking information and persuasion to consumers easier. However, whereas it means that consumers can now be reached in areas of the world which were impenetrable before, it is more than offset by the much more dramatic breaking of mass consumer markets which need to be contend with in developed countries. The proliferation of media channels, high penetration of video recorders allowing programme rescheduling and editing out of advertising messages, has made it progressively more difficult to contact consumers in a cost-effective way. The mass captive audiences of the 1970s and 1980s are a thing of the past and average cost of reaching viewers with TV advertisements has increased accordingly. On one hand the cost of advertising to broad populations has increased, but on the other greater efficiency is achievable by contacting more discrete audiences, with less wastage of those one does not really want to cover. The fragmentation of mass audiences has, to a large extent caused the broadening of advertising

into what is termed integrated communications, where advertisers have to be able to coordinate messages through a wide range of communication channels, including the so-called ambient-media we see around us. What has been interpreted by some as increasing aggression by advertisers, is in fact a constant attempt by them to reach consumers cost-effectively. iv)Media literacy Simply having access to a full range of media and of advertising channels, however, does not mean that consumers perceive them in the same way. The concepts of media literacy and advertising literacy have been invented to describe the different ways in which images and messages are understood. Advertising literacy is generally understood to be conditioned by a mix of the amount of experience people have of receiving advertising messages and the cultural environment in which they are received. In the early days of commercial TV, companies which were able to afford TV campaigns were given a high degree of respect and status by consumers. Their products were regarded as by definition the best and were generally preferred. However, suspicion of the power of TV and of TV advertising soon grew and fuelled cynicism of advertising. In the most developed markets these problems were largely overcome in the late 1950s and early 1960s with introduction of a combination of selfregulation codes on a basis of legislation against misleading statements. However the introduction of commercial TV has been a gradual process and

different societies are at different stages in development of advertising literacy. This affects not only the respect for, or belief in advertising messages, but also the ability to comprehend the social issues, and the perception of the likely effects of them on others. This is not a first world/third world issue, but one, which affects all societies to some extent. It is notable that in India, which was relatively late in adopting commercial TV, perception of its power is generally far higher than, say, in the United Kingdom or France. Coupled with an official view of their consumers as being in greater need of protection, this results for instance in a ban on advertising to children. This view is challenged by leading academics, as shown by studies collected and made available by the Advertising Education Forum . Some cultures are indeed more literal in their understanding of communications and this creates difficulties in using global advertising or even the creative ideas behind it. This is no different from the fact that cultures in Africa, or elsewhere, which have had little exposure to pictures or photography, have difficulty rationalising perspective in pictures. The advertising messages directed at consumers in United States or Europe in 1950s were slow, pedantic and repetitive compared with what they follow quite easily today. The idea that advertising can make people buy things they dont need or want, although disproved by academic study many times over, is a prevalent one which is constantly re-fuelled as more societies come into contact with the medium for the first time. It is not surprising that if some

believe advertising to be capable of wielding this power, they will also believe that it can just as easily be used to change lifestyle in favour of sustainability or anything else. Such power is part of the mythology surrounding advertising and not part of the day-to-day reality. v) Advertising agents and suppliers The advertising agency has changed dramatically in the last ten years. The consumer and media changes already discussed, together with advances in technology have made advertising agencies almost unrecognisable. It is believed that they have made the operation of agencies not only more costeffective, but more sustainable. To cite one example, use of MS PowerPoint for meetings and presentations has replaced paper and card charts almost entirely. Agencies were traditionally very heavy users of these materials. The process of supplying original materials to media owners in electronic form has similarly replaced board based artwork, which additionally required considerable space for storage. Advertising is close to people and to the trends that affect them. It is also totally dependent on business trends and reflects them very closely. So globalisation and convergence are big influences on the advertising agency business. New technologies have changed the way agencies work, so that where once there were rooms full of artists and lay-outers, there are now Apple Macs. Where once agencies earned a commission on the media expenditure of clients, they are now far more likely to be paid fees, which are directly linked to costs

and agreed profit margins. They are also increasingly asked by clients to work on an incentive basis, with a substantial part of their margin dependent on sales success. This binds the advertising sector ever closer to their clients and to the success or failure of their marketing, which increasingly demands cross-border

communications. At the start of the 1990s the large, traditional, agency networks were severely challenged by what was termed as unbundling, the process of clients breaking up their communications and buying creativity, media, direct mail or sales promotions consultancy from separate suppliers. The traditional agency networks busied themselves at the time by expanding globally, to provide clients with more economical means to reach international consumers. The globalisation process in agencies was driven by clients, demands and the rapid takeover of local agencies by global ones was as much a matter of local agencies seeking international clients as of aggressive acquisition by the global networks. In fact very few were aggressive takeovers, since few local agencies were publicly owned. The history of the late-1990s and last two years has been a continuing trend towards even more economical provision of professional services, although this process is slowed somewhat by sensitivity of clients to their agencies working with competitors. The conflict of interests issue has been addressed by representative bodies and both the United States and European agencies associations have published

guidelines designed to allow agencies to handle more business, but some emotional barriers remain. It has been far harder for agencies and clients to achieve economies of scale in many disciplines like sales promotion, because internationalisation of these has been prevented by differences in local legislation. Present moves by the European Commission to remove essentially protectionist legislation in sales promotion are to be applauded and follow realisation that both satellite TV and the Internet make such things anachronistic and inherently ineffective. It is a sad fact that there has been a lot of protectionist legislation masquerading as consumer protection and this has obstructed progress towards cost efficiency in creating and delivering advertising internationally.

vi)Motivation in agencies Advertising agencies are a people business. The emphasis on research and consumer understanding in the last 20+ years has brought into the agency business people far removed from the image of the salesman. Creative and research planning functions, which are a large percentage of agency staffs, are often as green in their politics as any environmentalists. All of this encourages us to believe that the advertising sector is one which is open to sustainability and willing to do what it can to help to promote sustainable values, consistent with maintaining high professional standards of advice to its clients.

Understanding changes in consumption patterns is an essential part of the business of advertising agencies and their clients rely on them to remain close to consumer trends and emotions. They play an essential part in identifying those trends and assisting clients in positioning their products in ways which stay relevant to ever-changing consumer demands. The lifeblood of agencies is in bringing something new and advantageous to clients and consumers and it is clear that in encouraging clients to be fully accountable in their communications and to build positioning based partly on corporate responsibility, the sector is serving its own interests. Agencies love to win creative awards and it has long been the practice for agencies to handle several pro bono accounts, not for profit, but for the creative opportunities afford. It has often been said that the best creativity in many agencies is for their least profitable business and possibly the best known agency in Europe, Saatchi & Saatchi, rose to fame partly on the strength of issue led advertising. Advertising which highlights sustainable issues is a great creative opportunity for agencies. vii) Consumers Saturated and mature markets are causing a change in the relationship between consumers and producers. Increasingly, producers are moving away from mass-production and mass communication to target specific markets with specific products. The consumer has become much more the client that determines what product specifications are required and how the product is produced.

Take the car industry for example. If a consumer wants to buy a car, he or she can determine beforehand how the car is equipped, colour and other characteristics. Then the car is assembled and shipped for delivery. Previously, cars were produced in mass, ready for delivery and sold via masscommunication. Production and the driving forces in the market place are increasingly demand driven in the industrialised countries, while much more supply driven in the developing world. Perhaps surprisingly, the trend towards more personalised production has been shown in a recent paper by the WBCSD

to be conducive to achieving more sustainable consumption. This move

towards more individual choices and values is a healthy reversal of what some feared was becoming a headlong rush to uniformity.

viii)Engaged citizens The trend that is noted in consumers in industrialised nations towards greater individuality and personal, rather than collective values has led to greater concern about environmental and social issues and has put greater pressure on manufacturers to be accountable. The actions of activists in demonstrating at meetings of international governmental organisations, while dismissible in terms of real numbers of participants, are a sign of more engagement in these issues. This manifests itself in terms of brand choice, and it provides another clue to ways in which advertising can possibly help to promote sustainability, by helping global corporations to articulate their principles and actions.

It has surprised many corporations to be held to account by activists, for things which in the past they paid little regard to, like child labour or pollution in manufacturing or raw materials suppliers outside their direct control. However it has encouraged a general belief that there must not be double standards in production in home and overseas markets, even if local legislation allows it. Multinational corporations are now using codes of conduct and supply chain management tools to develop their own sets of rules regarding environmental and social performance abroad, and advertising can help them to communicate this.

10.2 LOOKING FORWARD I) FUTURE ROLE OF THE SECTOR The most crucial role of the advertising sector in the future will be in signposting the way to more sustainable products for consumers. For this to happen requires many things to be in place: Companies to devote more research and development to producing such products; Advertisers and their agencies to be more aware of sustainability issues, advertising codes and best practice; Consumers to be given guidance to help them overcome their assumption that sustainable products are likely to be more expensive and/or less effective; Restrictive legislation in some cases to be removed;

Companies to make their commitment to sustainability more visible to consumers.

II) MEETING THE CHALLENGES CONSUMER EDUCATION Consumer education looks at creating visibility to reward successful companies, assisting consumers in product recognition, achieving lifestyle changes, how to describe sustainability and how to brand sustainability.

i) Creating visibility It is believed that this is a long-term process. It can be kick-started by advertising if governments make funds available and we believe they should do so in order to provide the leadership demanded by the Pulse research described earlier. What may be useful is for the sector to produce a Communications Toolkit for Governments, containing information and strategies for providing sustainable issues. In addition to this, sustainability needs to be given some buzz, which will attract consumer and media attention. Many sustainability award schemes are already in place but not with a high profile. We believe that national governments together with UNEP should recognise and reward companies or individuals that make significant efforts. This could take the form of sustainability Oscars or Nobel Prizes and might allow or encourage use in

corporate advertising under strict conditions. The awards is seen as being limited in time scale (say for one year) and not leading to product badging.

ii) Product recognition The point has been made that consumers have difficulty in identifying more sustainable options and the temptation is to recommend badging possibly using the sustainability logo. We have to acknowledge however that we are not competent to advise on how qualifying standards could be set and how such a scheme could be administered. iii) Lifestyles changes There seems to us to be little prospect of altering lifestyles to suit the needs of sustainability through advertising. This must start in schools and be reflected in the values of society as a whole. At best advertising can only support and encourage values, which are inherent in society. As mentioned earlier the portrayal of racial intermingling in advertising might be helping to normalise what for most people may not be a realistic scene today. By extension of this point, we can speculate that there may be other areas where a similar contribution can be made and this can be discussed further within the sector. Allied to this, the sector can discuss means of avoiding tacit encouragement of unsustainable behaviour by portrayal of waste.

10.3 THE FUTURE Indian advertising industry has a bright future in the years to come as evident from what it has done and what it has as a potentiality to do for India in socioeconomic, cultural, ethical and educational spheres. Following points speak of its future. 1.Tremendous Growth in Business: Today, India is world's 10th industrially fast developing country and 2nd in science and technology against all its household problems. As a unique country believing in democratic socialism, it has grown from strength to strength industrially in different size groups, namely, small, medium and large, both private and public. This growth of industries has necessitated mass marketing efforts and new products are finding places in new markets through advertising. Today, Indian business community knows the value of advertising and, therefore, prepared to invest and spend on advertising. The very fact that the advertising turnover is of the order of 34,800 million rupees amply clears that more and more business houses are going in for advertising with fat budgets. It is nothing but the full faith in advertising- its creative work. 2.Globalisation Diasapora: Globalisation opens up fantastic opportunities not only for trade and technology transfer, but also for technicians, technologists, engineers, accountants, and of course variety of managers. The process of globalisation is interjecting change is our life-styles of far deeper dimensions than are apparent on the glossy surface. In borderless world that we are moving competition is getting firingly fierce

whether it is a case of capturing new markets or resource management. The interaction between micro and macro levels has become ultrasonic via satellite. The money markets have become internationally sensitive, therefore, the task of exploring and exploiting the new markets on the earth is going to be extremely difficult, because, billions of potential customers belong to lower and middle classes largely spread in developing world of China, Africa, Asia and eastern Europe and to a lesser extent in advanced nations as well. Like a dissolution of the USSR globalisation is an epochal change. Any change of cataclysuric nature throws open not only opportunities but exposes to challenges and threats. Globalisation coupled with liberalisation will substantially affect domestic markets. Thus, television is etching different life-styles on consumers all over the world irrespective of literacy levels and sustenance standards. Very soon the line of demarcation between domestic and international markets will be blurred. As the nation, state metamorphoses, sub-nationalities will assert for competitive advantages. Globalisation means a free-flow of factors of production- goods and services, labour and capital-across the globe without any government restrictions. It is manifested through markets, products of international quality standards, free access to quality raw materials, cheap finance, latest technology and free movement of managerial personnel. The year 1992-1993 emphasised globalisation of Indian economy and the liberalisation of the nation. The professed objective of globalisation has been to integrate individual economies into one world economy so as to ensure balanced growth, development of trade, avoiding islands of affluence and prosperity in the midst of an encircling ocean

of poverty. The plausible aims are to evolve a more just and equitable world order. Similarly economic Liberalisation is intended to evolve an economic system which will be free from rigidities, discriminative bureaucratic controls and cumbersome procedures that cause delays, corruption and inefficiency and hamper production on one hand distribution on the other. In this stupendous task role of mass communication namely advertising in its changed and matching form cannot be forgotten. 3.Growth of Media The advertising expenditure moved from 6,240 million rupees in 1986 to 34,800 million in 1994 where press media accounts for 58%, TV 18%, Radio 02%, cinema 02%, out-door 07%, video 9% and others 04%. Today the mass communication media like T.V. and radio cover 76.60% and 93% of area and 90.10% and 98% of population in case of TV and radio respectively. However, today, we are part and parcel of globalisation and are exposed to brands caused by changed and copied life styles all over the world. Today we are talking of Coke, Pizza, Hut, Kentucky Fried Chicken, Nike, Adidas and so on. This has been possible by unprecedented growth in science and technology that brought us satellite or sky communication straight into our houses and flats. We have Star, C.N.N., ATN, ASIA, ZEE, MTV, V TV to illustrate that have literally transformed the world into a global village. It is a village characterised by variety of hues, values and chromas, small fences and boundaries, wrangling and congenialities. The communication revolution forged by the developments in

electronics and spurred by the launching of space satellites has brought about an avalanche of change never expected in the history of mankind . 4. Professionalisation of Advertising The rapid growth of advertising industry has paved the way for its refinement and much desired professionalisation. It has not yet the full- fledged status of a profession but is moving faster towards that direction. Attempts are being made in India at present to start All India Institute of Advertising to impart the up-todate knowledge in the area of advertising. Already many executives and personnel of middle level management in advertising companies, advertising agencies, media owners have had their formal education and training in advanced countries and are applying their professional knowledge and training to Indian situation. Further, we have the associations of advertisers, advertising agencies and media owners to protect their interests and regulate their practices through codes of conduct with a view to create and maintain a definite image of Indian advertising industry. The economic growth of Japan during the latter-half of the last century, the interlinked economy of America, Europe and Japan-Popularly called as "Triad" and the recent success stories of Singapore, South Korea and Tiwan have created keen interest in globalisation. The globalisation process has far reaching impact on the strategy considerations of a company that wants to go global. It moves from micro or internal to macro or external environment making it facing global standards of quality, price and service. This needs deep professionalisation of every aspect of management to which advertising is not an exception.

5. Confessions of People Gone are the days of past when the general public used to dismiss advertising as something wasteful and unethical practice of cheating. With the full realisation of its socio-economic role, people of today have accepted advertising as a way of life. They know that advertising is instrumental in raising their standards of living, its tremendous capacity as an informer, educator, entertainer and a trend setter, its power of generating gainful employment opportunities and a tax reliever as it reduces public taxing by the government. It is seen more as an investment that assures decent returns than a mere recurring expenditure. Public acceptance has really created a fertile ground for its growth and flourishment. 6. It is an Agent of Rural Development Indian advertising has a special and definite role to play in rural development--a real challenge for we Indians. Advertising with its mass media has brought many consumer and industrial goods to the notice of rural masses. The things they never knew earlier are the common items of consumption pattern of these. In fact, advertising has changed the very life styles of these rural people. The major problem with the rural masses is that of clearing the barriers of communication. In this context, radio and television will play special constructive role in meeting their needs such as good seeds, fertilisers, information on better techniques and methods of farming, effective marketing methods, schemes of governments. It can work wonders in solving social and economic problems of rural population such as family planning, rural industrialisation, health programmes and the like.

Today, Indian advertising industry is preparing itself to welcome the new 21st century. With its vast potentials on one hand and self-regulation on the other, it is going to flourish in a big way. It will be welcomed as a profession with its impact on Indian cultures and sub-cultures. The greatest challenge of 21st century is fuel economy and in this direction it has already started teaching the people to conserve and research new sources of energy. Its growth is conditioned to a very great extent by the taxation policy of the Indian government. Advertising is no doubt a rich source of revenue for the government. However, this milking cow should not be made to starve. That is why it should grant special tax concessions for its self-growth and the growth of this creative advertising industry. At the same time, the Indian advertising industry should struggle hard to keep up its image through self-regulation than governmental intervention.

EXPECTATIONS FROM THE SECTOR There is a lot the advertising sector can do to help to promote sustainable development. The key requirements are that companies increase the number of truly sustainable innovations to promote, and consultants in the communications field as a whole put themselves in a situation to be able to give expert advice and to channel their creative professionalism into supporting advertisers, ventures. There are high expectations that both the client and agency sides of the sector are able to do this. The major client companies have acknowledged the need and the agencies are well used to becoming experts in a new field, as they have recently

had to do in the case of interactive communications. In categories where dynamic development is becoming less frequent, a new theme like sustainability presents opportunities to the first to establish leadership and threats to those who are slow in reacting. Governments must help ensure that effective self-regulation of advertising is in place everywhere and to progressively remove barriers to cross-border communications. Whether this requires harmonisation of laws that, this be done on the basis of least restriction as far as this is consistent with the need for actual consumer protection. As a sector it strongly felt to reject any suggestion that images of particular lifestyles should be withheld from some consumers, in order to artificially protect traditional lifestyles, or reduce envy and demand for improved living standards. This is immoral. On the other hand, we believe that advertising in general needs to respect sustainable aims and where commercially realistic to do so, should seek to promote those aims. Finally, governments should join the media and manufacturers in giving leadership and direction to consumers, to help us turn their sympathy into action.



1.1 Advertising -planning, implementation and control : Sandeep Sharma 1.2 Advertising: - C.N.Sontakki Page No: -489 1.3. Prescription for Advertising :Edmond A. Bruneau owner of Creative Consultants in Spokane, Washington, and the author of the book, 1.4 Relationship Marketing, in Emerging Perspectives in Services Marketing, Berry, L.L. (1983), 1.5 Megamarketing, Harvard Business Review, (March/April), 117-124. Kotler, P. (1986), 1.6 Adaptation and Relationship Building Process in the Peoples Kotler, P. (1992),


2.1 Initiative Media

:-Ashish Bhasin ,President, and head of all Media, Lowe Lintas

and Partners 2.2 The New Marketing: Developing Long-Term Interactive Relationships, Long Range Planning, 20 (4), 10-20. Gummesson, E. (1987), 2.3 Gummesson, E. (1991), Marketing-Orientation Revisited: The Crucial Role of the Part-Time Marketer, European Journal of Marketing, 25 (22), 60-75. 2.4 Service Encounters and Service Relationships: Implications for Research. Journal of Business Research, 20, 13-12. Czepiel, John A. (1990), 2.5. Based on an article that appeared in Media 1998 2.6 Relationship Quality in Services Selling: An Interpersonal Influence Perspective,

Journal of Marketing, Crosby, L.A., K.R. Evans, and D. Cowles (1990), 2.7 Marketing Strategies and Organization Structures for Service Firms, in Marketing of Services, J. Donnelly and W.R. Booms, B.H. and M.J. Bitner (1982), 2.8 Based on an article that appeared in Media International in 1996, June 2.9 Relationships Between Providers and Users of Market Research: The Role of Personal Trust. Cambridge, MA: Marketing Science Institue. Mooman, Christine, R. Deshpande, and G. Zaltman (1993), 2.10 Developing an Advertising Agency-Client Relationship in the Netherlands, Verbeke, W. (1988/1999), 2.11 Developing an Advertising Agency-client Relationship, Wackman, D.B., C.T. Salmon, and C.C. Salmon (1987), 2.12 Grayson, Kent and Tim Ambler (1999), The Dark Side of Long-Term Relationships in Marketing Services, Journal of Marketing Research, XXXVI (February), 132-141. 2.13 Arias, J.T.G. (1998), A Relationship Marketing Approach to Guanxi, European Journal of Marketing, 32 (1/2), 145-156. 2.14 Growing Interest, Emerging Perspectives, Journal of the Academy of Marketing Science, 23 (4), 236-245. 2.15 Dowling, G.R. (1994), Searching for a New Advertising Agency: A Client Perspective, International Journal of Advertising, 13, 229-242. 2.16 Hotz, M.R., J.K. Ryans, and W.L. Shanklin (1982), Agency/Client Relationships as Seen by Influential on Both Sides, Journal of Advertising, 11 (1). 2.17 Journal of Advertising Research, (December 1988/ January 1989), 19-27. 2.18 Journal of Advertising Research, (December 1986/January 1987), 21-28.

3.1. The Alaska Legal Resource Centre 3.2. World Commission on Environment and Development The Brundtland, Commission, 1987 3.3 United Kingdom Advertising Association study was published in the International Journal of Advertising, Vol. 17, No3, 1998 3.4. UNDP Human Development Report 3.5 Berry, G.L. Shostack, and G.D. Upah, eds. Chicago: American Marketing Association. & Berry, L.L. and A. Parasuraman (1991), Marketing Services-Competing Through 3.6 Clients Turn to Agencies for Guidance, But Also Look to Consultancies, (July 24). Media (1998),


4.1. B Sumangal; Illustration by Anup Singh 4.2 The Financial Express, January 8/The Economic Times, January 8/Advertising and Marketing, January 7/The Asian Age, January 5, 2003 4.3The Times of India, January 7, 2003 4.4 The Economic Times, March 27/The Financial Express, March 22/Brand Equity, March, 26/The Hindu, March 18/The Hindu Business Line, March 27, 2003 4.5 TrustA Foundation for Building Business, Managers Magazine, (June), 15-17. Harris, R.B. (1993), 4.6 Economic Times online :-Strategic choices of an advertising agency Dr.RanjanDas, Professor of Strategic & International Management, Indian Institute of

Management Calcutta, and Consulting Editor, Strategic Marketing. 4.7 Economic times online:- The Future of the Advertising Agency, By: Michaela S. Guzy 4.8 Times of India online:- Need for a one-stop media shop for meeting clients' communication needs Tapan Pal ,President, Zenith Communications.
4.9 Economic times online:-Employer-employees relationship in ADVERTISING agencies

Biju Joseph Dominic, Senior Brand Services Director, Lowe Lintas & Partners, Mumbai..
4.10Asian Advertising and Marketing (April 1996, April 1997, and March 1998).

4.11Cathay Pacific Wants Integrated Marekting Focus,

Advertising Age, (March). Geddes, A. (1993),

4.12 Quality. New York: Free Press. 4.13 Advertising Review, Asian Advertising and Marketing, (April 19). Bernas, M. (1996), 4.14 Total Marketing, Business Week Advance, Executive Brief, Vol. 2. Kotler, P. (1992),

5. Websites
5.1HTTP://WWW.WBCSD.ORG. 5.2http:.// 5.3

5.4 s/rules/1997/advercod.asp 5.5 5.6 Online.frontpage 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18



A. COMPANY INFORMATION Please provide your agencys name, address, internet URL, telephone and fax numbers. Include name, title, and E-mail address of the individual who will serve as agencys primary contact. 1) Name of your agency: -

B. OFFICES 1. Please list full-service agency offices/addresses, leading with the branch office that would service the account in question. 2. If the account in question is global, please list full-service foreign agency offices, indicating which are equity owned and which are affiliates. i) Corporate office address: -

3) Branch offices (If any): i)



: STD Code: No:- E-mail:- Website(URL):www.


out which is not applicable)











2. List responding offices current clients, indicating each clients tenure with agency. I) Name of client:Clients tenure with agency: - Years II) Name of client:-

Clients tenure with agency: - Years

III) Name of client:Clients tenure with agency: - Years IV) Name of client:Clients tenure with agency: - Years V) Name of client:Clients tenure with agency: - Years VII) Name of client:Clients tenure with agency: - Years VIII) Name of client:Clients tenure with agency: - Years IX) I) Name of client:Clients tenure with agency: - Years X) I) Name of client:Clients tenure with agency: - Years

3. List accounts responding office has gained over the past two years. Provide comment on why agency was chosen for these accounts. I) Name of client:-

Your Comments please:____________________________________________________________ ____________________________________________________________ ____________________ II) Name of client:Your Comments please:____________________________________________________________ ____________________________________________________________ ____________________ III) Name of client:Your Comments please:____________________________________________________________ ____________________________________________________________ ____________________ IV) Name of client:Your Comments please:____________________________________________________________ ____________________________________________________________ ____________________ 4. List accounts responding office has lost or resigned over the past two years. Provide comment on why agency lost or resigned these accounts. I) Name of client:Your Comments please:____________________________________________________________ ____________________________________________________________ ____________________ II) Name of client:-

Your Comments please:____________________________________________________________ ____________________________________________________________ ____________________ III) Name of client:Your Comments please:____________________________________________________________ ____________________________________________________________ ____________________ IV) Name of client:Your Comments please:____________________________________________________________ ____________________________________________________________ ____________________ 5) What has been the high point of the last year for your agency? ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ___________

6) Please list in order of preference three creative advertising agencies, excluding your own or any you currently hold a contract with, which you have most admired in the last twelve months. 1st choice: ______________________________ Why? _______________________________________________

2nd choice: ______________________________ Why? _______________________________________________ 3rd choice: ______________________________ Why? _______________________________________________

7) Please could you list the names of 15 of your own clients, and their contact details, that you would be happy to give for this study in order to conduct research for Client Satisfaction survey?

Name_____________________________ Company_________________________ Contact No:- Name_____________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:-

Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________

Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- Name______________________________ Company_________________________ Contact No:- 8) Please list in the order of preferences ten advertising agencies that you have most admired this year in the following regions: (please mark the preference number in the boxes) West region: ______________________________________ East region:


North region: _____________________________________ South region: ______________________________________

Central region: ______________________________________

9) In order of preference, please name three Managing Directors, CEOs etc, including yours or any individual you currently hold a contract with, who you admire. 1st choice Name: ______________________________________ Company: ________________________________________ Why? ____________________________________________________________ ________

2nd choice Name:______________________________________ Company: ________________________________________ Why? ____________________________________________________________ ____ 3rd choice Name:______________________________________ Company: ________________________________________

Why? ____________________________________________________________ _________ 10) In order of preference, please name 3 regional clients; excluding any you currently have business dealings with, which you feel deserve the title of Client of the Year. 1st choice Company: __________________________ Head of Marketing: __________________________________ Why? ____________________________________________________________ _________ 2nd choice Company: __________________________ Head of Marketing: __________________________________ Why? ____________________________________________________________ _________ 3rd choice Company: __________________________ Head of Marketing: __________________________________

Why? ____________________________________________________________ _________

D. BILLINGS 1. List billings for the past three years, including an estimate for the current year, for agency office that would handle account in question. 2. List total worldwide and Indian capitalised billings for entire agency for the past three years, including an estimate for the current year. 3. Provide percentage breakdown of the responding offices billings by media type (e.g., network TV, spot/cable TV, magazines, newspapers, radio, outdoor, direct, interactive, etc.).

In the calendar year of 2000

In the calendar year of 2001

In the calendar year of 2002

In the calendar year of 2003

I) Capitalised Billings a) Worldwide b) Indian II) Billings by media type a) Television

b) Print c) Other

E. STAFF 1. Provide a breakout of responding offices employees by function: account, creative, planning/research, media, other (please explain). ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ _________________________________________________________ 2. Provide brief biographies of key management executives in the responding office. ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________

F. SPECIALIZED SERVICES In no more than one page, describe your agencys capabilities in: 1. Direct Marketing ____________________________________________________________ ____________________________________________________________ ____________________________________________________________

____________________________________________________________ ______________________________________________________ 2. Public Relations ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ______________________________________________________ 3. Interactive ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ______________________________________________________ 4. Sales Promotion ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ______________________________________________________ 5. Event Marketing ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ______________________________________________________ 6. Yellow Pages ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ______________________________________________________ 7. Other (specify) ____________________________________________________________ ____________________________________________________________ ____________________________________________________________

____________________________________________________________ ______________________________________________________

G. COMPENSATION 1. Please describe your policy with respect to method of compensation (fee, commission, combination, etc.). ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ _______ II. SUBJECTIVE INFORMATION A. STRATEGIC APPROACH (If the space provided below is insufficient, a separate sheet may kindly be used) 1. Describe the process and methods agency employs to develop effective marketing communications. Provide examples of how this process has worked for clients. ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________

____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ________________________________ B. RELEVANT EXPERIENCE 1. Describe agencys relevant experience. ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ _____________________________________ 2. Provide at least two case histories dealing with similar or analogous issues. ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ________________________________________________________

3. Describe how agency is ideally suited to address the challenges and opportunities of the account in question. ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________

____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ __________________________

C. CREATIVE SAMPLES 1. Please provide samples of your creative work.

Any other comments please (If more space is required please enclose a separate sheet): ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ______________________________________________

Please make a copy of this completed questionnaire for your records. Thank you for your participation in this survey!


I. OBJECTIVE INFORMATION A) COMPANY INFORMATION Please provide your companys name, address, internet URL, telephone and fax numbers. Include name, title, and E-mail address of the individual who will serve as agencys primary contact. 1) Name of your company: -

B. OFFICES 1. Please list corporate /branch office addresses. i) Corporate office address:-

3) Branch offices (If any):i)



: STD Code: No: - E-mail: - Website (URL): in(strike out which is not applicable)








ADMIRED AD AGENCY: Please rate your agency on an overall level (taking all

aspects into consideration) using a scale of 1 to 10 (1 being least promising; 10 being most promising) (Please at the appropriate place) i) Quality of client servicing: including aspects like ensuring timelines, understanding and implementing strategies and team stability. 1 2 3 4 5 6 7 8 9 10

ii) Overall creative quality: Including developing new ideas, execution of ideas, keeping the creative on strategy.


iii) Account planning: Including aspects like consumer insights, using research for better insights, own initiatives on brand development, and value add on communication strategy. 1 2 3 4 5 6 7 8 9 10

iv) Overall Partnership: Optimising budget, long-term approach, keeping brand in focus. 1 2 3 4 5 6 7 8 9 10

v) Media: Including role in media planning, appreciating & understanding media strategy 1 2 3 4 5 6 7 8 9 10

vi) Market recognition: Winning awards, managing their PR. 1 2 3 4 5 6 7 8 9 10

vii) Overall organisation/people: Which included training and grooming talent, exposure to new learnings, variety of accounts handled, investment in better work environment, learnings from the parent company. 1 2 3 4 5 6 7 8 9 10

viii) Other aspects: Including smooth billing procedures, managing financial dealings with clients & efficient logistics. 1 2 3 4 5 6 7 8 9 10

(N.B: -The endorsements on the above factors will used to work out ad agency strengths and weaknesses) II) INTERNET ADVERTISING A) Please give your input on important new developments in online advertising. Rate the following from 1-5 (1 being least promising; 5 being most promising, please at the appropriate place) 1. ) In terms of what you see the greatest potential of the Internet as an advertising medium: Branding/Awareness Direct Response Promotional Activity One-to-One Marketing Reach 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5

2. Rate the following from 1-5 (1 being least problematic; 5 being most problematic) in terms of what you see as the greatest difficulties in clients adopting online advertising: Lack of Comprehensive Measurement 1 Cost Difficulty of Tracking Low Click-Through Rate Difficulty of Buying Banner Size 1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5

Low Commission for Media Buying 1 Lack of Good Creative 1

Any other comments please (If more space is required please enclose a separate sheet): ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ Please make a copy of this completed questionnaire for your records. Thank you for your participation in this survey!