Advertising grows at a 10-yr high of 23%

New Delhi, Jan 18 | Updated: Jan 19 2007, 05:39am hrs
Some cheer for the advertising industry in India. After five years of lacklustre performance, the advertising industry in India has posted growth of 23.4% in 2006, according to data released by advertising and media monitoring agency TAM Media Research. This is the best the industry has seen in the last 10 years. The industry closed the year with Rs 16,300 crore in revenue against Rs 13,200 in 2005 (the figure stood at Rs 11,800 crore in 2004).

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The industry closed the year with Rs 16,300 crore in revenue against Rs 13,200 in 2005 (the figure stood at Rs 11,800 crore in 2004)
Radio, Internet and press have posted the fastest growth in ad revenue across media in 2006 with 58%, 52% and 24%, respectively
During the Diwali to Christmas festive period, consumer durables companies collectively spend to the tune of Rs 400 crore on advertising



In 2005, the growth rate stood at 14%, while in 2004, it was close to 13.7%. Radio, Internet and press have posted the fastest growth in ad revenue across media in 2006 with 58%, 52% and 24%, respectively.

This is basically a reflection of the fantastic phenomenon called sentiment, says Anand Halve, co-founder, chlorophyll brand and communications consultancy. Sentiment drives consumers and consumers drive the market. Consumer sentiment last year was at an all-time high as reflected by the surge in the stock market.

Several categories contributed to growth by loosening their purse strings quite early on. While sector-wise figures were not available, analysts say real estate, financial products and luxury items have contributed largely to this momentum. The annual issue of Elle magazine had 700 pages, of which 300 were devoted to jewellery ads, points out a marketing head with a Delhi-based media company. One indication of the immense potential of the luxury segment, he adds.

According to the sales head of a durables company based in Mumbai, only during the Diwali to Christmas festive period, consumer durables companies collectively spend to the tune of Rs 400 crore on advertising. The industry (across all product categories) expected a turnover of Rs 4,000 crore only in Mumbai. As if the consumer was saying this is the time of our lives; so spend it. Will the momentum continue The advertiser is a highly skittish animal. It will take one sector to collapse for the euphoria to go down the tube, says Halve. I would say this is symptomatic of the reality-avoidance syndrome demonstrated by the industry as a whole-we tend to over-react to both positive and negative vibes. Yet, overall, I am positive, sums up Halve.