Advantage advertising

Updated: Jan 22 2007, 05:30am hrs
The Indian advertising industry has good news to report, and even better news to leave lying in the public domain. First, the report. Advertising revenues in India, as measured by TAM Media Research, leapt 23.4% to scale a figure of Rs 16,300 crore in 2006. This may not match the frenzied figures seen in the early to mid-1990s, with growth peaking at a little more than twice 2006s rate, but it is still perhaps the most robust figure for the past decade. Even in 2004 and 2005, by when the consumer market recovery was well underway, advertising was lucky to log growth in double digits. The industry just about managed to squeak into the low teens in those two years: 13.7% in 2004 and 14% in 2005, according to TAM data. Given this record of underperformance, 2006s report should set Champagne bottles popping all over town. It would be a celebration long overdue. In most economies around the world, according to observations made by global communications conglomerate WPP, the advertising business tends to grow at twice the GDP rate at least. By this, the previous years have been particularly sullenand 2006 has been terrific.

And that brings us to the even better news. The fact that the growth rate has broken the twice-GDP rate pattern may well be indicative of two trends, supported by anecdotal evidence. One, it may be a sign of a return to expansionary market strategies after a long, long time. After years of letting advertising fulfill primary sales maintenance objectives, companies have started assigning it the more challenging tasks of selling fresh concepts and enticing new users. Such approaches that see advertising as an investment (in the ownership of space in the consumers mind) always warrant larger spending. The other trend is India Incs gradual shift back from below-the-line tactics, which had gained traction in the late 1990s. Direct-contact campaigns and on-location brand hoopla tend to generate sales. But only as desperate measures aimed at quarterly targets. The most influential messages, the ones that secure the consumers favour for a lifetime, are often those that are left out there in the public domain for the appreciation of any random-body they interest. A little like art.