A Doctoral thesis on “THE STUDY OF ADVERTISING AGENCY BUSINESS IN INDIA”- A STATUS REPORT”

―THE STUDY OF ADVERTISING

AGENCY BUSINESS IN INDIA‖

- A STATUS REPORT‖

A thesis Submitted to

AMRAVATI UNIVERSITY

For the award of Degree of

DOCTOR OF PHILOSOPHY

In the

FACULTY OF COMMERCE

RESEARCHER

M.A.BURGHATE

BE, MBA, SET

SUPERVISOR

DR. S. S. KAPTAN

MBA, Ph. D.

PROFESSOR AND HEAD,

P. G. T. D. OF BUSINESS ADMINISTRATION AND

MANAGEMENT,

AMRAVATI UNIVERSITY, AMRAVATI

____________________________________________________________

January -2004

CERTIFICATE

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

DECLARATION

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

ACKNOWLEDGEMENT

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

TABLE OF CONTENTS

PAGE

NO: -

CHAPTER NO: I ADVERTISING:

CONCEPTS AND APPLICATIONS

1-22

CHAPTER NO: II ROLE OF ADVERTISING IN

BUSINESS

23-87

CHAPTER NO: III ADVERTISING BUSINESS:

GROWTH IN INDIA

88-113

CHAPTER NO: IV ADVERTISING AGENCY:

STRUCTURE, NATURE AND TYPE

OF BUSINESS

114-161

CHAPTER NO: V RATIONALE OF THE STUDY 162-171

CHAPTER NO: VI A STATUS REPORT OF ADVERTISING

AGENCIES

172-213

CHAPTER NO: VII ADVERTISING AGENCY AND

CUSTOMER SERVICE

RELATIONSHIP

214-224

CHAPTER NO: IX FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS OF THE

STUDY

245-298

CHAPTER NO: X FUTURE: -

EMERGING TRENDS IN

ADVERTISING BUSINESS IN INDIA

299-323

BIBLIOGRAPHY

ANNEXURES

LIST OF TABLES

TABLE

NO.

PARTICULARS PAGE

NO.

Table 2.1 Evolution of worldwide advertising expenditures

from 1990 to 1999

47

Table 2.2 Distribution of total world advertising

expenditure by medium

48

Table 2.3 World Top 20 50-51

Table 2.4 Summary by continents 52

Table 2.5 Ad spend Totals in 1995/1996 /1997(in US$

millions) in Asia

53

Table 2.6 Latin America (USD million) 54

Table 2.7 People On-Line worldwide 55

Table 2.8 Online advertising revenue (in USD): 57

Table 2.9 The spread of advertising in the developed and

developing world

59

Table 2.10 Advertising as a percentage of GDP 62

Table 3.1 Vital Statistics: India 105

Table 3.2 India in Class Terms 106

Table 3.3 Indian Ad Scene 106

Table 3.4 Top ten advertiser during 2001-2002 109

LIST OF GRAPHS AND CHARTS

FIG., CHART,

GRAPH NO

PARTICULARS PAGE

NO.

Fig. -I

Schematic diagram of a general

communications system.

09

Bar Chart :-2.1 Evolution of worldwide advertising

expenditures from 1990 to 1999

48

Pie Chart No:-2.1 Distribution of total world advertising

expenditure by medium in the year 1990

49

Pie Chart No:-2.2 Distribution of total world advertising

expenditure by medium in the year 1999

49

Bar chart no:-2.2 People On-Line worldwide 2001

56

Bar Chart No:-2.3 Advertising on the Internet for year 2001 58

Bar Chart No-3.1 Top ten advertiser during 2001-2002 110

Flow Chart no:-4.1 Typical Structure of an Advertising Agency 116

Bar Chart No:- 6.1 Top Ten Advertising agencies in India 206

ABBREVIATIONS USED

ABBREVIATIONS FULL FORM

AAAA American Association of Advertising Agencies

AAAI Association of Advertising Agencies of India

ABCI Audit Bureau of Circulations of India

Ad Advertisement

ANA Association of National Advertisers

AOL America Online

ATM Automated teller Machine

BOB Bank of Baroda

CRM Consumer/Customer relationship Management

CRT Cathode ray tube

CSR Corporate social responsibility

CUTS Consumer Unity & Trust Society

Dpi Dots per inch

DVD Digital Video Disc

EASA European Advertising Standards Alliance

FMCG Fast moving consumer goods

GB Gega Bites

GDP Gross Domestic Product

IAA International Advertising Association

ICC International Chamber of Commerce

INS Indian Newspaper Society

ISO International Organisation for Standardisation

IT Information Technology

M&A‘s Mergers and Acquisitions

MB Mega bites

MNC‘s Multinational Corporations /Companies

MTNL Mahanagar Telcom Nigum Ltd

MZD Moorman, Zaltman, and Deshpande

NGO Non-government

O&M Ogilvy & Mather

ONGC Oil and Natural Gas Corporation

PC Personal Computer

RM Relationship Management

TAM Market Research Agency

TAP Total Audience Plan

TRP Television rating points

UNEP United Nations Environment Programme

USD United States Dollar

USP Unique Selling Proposition

VAT Value added tax

VFM Value for money

W Watts

WAP Wireless application Protocol

ZAW (Zentralverband der Deutschen Werbewirtschaft),

the German Advertising Federation

Creation of a constructive work is often driven by two

types of forces. One, which directs, assists the

artist by being physically 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

Prof. (Mrs) Sheetaltai Abasaheb

Burghate . An academician 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

CHAPTER NO: I

ADVERTISING:

CONCEPTS AND APPLICATIONS

Advertising is a synonym for consumer choice

‗If you can‘t tell people what you‘ve done, they‘re not likely to buy many of what

you‘ve made. So, you won‘t go on making them. You‘ll 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 you‘re not making so much, you don‘t have so much to tell

people. You don‘t 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 what‘s 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 N°39 – February 1996

Advertising – The link in the chain of supply and demand

by Sir Michael Perry, CBE, Chairman Unilever

CHAPTER NO: – I

ADVERTISING: - CONCEPTS AND APPLICATIONS

INTRODUCTION

1.1 BASICS OF ADVERTISING

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

1.2 ADVERTISING ACTIVITY

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 product‘s

availability and value. Advertising and promotion are basic activities in a

company‘s 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.

1.3 ADVERTISING AND THE COMMUNICATIONS PROCESS

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 Chevrolet‘s brand name for the Nova model, which decoded

into Spanish as No Va! – meaning,‖ it doesn‘t 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 Ma j o r Ins t i tu t io ns o f Ad v er t i s in g Man ag emen 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 advertiser-

agency 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

.

1.5 PRESENT SCENARIO

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 MNC‘s 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, sports-

oriented 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 marketer‘s 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 agent‘s 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.

CHAPTER NO: II

ROLE OF ADVERTISING IN

BUSINESS

‗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 Töpfer, 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 come‘3.3

. 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 sales-

related 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 one‘s 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 Töpfer, 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 Levi‘s 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

brand‘s ability to fit itself to one‘s 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 cost-

effectiveness 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 pay-

back 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 consumer‘s 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 and possible business opportunities arising from

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

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, product-

based 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 consumer-

purchasing 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 non-

governmental 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

In constant USD

Million

Compared

with 1990=100

1990 182,479 212,793 100

1991 184,366 206,328 97

1992 208,410 226,287 106

1993 198,163 209,033 98

1994 219,877 225,978 106

1995 245,337 245,337 115

1996 259,849 252,526 118

1997 267,810 254,331 119

1998 274,719 256,746 121

1999 290,139 265,452 124

Source: World Advertising Trends 2001, World Advertising Research Centre, A

division of NTC Publications Ltd

BAR CHART NO 2.1: -

EVOLUTION OF WORLDWIDE ADVERTISING EXPENDITURES

FROM 1990 TO 1999

0

50,000

100,000

150,000

200,000

250,000

300,000

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 Print TV Radio Cinema Outdoor

1990 55.6 31.7 7.6 0.3 4.7

1999 48.3 38.3 8.9 0.3 4.2

Source: World Advertising Trends 2001, World Advertising Research Centre, A

division of NTC Publications Ltd

PIE CHART NO:-I

DISTRIBUTION OF TOTAL WORLD ADVERTISING EXPENDITURE

BY MEDIUM IN THE YEAR 1990( IN %)

55.631.7

7.6 0.3 4.7

Print

TV

Radio

Cinema

Outdoor

PIE CHART NO:-II

DISTRIBUTION OF TOTAL WORLD ADVERTISING EXPENDITURE

BY MEDIUM IN THE YEAR 1999(IN %)

48.3

38.3

8.9 0.3 4.2

Print

TV

Radio

Cinema

Outdoor

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 1999 1990 1999/1990

United States 73,969 90,291 120,022 100 162

Japan 26,279 39,124 33,561 100 128

Germany 13,660 21,993 20,037 100 147

United

Kingdom 11,858 12,816 17,091 100 144

France* 9,296 10,137 9,665 100 104

Italy 6,373 5,185 7,092 100 111

Spain 4,423 4,717 5,315 100 120

Canada 4,868 4,153 5,055 100 104

Australia 3,805 4,386 4,734 100 124

Mexico 914 1,720 4,440 100 486

Brazil 2,295 4,966 4,354 100 190

China 423 1,687 4,158 100 982

Netherlands 2,342 3,444 3,884 100 166

Argentina 620 3,229 3,231 100 521

Hong Kong 863 1,954 3,049 100 353

South Korea 2,351 4,918 3,029 100 129

Russia N/A 376 2,921 100 N/A

Switzerland 2,372 2,923 2,611 100 110

Belgium 1,096 1,713 1,986 100 181

Austria 1,189 1,674 1,937 100 163

Total 168,996 221,406 258,172

* 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 1990 1995 1999 1999/1990

North

America

79,416 95,642 126,806 160

Europe 59,543 75,769 86,509 145

Asia Pacific 36,948 62,367 55,601 150

Latin America 5,469 12,006 17,011 311

Africa 740 1,759 1,844 249

Middle East 362 1,805 2,368 654

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 64,103 52,935 -17.4 47,730 -9.8

South Korea 6,525 6,739 3.3 3,204 -52.5

Hong Kong 1,953 2,195 12.4 2,637 20.1

Taiwan 1,937 1,813 -6.4 2,843 56.8

Thailand 1,522 1,861 22.3 987 -47.0

Indonesia 1,495 1,778 18.9 645 -63.7

India 1,215 1,305 7.4 1,353 3.7

Philippines 1,009 1,273 26.2 1,085 -14.8

China 842 1,199 42.4 3,698 208.4

Malaysia 821 804 -2.1 708 -11.9

Singapore 755 748 -0.9 782 4.5

Vietnam 62 103 66.1 111 7.8

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

Table2. 6: Latin America (USD million)

Indices

Country 1990 1995 1999 1999/1990

Mexico 914 1,720 4,440 486

Brazil 2,295 4,966 4,354 190

Argentina 620 3,229 3,231 521

Venezuela 439 922 1,386 316

Peru 178 N/A 896 503

Chile 240 622 580 242

Costa Rica 68 145 179 263

Honduras N/A 49 123 NA

Uruguay 61 137 161 264

Ecuador 145 101 76 52

Total 4,960 11,891 15,426 311

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 advertising‘s 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 5.3

, 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 4.15 million

Asia Pacific 143.99 million

Europe 154.63 million

Middle East 4.65 million

Canada and the United

States

180.68 million

Latin America 25.33 million

World total 513.41 million

BAR CHART NO:-2.2

PEOPLE ON-LINE WORLDWIDE (YEAR 2001)

0

50

100

150

200

250

300

350

400

450

500

550

600

In Million

Africa Asia PacificEurope Middle EastCanada and the United States Latin AmericaWorld total

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 0.10 billion

1996 0.39 billion

1997 0.94 billion

1998 1.90 billion

1999 3.00 billion

2000 4.4 billion

2001 5.80 billion

2002 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 USD10.5 billion

Europe USD2.8 billion

Asia USD1.2 billion

BAR CHART NO: - 2.3

ADVERTISING ON THE INTERNET FOR YEAR 2001

0

2

4

6

8

10

12

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

a % of GDP

Education as a %

of GDP

Total

advertising

expenditure

(USD billion) Columbia 2.6 3.4 1.4

United Kingdom 1.4 5.51 6.6

New Zealand 1.4 6.4 1.0

Hong Kong 1.4 2.8 2.2

South Korea 1.4 3.7 6.7

Venezuela 1.4 5.0 1.0

United States 1.3 5.4 101.2

Taiwan, China 1.2 NA 3.4

Brazil 1.2 NA 8.2

Australia 1.2 5.4 4.7

Source: UNDP Human Development Report, 1998

HOW LARGE IS THE ADVERTISING COMPONENT IN A PRODUCT‘S 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 product‘s 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 1990 1999 Some selected countries 1990 1999

United States 1.29 1.29 Colombia 1.27 1.77

Japan 0.88 0.77 Philippines 0.77 1.75

Germany 0.91 0.95 Costa Rica 1.19 1.59

United Kingdom 1.21 1.24 New Zealand 1.37 1.40

France 0.78 0.67 Peru 0.52 1.37

Italy 0.58 0.61 Venezuela 0.90 1 .33

Spain 0.90 0.89 South Africa 0.67 1.00

Canada 0.85 0.78 Oman 0.11 0.18

Australia 1.29 1.20 Saudi Arabia 0.13 0.24

Mexico 0.37 0.92 India 0.27 0.39

Brazil 0.50 0.89 Indonesia 0.33 0.50

China 0.11 0.42 Turkey 0.33 0.51

Netherlands 0.83 0.99 Qatar 0.15 0.28

Argentina 1.84 1.14 Jordan 0.17 0.45

Hong Kong 1.15 1.92 Uruguay 0.73 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 sector‘s 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 advertising‘s 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

nation‘s 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 advertising‘s 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 don’t 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

people‘s 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 didn‘t 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) 5.5

, 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 women‘s views and are reflecting derogatory male

clichés. 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 5.7

, 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. Children‘s

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 children‘s products.

Advertising is a part of a child‘s normal environment. It plays a part in the

child‘s development process by equipping children with the necessary

knowledge and skills to act as responsible consumers in later life. It is

everyone‘s responsibility, including advertisers, to help children familiarise

themselves, over time, with the world in which, as adults themselves, they will

live.

Advertisers believe that children‘s advertising must be responsible. It must not

misuse children‘s relative inexperience. It must recognise that children do not

mature at the same age and acquire consumer skills gradually. Children‘s

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 child‘s 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 self-

regulatory 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 counter-

productive.

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

company‘s 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 two-

way 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

people‘s 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.

THE CONTRIBUTION OF THE ADVERTISING SECTOR TO

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.

2.10 ENVIRONMENTAL DIMENSION

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.

CHAPTER NO: III

ADVERTISING BUSINESS:

GROWTH IN INDIA

‗It‘s unrealistic to think advertising will start a revolution. Advertising isn‘t 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

CHAPTER NO: - III

ADVERTISING BUSINESS: - GROWTH IN INDIA

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

THE EDICTS OF KING ASHOKA

THE FOURTEEN ROCK EDICTS

Ashoka's First Rock inscription at Girnar

AJANTA AND ELLORA CAVES

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).

& HINDUSTAN LEVER LTD (HLL) ‗DALDA‘

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? Let‘s 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 India‘s 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, India‘s national

language, across the country. Gone are the days when film prints were made in

14 different languages for exhibition in India‘s 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 world‘s 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 world-

class 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.

TABLE 3.1 - VITAL STATISTICS: INDIA

Population (Mn) 1040

Urban Population 26%

GNP (US $ BN) 271

Geographical Area 3.69 mn sq.km

States 25

Towns 3,768

Villages 5,80.702

TABLE 3.2 - INDIA IN CLASS TERMS

Westernised Elite 10 million

Indian Middle Class 280 million

The Silent Majority 500 million

The Very Poor 170 million

The Destitute 80 million

TABLE 3.3 - INDIAN AD SCENE

Total Media Expenditure Rs 8100 crores

(1999)

Press 60.2%

TV 30.6%

Outdoor 5.9%

Radio 3.0%

Cinema 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 2001-

02.

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).

TABLE 3.4: - TOP TEN ADVERTISERS DURING 2001-02

( R s L a k h ) A D V E R T I S I N G % CHANGE ADVERTISING TO SALES (%)

C O M P A N Y 0 1 - 0 2 0 0 - 0 1 0 1 - 0 2 0 0 - 0 1

HLL 82382 69658 18.3 7.51 6.57

Colgate-

Palmolive

23099 21395 8.0 20.75 19.06

ITC 18009 18332 -1.8 3.56 4.36

Dabur India 15445 14607 5.7 13.99 13.18

Nestle India 15427 12846 20.1 8.47 8.12

Bajaj Auto 11552 12990 -11.1 3.21 4.31

McDowell 11359 10807 5.1 13.53 13.17

Mahindra &

Mahindra

9325 7962 17.1 2.90 2.27

Reckitt

Benckiser

9066 6101 48.6 16.48 11.12

Britannia

Industries

9063 8529 6.27 6.48 6.66

TOTAL (250) 440520 421081 4.6 2.43 2.44

Source: - http://www.responservice.com/archives/jan2003_issue1/media/agencies.htm

BAR CHART NO-3.1

TOP TEN ADVERTISERS DURING 2001-02

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

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 MNC‘s 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%.

CHAPTER NO: IV

ADVERTISING AGENCY:

STRUCTURE, NATURE AND TYPE

OF BUSINESS

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.

CHAPTER NO –IV

ADVERTISING AGENCY: STRUCTURE, DIVISIONS

AND FUNCTIONS

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.

FLOW CHART NO: -4.1

TYPICAL STRUCTURE OF AN ADVERTISING AGENCY

4.1.1 ADVERTISING AGENCY SET-UP

I) WORK

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

Traffic Dept.

Writers, Art Directors,Producers

Creative Director

Account Executives

Account Supervisors

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

Media Estimators

Media Planners,Media Buyers

Media Director

President

Board of Dircetor /Management

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.

IV) MEDIA DEPARTMENT

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 full-

time 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.

4.3 TYPES OF ADVERTISING

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 company‘s 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 manufacturer‘s 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.

4.4 TOOLS OFFERED BY ADVERTISING AGENCY

INTRODUCTION

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, high-

tech 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. Newspapers usually are read once and stay in the house for just a day.

2. 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. The ad has to compete with other ads for the reader's attention.

5. 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

didn‘t 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. it‘s better to advertise when people are listening than when they are not.

2. it‘s 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 two-

week 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.

4. 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. The number of viewers who watch the program.

2. 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 customer‘s

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 "top-

of-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 pull-

down 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 rediff.com

HOME NEWS BUSINESS CRICKET RADIO MOVIES SPORTS NET

GUIDE SHOPPING BLOGS ASTROLOGY

MATCHM

AKER

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-II

Banner Size : 468*60 Banner Weight : Max 16k.

Banner-III

Banner Size : 125*500 Banner Weight : Max 18k.

HOME NEWS BUSINESS CRICKET RADIO MOVIES SPORTS

CHAPTER NO: V

RATIONALE OF THE STUDY

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

isn‘t advertising... What nonsense. Of course, social advertising, public service

advertising – whether it‘s 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. It‘s come a long way from the gaudy poster

proclaiming the presence of Sunlight Soap. It‘s part of the social fabric of all our

lives which, cosmetically, would be a good bit duller without it. More to the point,

it‘s 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 N°39 – February 1996

Advertising – The link in the chain of supply and demand

by Sir Michael Perry, CBE, Chairman Unilever

CHAPTER NO: - V

RATIONALE OF THE STUDY

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

MNC‘s 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 vice-

versa. 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”.

5.2.4 RESEARCH DESIGN

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 56

Advertiser 42

Total 98

.2.5 TOOLS OF DATA COLLECTION: -

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.

CHAPTER NO: VI

A STATUS REPORT OF ADVERTISING

AGENCIES

‗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

CHAPTER NO: VI

A STATUS REPORT OF ADVERTISING AGENCIES

6.1 INDIAN ADVERTISING AGENCIES: - A PROFILE

INTRODUCTION

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: [email protected]

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: [email protected], [email protected]

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: [email protected]

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: [email protected]

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: [email protected], [email protected]

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: [email protected]

URL: www.crayonad.com

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: [email protected] , www.creativeunit.com

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: [email protected]

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: www.eurorscgindia.com

Capitalised billings: Rs. 1521.69 million,Television billings: Rs. 391.80 million

Senior Executive: Ishan Raina, Chairman-CEO

Major Clients: HDFC Securities (HDFCinvest.com/website); Pacific Online

(portals); Rolta (roltanet.com/ISP); 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: [email protected]

URL: www.eicl.net

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: [email protected]

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); Coca-

Cola 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: [email protected]

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: [email protected], www.fountainheadindia.com

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: [email protected]

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: [email protected]

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: [email protected]

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: [email protected]

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: [email protected]

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: [email protected]

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: [email protected]

URL:www.imageadsgroup.com

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: [email protected]

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: [email protected]

URL: www.mudra.com

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: [email protected]

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: [email protected]

URL: maabozell.co.in

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: [email protected]

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: [email protected], [email protected]

URL: www.allindia.com-mca

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: [email protected]

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: [email protected]

URL: www.marketmissionaires.com

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 - two-

wheelers); 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: [email protected]

URL: www.adpundits.com

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

E-mail:[email protected]

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: [email protected]

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: [email protected]

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/G-

sec); 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: [email protected]

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: [email protected]

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: [email protected]

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: [email protected], [email protected]

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: [email protected]

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: [email protected]

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: [email protected]

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: [email protected]

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

oil);

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: [email protected]

URL: www.sasiads.com

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: [email protected]

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: [email protected], www.trotoncom.com

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: [email protected]

URL: www.tbwa-anthem.com

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: [email protected]

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: [email protected], www.urja.com

Capitalised billings: Rs 141.61million, Television billings: N.A.

Senior Executive: Prakash Sharma , Director

Major Clients: Aptech Ltd(Online Varsity.com, BconnectB.com/portals); CRISIL

(Crisil.com/equit 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. URL:www.aplindia.com

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)

6.2 TOP TEN ADVERTISING AGENCY IN THE YEAR 1990

All figures in Rs'000s.

Top 10 Agencies (India) 90 G I in Rs

1. Hindustan Thompson Associates 490545

2. Lintas: India 391050

3. Mudra Communications 251325

4. Ogilvy & Mather 204030

5. Everest Advertising 177345

6. Ulka Advertising 161550

7. R.K. Suwamy 122940

8. Clarion Advertising 119340

9. Contract Advertising 104445

10. Chaitra Advertising 97110

Total G I 2119680

Note:-

GI: Gross Income

TABLE NO 6.3 :- TOP TEN ADVERTISING AGENCY IN THE YEAR 1991

All figures in Rs'000s.

Top 10 Agencies (India)91 G I in Rs

1. Hindustan Thompson Associates 453060

2. Lintas:India 407700

3. Mudra Com. 226440

4. Ogilvy & Mather 217260

5. Ulka Advertising 184320

6. R.K. Swamy/BBDO 161820

7. Everest Advertising 129960

8. Chaitra Advertising 100845

9. Clarion Advertising 99810

10. Contact Advertising 91890

Total G I 2073105

Note:-

GI: Gross Income

TABLE NO 6.4 :- TOP TEN ADVERTISING AGENCY IN THE YEAR 1992

All figures in Rs'000s.

Top 10 Agencies (India)92 G I in Rs

1. Lintas:India 493290

2. Hindusia Thompson Associates 471375

3. Mudra Communications 215010

4. Ogilvy & Mather 213345

5. R.K. Swamy/BBDO 197775

6. Ulka Advertising 156060

7. Clarion Advertising Services 114480

8. Trikaya Grey 98505

9. Contract Advertising 98370

10. Everest Advertising 83295

Total G I 2141505

Note:-

GI: Gross Income

TABLE NO 6.5 :- TOP TEN ADVERTISING AGENCY IN THE YEAR 1993

All figures in Rs'000s.

Top 10 Agencies (India)93 G I in Rs

1. Hindustan Thompson Associates 599940

2. Lintas India 517995

3. Ogilvy & Mather 257355

4. Ulka Advertising 203085

5. Contract Advertising 128610

6. R.K. Swamy/BBDO 126270

7. Trikaya Grey 125955

8. Rediffusion advertising 115740

9. BSB India 84375

10. Everest Advertising 82980

Total G I Rs 2242305

Note:-

GI: Gross Income

TABLE NO 6.6:- TOP TEN ADVERTISING AGENCY IN THE YEAR 1994

All figures in Rs'000s.

Top 10 Agencies (India 94) G I in Rs

1. Hindustan Thompson Associates, 780795

2. Lintas India 619650

3. Mudra Communications, Ahmedabad 427005

4. Ogilvy & Mather, Mumbai 354600

5. Ulka Advertising (Euro RSCG), 273195

6. Contract Advertising, Mumbai 186660

7. Chiatra Leo Burnett, Mumbai 147510

8. Rediffusion Com., Mumbai 147195

9. Triksya Grey, Mumbai 144045

10. R.K. Swamy/BBDO Adv., 133020

Total G I 3213675

Note:-

GI: Gross Income

TABLE NO 6.7 :- TOP TEN ADVERTISING AGENCY IN THE YEAR 1995

All figures in Rs'000s.

Top 10 Agencies (India) 95 G I in Rs

1.Hindutan Thompson Associates, 1118070

2. Ammirati Puris Lintas, India, 740295

3. Mudra Communications (DDBN), 570195

4. Ogilvy & Mather, Mumbai 501750

5. Ulka Advertising (JWT), Mumbai 378450

6.Contract Advertising, (JWT), 308790

7. Trikaya Grey, Mumbai 275760

8. R.K. Swamy/BBDO Advertising, 264150

9. MAA Group (Bozell), Bangalore 231705

10. Redivvusion-Dentus, Young & Rebicum 207225

Total G I 4596390

Note:-

GI: Gross Income

TABLE NO 6.8:- TOP 20 AGENCIES IN INDIA (YEAR 2002-2003)

(BASED ON PRIMARY DATA)

AGENCY CAPITALISED BILLINGS

(IN MILLION RS)

Hindustan Thompson Associates

Capitalised billings: Rs 10,777.05

Ogilvy & Mather Ltd

Capitalised billings: Rs 7425.78

FCB-Ulka Advertising Ltd

Capitalised billings: Rs 5215

Rediffusion-DY&R

Capitalised billings: Rs 4431.69

McCann-Erickson India Ltd

Capitalised billings: Rs 3479.53

Lintas India Ltd

Capitalised billings: Rs 2930.00

RK Swamy/BBDO Advertising Ltd

Capitalised billings: Rs 2315.95

Trikaya Grey Advertising (India)

Ltd

Capitalised billings: Rs 2208.00

Chaitra Leo Burnett Pvt Ltd

Capitalised billings: Rs 1967.21

Pressamn Advertising and

Marketing Ltd

Capitalised billings: Rs 1872.74

Contract Advertising

(India) Ltd

Capitalised billings: Rs 1786.88

MAA Bozell Communications

Ltd

Capitalised billings: Rs 1753.80,

IB&W

Capitalised billings: Rs 1657.66

Enterprise Nexus

Communications Pvt. Ltd

Capitalised billings: Rs 1587.48

Euro RSCG Advertising Pvt Ltd

Capitalised billings: Rs. 1521.69

Triton Communications Pvt Ltd Capitalised billings: Rs 1301.90

Percept Advertising Ltd Capitalised billings: Rs 1098.76

Ambience D'arcy

Capitalised billings: Rs 1014.00

Saatchi & Saatchi Pvt Ltd Capitalised billings Rs 937.54

BAR CHART NO: - 6.1

TOP TEN ADVERTISING AGENCIES IN INDIA

0

2000

4000

6000

8000

10000

12000

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

6.3 INDIAN 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 belt-

tightening 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

AVERAGE DURATION

OF

TV SPOTS (seconds)

1994 25.5

1995 24.9

1996 23.8

1997 23.5

1998 22.3

1999 21.7

2000 21.7

2001 20.4

2002 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 McCann-

Erickson 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.

AGENCY ABBY

GOLD

ABBY

SILVER

SPECIAL

ABBY

GOLD

SPECIAL

ABBY

SILVER

POINTS

Ogilvy &

Mather India 2 16 0 4 28

McCann-

Erickson India 1 1 1 0 7

Enterprise

Nexus 0 6 0 0 6

Mudra

Communications 0 6 0 0 6

Leo Burnett 0 5 0 0 5

India

Publicis

Ambience 0 5 0 0 5

Quadrant

Communications 0 5 0 0 5

Virtual

Marketing India 2 0 0 0 4

Rediffusion-

DY&R 0 4 0 0 4

Contract

Advertising 1 1 0 0 3

Euro RSCG

India 0 3 0 0 3

Saatchi &

Saatchi 1 0 0 0 2

Lemon 0 2 0 0 2

Alok Nanda &

Co 0 1 0 0 1

Apocalypso

Filmworks 0 1 0 0 1

Channel [V] 0 1 0 0 1

D'Zine Garage 0 1 0 0 1

Mediaturf

Worldwide 0 1 0 0 1

TBWA\Anthem 0 1 0 0 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

CHAPTER NO: VII

ADVERTISING AGENCY AND

CUSTOMER SERVICE

RELATIONSHIP

‗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

CHAPTER NO: -VII

ADVERTISING AGENCY AND CUSTOMER SERVICE

RELATIONSHIP

7.1 EVOLVING EQUATIONS: ANALYSING THE CLIENT-AGENCY-

MEDIA 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 agency‘s 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 agency‘s 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

consumer‘s 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 client-

agency 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 don‘t 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

7.2 RELATIONSHIP MARKETING AND ITS IMPACT ON THE

ADVERTISER-AGENCY RELATIONSHIP

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 Berry‘s (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 2.7

. 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 Sasser‘s 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. 2.4

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 cost-

efficient 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 agency‘s service. Therefore, agencies have to restructure

themselves to meet the requirement of their clients in order to maintain the

client‘s. 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.

CHAPTER NO: VIII

FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS OF THE

STUDY

‗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

CHAPTER NO: VIII

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

OF THE STUDY

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

II) EMPLOYER-EMPLOYEES RELATIONSHIP IN ADVERTISING

AGENCIES

III) NEED FOR A ONE-STOP MEDIA SHOP FOR MEETING CLIENTS'

COMMUNICATION NEEDS

IV) THE REVOLUTION IN INFORMATION TECHNOLOGY AND ITS

IMPLICATIONS ON ADVERTISING AGENCIES

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. Let‘s 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, dot.com, 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 100-

odd 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, dot.com, health care, insurance

etc.) and underlying capabilities to serve such areas, competitors‘ existing and

future offerings, agency‘s 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 micro-

segmentation, 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 agency‘s 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 agency‘s remuneration structure, on a proactive basis, to

certain accountability format. This will communicate seriousness,

professionalism and sensitivity to a client‘s 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 agency‘s

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 agency‘s 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-à-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 industry‘s 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

advertiser‘s 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 delivery-

quality, 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 individual‘s and organization‘s 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 fast-

changing 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 client‘s 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 doesn‘t

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 fast-

forwarded 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 network‘s learning‘s 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 client‘s 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 homemaker‘s. 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

managers, identified and validated the required frequency levels.

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.

IV) THE REVOLUTION IN INFORMATION TECHNOLOGY AND ITS

IMPLICATIONS ON ADVERTISING AGENCIES

Expert opinion

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 company‘s

advertising budget has remained almost stagnant for the last one to two years.

According to Ravi Negi, media manager, Grey Worldwide, Oracle‘s 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 LG‘s IT product range also points

towards a similar trend. The company‘s 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, i-

flex 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 client‘s service

or product?‖ With regard to the technological advancements—interactive

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 ad‘s 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 agency‘s 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 Hewlett-

Packard 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.

HEWLETT PACKARD PHOTO SMART 912 DIGITAL CAMERA

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 it‘s 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 agency‘s 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-Packard‘s 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-

Packard‘s 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-Packard‘s latest release, the e-printer e20 is capable of printing web-

sites, 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

screen. 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 HP‘s 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 Internet‘s earliest banner ads,‖ (Riedman,

106). With the introduction of Flash, which is Macromedia‘s 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 client‘s 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

Macromedia‘s 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

else‘s 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, ‗You‘re only a

block from a Starbuck‘s; 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, ―…you‘ll tell, for the free oil change you‘re 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 oil-

change 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

you…They‘ll 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 client‘s 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 client‘s advertising and

measure the results of the agency‘s campaign. The networks are a wonderful

resource for ad agencies, especially the smaller ones. The top ad networks,

which were introduced in the early 1990‘s 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, there‘s no cost for you at first. You don‘t have to

build a sales force, you automatically get reps all over the country.‖ Gluck also

mentions the targeting is an ad network‘s specialty, ―If you‘re selling dog food,

for instance, you can run your ad on a dog lover‘s site, or iVillage‘s 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 don‘t

replace traditional agencies, they work with them, taking the creative- the actual

ad-and placing it on web-sites appropriate to the advertiser‘s 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 what‘s already been achieved, to

interactive opportunities such as event sponsorships, interactive applications,

contacts, promotions, and games,‖ . The fast food chain Wendy‘s is sponsoring

the ―Find the Next Great Hamburger Song Contest,‖ where aspiring food fans

upload their songs to RollingStone.com 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 CBS‘s Late Late Show with Craig Kilborn, (Gardner, 1).

Wendy's song contest is a perfect example of Lehman‘s theory of interactive

promotions building brand awareness.

Communication giants have altered the way in which a traditional advertising

agency budgets itself. Microsoft‘s 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, ―It‘s 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 account‘s 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.‖ Coca-

Cola, 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-line…Coke 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. Coke‘s account

executives suggested that the company support AOL‘s Moviefone brand through

promotions. Additional advertising included Coke‘s sponsorship of the 2000

Olympic Games. Coke‘s 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

eRating.com. 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 it‘s

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-3‘s which became

widely spread less than two years ago, have already been replaced with G-4‘s.

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 dot.com

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 Indian-

based 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 country‘s

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.

WHAT THE ADVERTISING SECTOR CAN DO FOR

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.

WHAT THE ADVERTISING SECTOR CAN‘T DO FOR

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 risqué 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.

CHAPTER NO: IX

FUTURE: -

EMERGING TRENDS IN

ADVERTISING BUSINESS IN INDIA

‗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

CHAPTER NO-IX

FUTURE: - EMERGING TRENDS AND DEVELOPMENTS

IN ADVERTISING BUSINESS IN INDIA

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 today‘s 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 people‘s 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 channel‘s 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 self-

regulation 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 don‘t 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 cost-

effective, 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 mass-

communication. 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

5.1 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 socio-

economic, 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-to-

date 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