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What trends in ad world tell us about shifting landscape of corporate India

A decade is a long time, especially in 21st century India. During the period, the Indian economy has more than quadrupled in size from $422 billion in 2001 to now nudging $2 trillion. This economic growth has manifested in many ways. India's GDP per capita has more than trebled from under $500 (Rs 26,869) in 2002 to now crossing $1,700 (Rs 91,356).

Expectedly, many old consumption categories like cars have grown - India produced 700,000 cars in 2002; today the number is nearing 2 million cars. Many new ones have emerged - mobile phone subscribers have grown rapidly from 5 million in 2001 to over 900 million today. The advertising industry is a good window to make sense of this change. Its messaging and campaigns capture the changes within the Indian society.

The bargain-hunting Lalitaji (in the Surf ad) has now evolved into a more emancipated mom who understands the importance of 'daags' (stains) in her naughty son's life. And this evolution tells us something about the journey Indian women and India at large has covered over the past decade. The ad industry and its top 10 advertisers also offer a good view into the shifts that corporate India has undergone.

Who are India's biggest advertisers? Which are the product categories that dominate advertising spend and which media are they spending money on? This change reveals the shifting landscape of corporate India.

"Contribution of services has grown and manufacturing has dipped in relative terms. That's the biggest change in the advertising world," says LV Krishnan, CEO, TAM Media Research. In 2001, services ranked ninth (on TV) and fifth (in print) among the top 10 super advertising categories. In 2012, it has jumped to first (print) and third (TV) in the list.

Here are some of the other significant shifts:

Interdependence of Media


At a macro level, TV has become the dominant media today at 42% (37% in 2005) of the total ad spends, newspapers have a shrinking share of the pie at 39% (49% in 2005) and digital media is growing rapidly - from 1% in 2005, today it attracts 6% of the total ad spend. Tarun Abhichandani, group business director, e-Tech Group, IMRB International, says it is important to remember that despite this shift, print is still growing in India at 11-12%.

What is also apparent is that more and more advertisers with a national footprint are tapping TV as a medium; and more local and regional ones are looking at print. Not surprisingly, the number of ads by the top 10 TV advertisers is relatively more concentrated than print. In 2012, the top 10 advertisers contributed 21% (the same as in 2001) of the total ads on TV but in print they contributed just 9% (14% in 2001) of the total. The data also reveals the rising correlation of one medium with the others.

"Earlier the three media were siloed. Today, the three are more interdependent," says Krishnan. For example, he explains, often TV channels use the print media to reach out to their audience. And digital media uses TV to popularise itself and communicate with its customers.

"There is lot of talk around print losing out and the euphoria around digital. But what the data analysis also reveals is that the three are often reinforcing each other," says Krishnan. Abhichandani adds that this is a reflection of the cross-media traversing that many consumers are doing today.

Social Ads Dominate


The shift to social is not all that surprising, considering the UPA government's focus on inclusive growth and social spending. Social advertisements - ads related to social campaigns so far largely dominated by the government - emerged as the dominant product category in both print and TV in 2012. In 2001, the auto industry (two-wheelers) dominated the product category in print and toilet soaps were No 1 on TV

As social responsibility initiatives of companies increase and the government tightens its spending, the private sector's contribution to social ad spends is expected to increase. So expect this category to maintain its presence at the top of the heap.

From Cola to Telecom Wars


A decade back, there were the cola wars - between Pepsi and Coke - that raged every summer with cheeky ad and marketing campaigns. Their rivalry continues but many other similar contests have emerged. The biggest battle is being fought in the telecom sector among service providers (like Airtel and Vodafone) and handset sellers (like Samsung, Nokia).

These two categories did not exist in 2001's top 10 (on TV); by 2005 they had showed up at No 4 and No 6, respectively; and, by 2012, they had moved up No 3 and No 4. "This change mirrors the enormous growth that the telecom industry has undergone over the last decade," says MA Parthasarathy, chief client officer, Mindshare.

FMCG Dominates, Durables Exit


Despite all the changes in India and India Inc, fast-moving consumer goods (FMCG) continues to lead the tables. Hindustan Unilever (HUL) remains the top advertiser in India, maintaining its ad share (by volume).

Procter & Gamble, Colgate Palmolive, Marico, Coca-Cola - among the top 10 ad spenders in 2001 - were in the top 10 list in 2012 too. But some old ones like Nestle, Godrej Consumer Products and Jyothy Laboratories, which figured in the top 10 list in 2001, dropped off the list last year.

There are new FMCG firms too like ITC and Cadbury (after the merger with Kraft Foods) that have muscled their way to the top.

"FMCG will always dominate in the ad world but given the visibility of the Indian telecom sector over the years, you would have expected FMCG's dominance to decline a bit. But primacy of FMCG tells you that eventually the big fight in India is still about those small everyday purchases that millions of Indians are making," says Santosh Desai, CEO, Future Brands.

Surprisingly, durables dropped out of top 10 categories in 2012. In 2001, it was at No 4 for TV and at No 2 for print. This means in relative terms ad campaigns for durable goods have declined.

"It tells you something about the quick penetration that the segment has achieved in India in a short span," says Desai.

Shifting Landscape of India Inc


The top advertiser list also reveals how corporate India has evolved over the last decade. One clear shift is from the unorganised to the organised sector. Many sectors like hospitals and clinics, jewellers, retailers and fast food joints - earlier dominated by the mom 'n' pop stores - are increasingly getting into the organised fold.

The entry of these segments in the top 10 list - Gitanjali Gems and online shopping portal Naaptol.com have emerged as the top two advertisers in print - signals that shift. The advertising world also reflects well the changing landscape of the corporate world. The last decade has seen a flurry of mergers (and break-ups) among both MNCs and Indian firms, which has had a ripple effect on the world of advertising.

For example, homegrown Paras Pharma (third biggest advertiser on TV in 2001) was acquired by Reckitt Benckiser (now third biggest advertiser on TV). And Hero Motocorp, without erstwhile partner Honda, is now the sixth largest advertiser in print - in 2001, the joint venture Hero Honda Motors was the second biggest advertiser in print.

Many Indian firms have forayed into new businesses and have reinvented themselves over the last decade. For example, cigarette company ITC is steadily steering away from tobacco into agri-businesses and FMCG. Its emergence as the fourth biggest TV advertiser in 2012 - it was missing in the top 10 in 2001 and even in 2005 - signals the shift.

Also interesting is that some product categories like writing instruments, washing power/liquids, aerated soft drink, and hair oils, which were in the top 10 in 2001, have dropped off the list in 2012. Replacing them in 2012 are new aspirational product categories like fairness creams and jewellery.