Articles

Transparency more important than ever for Indian advertising market

Terry Edwards, Media Partner 

Terry Edwards, Media Partner at FirmDecisions, welcomes the serious attention that advertisers in the Indian market are starting to pay to media transparency.

There was a sense of excitement and anticipation in the Salon Dubarry of the Sofitel Hotel, Mumbai, last month. The expectant audience was awaiting the arrival of the latest and dynamic export from England. But this wasn’t 1D. It was FD.

The FirmDecisions team of contract compliance specialists had been invited to talk to nearly three dozen members of the Indian Society of Advertisers (ISA) on “transparency – prescriptions, principles and processes”. The meeting brought together some of the biggest spenders and most progressive marketers in the growing Indian advertising market, keen to throw light on media trading incentives that exist between their appointed advisors and publishers.

We found that many advertisers in the Indian market are already aware of most – but not all – of the issues relating to transparency as they affect media buying. As this market becomes ever-more digital, advertisers are getting the message that it’s more important than ever to ensure that they get the clarity they want from their agency partners. The issues in India – from rebates to the growth in inventory media – are either already common to or “coming soon” to this market, too.

From our recent work in India, we have found that there is perhaps more trust given here by advertisers to their agencies than in some other markets, and with trust comes responsibility. We help advertisers to validate and verify that they’re getting the services they pay for, not to mention any rebates they’re due. Transparency covers not just leading media buying agencies, but also digital, mobile, data-driven advertising, and print. What’s more, even though we are working with local marketers and respect local levels of trust between agencies and advertisers, for bigger, global brands, levels of transparency are often set by global contracts. So, in these instances we look to help our clients have the levels of transparency they desire locally reflected in their global contracts.

The ISA and its members welcomed the session run by FirmDecisions in Mumbai with enthusiasm. The key take-outs were that (a) any transparency issues advertisers are experiencing locally are also shared globally, and (b) through increased diligence, advertisers can secure greater transparency and better partnership from their agency relationships.

NOTE: FirmDecisions’ Indian roadshow was reported in Campaign Asia. FD’s Stephen Broderick was also interviewed by CNBC TV18’s Anant Rangaswami, editor of Storyboard, about the recent meeting with Indian advertisers.

About the Indian media and advertising market

India is the sixth largest advertising market in the world. This puts India behind markets including the UK and France, but ahead of Australia, Russia and Italy.

Most spend in India is channelled through the Big Six media agency groups, per the rest of the world.

The Indian market is projected to be worth US$9.9bn in 2017, a 12% increase on 2016. TV and press still dominate, accounting for 46% (US$4.5bn) and 29% (US$2.9bn) of the market respectively, according to figures reported by GroupM.[1]

Digital is – relatively – still in its infancy, accounting for a projected US$1.5bn in 2017, up from US$1.1bn in 2016. But investment in digital is projected to grow by 30% in 2017.[2]

PwC predicts[3] strong growth in digital, while traditional media are expected to remain resilient, with a compound annual growth rate (CAGR) in digital advertising spend of more than 20% in the five years to 2018. This will see internet advertising rising from US$341m in 2013 to US$862m in 2018.

Dentsu Aegis Network India predicts[4] total digital spend will increase from US$1.1bn to US$3.8bn between 2017 and 2020 at a CAGR of 37%. By 2020, digital is expected to account for 24% of all ad spend. This is being driven by the accelerated adoption of internet-enabled smartphones in the Indian market, together with falling data prices.

 

[1] This Year Next Year: Worldwide Media & Marketing Forecasts, pp.24-27 – GroupM. http://bit.ly/2omkFmM

[2] As note 1.

[3] Outlook: India – PwC http://pwc.to/2oXm5mr

[4] Reported in Digital Market Asia, 2 March 2017 – http://bit.ly/2oBigRD