- Big brands are growing at 10.6% against small brands growing almost double the rate 18.5%
- In 10 years Ad Ex egisterd 12% CAG by increasing from about 20,000 Cr to 60,000 Cr
- Advertising as a percent of our GDP is still only 0.35% against the global average of 1%
- Biggest 50 brands account for 60% of the market while smaller brands account for 21%.
- Local and Regional advertisers are very strong in their local areas and command a high loyalty.
- Santoor became India’s largest selling soap brands using regional focused strategy.
Chennai: On 15th July, 2019, Chennai saw IndiAA Awards Tamil organized by IAA in partnership with Medianews4u.com and TAM Media. The prestigious awards night was inaugurated by a key note address by Industry veteran, Sam Balsara, who actually needs no introduction.
The key note address was about the opportunities and challenges for brands in the ever evolving times as today.
Starting the key note address, Sam Balsara said “It’s true that the world is changing very fast, and the pace of change is increasing with every passing day. Also, the fact is, whether we like it or not, our consumer and his behaviour, eating habits, dressing habits, media usage habits, social interaction habits, work habits, are all changing at a much faster pace than we in advertising are able to respond to.”
“Of course, the most major change that has enveloped in the advertising world some years ago and has now taken over India, is digital.”
Sharing interesting comparison of digital spends from what they used to be 10 years ago to what they will be by the end of this year, Balsara said, “Digital advertising, which was just 4% of the advertising market in India 10 years ago, is now 19% and is projected to be 22% by end of this year. The arrival of digital to a considerable extent, has changed the complexion of the advertising industry.”
“Print”, he jokingly said, “which is everybody’s favourite, has lost 9% share points in the Ad Ex, and TV, much less than 4% points.”
Giving the audience a progress report on the AdEx of the Indian Advertising Industry, Balsara said, “It is thanks to the fact that because our advertising market, or Ad Ex, as we call it, has grown very well over the last 10 years, that no individual medium has felt the pinch of this change in market share. Because In fact, all mediums are growing, all be it at different levels of growth of ad ex, you’d be happy to know has tripled in 10 years, from about 20,000 Cr To 60,000 Cr registering for 12% compounded annual growth.”
“The future of advertising in India is extremely bright.” Balsara continued by saying, “Advertising as a percent of our GDP is still only 0.35% whereas the global average is close to 1%. Our GDP expected to grow by 7% to 8% in the near future. And if you were to believe our Prime Minister, India becoming a $17 trillion economy. The percentage contribution of advertising to GDP is also expected to grow as competition in the Indian market.”
Acknowledging the fact that it indeed is difficult times for marketers and advertisers, Balsara said, “I must say though, that for marketers, advertisers and our clients, It is becoming tougher. In the last 10 years TV has added 3000 new advertisers and print has added as many as 80,000. And there is no record of how many digital as I did. I’m sure the number is actually much higher than even print.”
Continuing, Balsara said, “There is a democratization of brands and brand owners that is taking place in the market. Only a few large advertisers used to dominate at once upon a time. But today, it is not the case. 10 years ago, the top 50 advertisers accounted for as much as 43% of Ad Ex. Today, the top 50 account for only 35% and I’m sure this number is going to go down quite rapidly over the next decades. Which brings me to the big opportunity that I see that exists for regional and local brands in different parts of our country.”
Sam Balsara shared the invaluable advice he keeps giving to large advertisers and said, “My advice to large advertisers for over decades hasbeen to not ignore local and regional advertisers, who are very strong in their local areas and command a high loyalty with the new generation of promoters taking control of the legacy businesses are slowly expanding the geographical coverage of such brands.”
On the difference in the growth percentage of national brands versus regional brands, Balsara said, “You’d be interested to know that the biggest 50 brands account for 60%of the market for a smaller brands account for 21%.But that is not what I want to tell you.Nielsen which records a1d tracks all brands tells me that big brands are growing at 10.6%.But small brands are growing at almost double the rate 18.5%.”
“For those of you with an entrepreneurial spirit, The time to launch a new brand is now or to invest more in your existing brands to grow them is now, given that India is such a large country and so diverse.In a large country like India it is important to have as much knowledge of consumer habits, consumer understanding of markets in states or district as possible.”
Talking about the advantage local brands have over national brands, Balsara said, “And this is where local brands have a huge advantage. I believe, they should not give up this advantage,but capitalize on it and slowly grow their geographical presence. Using a regional strategy over the years, and focusing on each state slowly over 20 years, Santoor has become arguably India’s largest selling soap major brands.”
