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Ad spend on telecom, auto, financial services to spur growth

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Ad spend on telecom, auto, financial services to spur growth

The Rs 12,000 crore Indian advertising industry is poised for healthy growth in 2005 as ad spend is likely to go up in key sectors such as telecom, financial services, automotives, entertainment, media and retail.

“With the economy looking up, the Indian ad industry is expected to register 12-15% growth in 2005. Ad spend will surely increase due to high-growth sectors like insurance and telecom,” says an industry analyst. The key for effective advertising is going to be the ability to provide seamless integrated communication to clients.

According to FCB-Ulka Advertising executive director MG Parameswaran, the ad industry grew by 10-12% in 2004. “In the year 2005, I would expect it to grow at this rate given new growth segments such as telecom, financial services and retail,” he reasoned.

Sharing Mr Parameswaran’s positive outlook, Madison Communications managing director Sam Balsara said the year 2004 had been a good year for advertising and he expects that 2005 will be even better.

“Industry seems to be optimistic and that augurs well for advertising. In 2005, the ad industry will grow by 12% over last year,” he said.

The optimism on the growth front seems to be shared by most ad pundits. With increasing competition and economic recovery, the demand for advertising will increase in the new year, predicts Rediffusion DY&R president Preet Bedi. “I think companies such as oil majors, entertainment, media, banks and insurance companies will increase their ad budgets to stand out in the clutter. As for strategy, ad men should focus on ideas beyond Indianness,” he said.

According to Madison Media Research Centre’s estimates, the ad industry registered 9-10% growth in 2004 as compared to the previous year.

As per the centre’s predictions for 2005, the industry is expected to grow by 12% in 2005.

Ranjan Kapur, country manager of WPP Group in India also sees a bright future for the industry and expects it to clock double-digit growth of around 12-15% in 2005. “After a three-year lull, the ad industry is poised for growth once again,” he said.

Echoing similar views, Ogilvy & Mather India group president & national creative director Piyush Pandey said the new year will be better and brighter as compared to last year.

“Advertisers in telecom, retail, automotive and financial services sectors will spend more money on advertising. In the highly competitive advertising industry, creativity in any form will work well in the Indian market place,” explained Mr Pandey.

TBWA Anthem director Kurien Mathews predicts the ad industry would see continued and sustained growth like in 2004.

On future trends, Mr Kurien said there will be more account shifts than there were in 2004.

“I hope the will be a quantum leap in the quality of work though, like we saw in the late 1990s. Spends will be under less pressure than we have seen in 2002 and 2003 as long as we sustain current GDP growth rates and stock market sentiment remains as buoyant as it is today,” he added.

With growth, of course, there will be increased competition. As Mr Mathews puts it, “There will be pressure for the industry to perform like never before. New brands/MNCs entering India will further boost spends,” he said.


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