INDIAN ADVERTISING INDUSTRY 2015[i]

Firms in the advertising industry prepare advertisements for other organisations and design campaigns to promote the interests and image of their clients.

This industry also includes media representative-firms that sell advertising space for publications, radio, television, and the Internet; display advertisers-businesses engaged in creating and designing public display ads for use in shopping malls, on billboards, or in similar media; and direct mail advertisers. A firm that purchases advertising time (or space) from media outlets, thereafter reselling it to advertising agencies or individual companies directly, is considered a media buying agency.

ADVERTISING INDUSTRY MARKET SIZE AND GROWTH

Advertising spends in India are expected to grow 12.6% year on year to Rs 48,977 crore for the year 2015. The ad spend in 2014 was Rs. 43,490 crore, which reflected a 12.5% increase over 2013.

The higher growth has been attributed to increase in spending due to elections (both general and state elections) and advertising from categories like e-commerce and telecom.

Between 2013 and 2018, India is projected to be the second fastest growing advertising market in Asia, topped only by China.

ADVERTISING INDUSTRY SEGMENTS[ii]

INR Cr[iii]	2015 -Ad Expenditure
TV	22,446
Print	16,872
Radio	2,007
OOH	2,582
Cinema	482
Digital	4,661

1. Television

– Television shows a higher growth percentage in 2015 compared to last year with 16%.

– TV channels will especially be bullish with cross media integration via their own digital platforms.

– The big ticket event this year was the ICC Cricket World Cup in February and March

2. Print

– Even with pressures on advertising revenues, the print medium showed an increase by 5.2% as against the 2014 estimate of 7.6%

– Print magazines continue to be on the decline, as several are looking at digital delivery mechanisms.

– It’s wide regional reach shall still be an advantage that print advertising can cash in on.

3. Radio

– Radio in India is expected to grow at a heartening 17% over the next 5 years.

– It is expected to gain further popularity, backed by increased device adoption.

– With the auction of phase 3 FM licensing announced by the GOI, increase is expected in the listenership and the share of revenues for the Radio segment.

4. OOH (Out of Home)

– The Indian OOH advertising industry has seen an increase from 2,483 crore in 2014 to 2,582 cr in 2015, at a growth rate of 12%

– This growth was driven by the fact that consumers are spending more time out of their homes and the chances of seeing billboards and other mediums of OOH advertising are much more.

– Transit advertising is emerging as the fastest growing segment of OOH advertising. The major categories are billboards, transit, alternative, and street furniture.

5. Cinema[iv]

– Cinema advertising is expected to grow by 20 per cent, as multiplex chains consolidate.

– This growth was driven by the fact that the medium becoming more organised and accountable.

– Ads in cinemas are anywhere between 30 to 60 seconds, giving advertisers more room to drive home their communication message.

– Cinema advertising, at the end of 2014, clocked a 25 per cent increase in spends.

6. Digital

– Digital media continues to show the maximum growth with 37% in 2015.

– Video, Mobile and Social to be the biggest growth drivers.

PRIVATE EQUITY AND M&A IN ADVERTISING INDUSTRY[v]

Year	Acquirer	Target	Target/Transaction - Note	Type
2013	Publicis Group	Convonix Systems	Publicis acquired Convonix, a full-service digital marketing and consulting agency, based in Mumbai.	M&A
2013	Dentsu Media	Webchutney Studio	Dentsu acquired an 80% stake in Webchutney, a digital marketing company.	M&A
2013	Peppul Capital	Komli Media	Komli Media raised 30 million USD from new investor Peepul Capital. Komli Media is Asia Pacific's leading media technology company.	PE
2015	Dentsu Aegis Network	Fountainhead Entertainment	Fountainhead Digital is an Online Marketing, Technology and Content Development agency	M&A

ADVERTISING INDUSTRY LISTED FIRMS[vi]

Name	Revenue	EV	EBITDA	EV/Rev	EV/EBITDA	Growth in Rev
Pressman Advertising Ltd	461.2 Mil	576.1 M	62.9 Mil	0.8x	7.3x	-39.20%

TOP ADVERTISING AGENCIES IN INDIA[vii]

Name	Key People	Major Clients	Head Office
Ogilvy & Mather	Piysuh Pandey, Executive Chairman and John Goodman, CEO	IDBI Mutual Fund, SBI Mutual Fund, TTK Textiles , J K Tyres, Pantaloon Fashion India Ltd, Cadbury, Louis Philippe, UTI, TVS Suzuki	Mumbai
Crayons Advertising and Marketing Pvt Ltd	Kunal Lullani, Managing Director	Marshal, Jindal art glass	New Delhi
McCann Erickson India	Santosh Desai, President	Coca-Cola, Nestle, BPL, Khaitan	New Delhi
Lowe Lintas	Pranesh Misra, President	ITC, Johnson & Johnson, Air France, BPL, Nestle India Ltd	Mumbai
Creative Advertising	Vishwanath Iyer, Director	Trendly systems	Mumbai
J. Walter Thompson	Colvyn J harris, CEO	Pepsico, DYC, Hero Honda Motors, Glaxo Smithkline, Frito Lays India, HPCL, Unilever Home	Mumbai
Chaitra Leo Burnett Pvt Ltd	Arvind Sharma, Managing Director	ICICI, Bajaj Auto, Dabur India, BPL Ltd, Coca –cola, Toyota, Amtrex Hitachi	Mumbai
Mudra Communications Ltd	Madhuka Kamath, CEO	Mahanagar Telephone Nigam Ltd, Indian Express, Mid-Day, Global Trust bank, Indian Tourism Development Corporation, Business Standard, Raj TV, Henkel Spice India	Ahmadabad
Grey Worldwide	Ashutosh Khanna, CEO	Ministry of Tourism, ONGC, Gujarat Ambuja, Chhattisgarh Tourism, Haier Appliance	Mumbai
Akshara Advertising	S K Swami, CEO	University of Rajasthan, ONGC, MTNL	New Delhi

TOP DIGITAL MARKETING AGENCIES IN INDIA[viii]

Name	Description	Clients
Webchutney	This is one of the top digital marketing firms of the country.	Boston Consulting Group, Airtel, MakeMyTrip, BookMyShow, Tata Motors, Unilever, P&G, HP, Airtel, Microsoft, carslberg and Suzlon.
BC Web Wise	Digital solutions range from website development to online marketing that includes social media and search marketing, as well as media planning and buying.	Hero Honda, airtel, Microsoft, ITC, HUL, Kellogs, GroupM.
Avignyata Inc	digital marketing company include social media marketing services, online monitoring	Inorbit, OVS Industry, Educationtimes.com, Shoppers stop, Sony pictures, Bigg Boss, Big Music, Bloomberg UTV, Murder 2, Movie I AM, Movie Tahaan, Walt Disney Pictures, Movie Zohan
Windchimes Communication	social media agency that provides innovative solutions for brand marketing and social media management	Pond’s, SESA Goa LTD, GE, HDFC Bank, ITC Hotels, Sony Pix, Hindustan Unilever Limited, Lavasa, Thomas Cook, TVS Scooty, Bajaj Allianz, Emerson, Sony Music, Red Bull, ebay.in, Marico, Tommy Hilfiger, Sil, ITC-WelcomGroup, Ginger, Big Bazaar, etc.
Sparrowi	Interactive agency creating digital content starting from websites	DLF, HCL, HMEL, Honda, Intex
Blue digital	Services that are focused on marketing solutions which aim towards various digital formats.	Pearl Academy, Span, Geojit, DWA, BIFM
Flare Path	Provides end-to-end, creative content marketing services and products.	Diesel, Movies Now, ET Now, Channel V, AZA, NDTV
Alive Now	full-service award-winning social media agency offering a wide range of social media services	Hard Rock Cafe, Pepsi, Hyundai, California Pizza Kitchen, Nandos, Chevrolet, KIA, Subaru, ITC, Prestige TTK,
Interactive Avenues	full-service digital marketing company include media, creative, search, analytics, mobile, social and ORM	Tanishq Mia, Mumbai Fighter, American Express, GNIIT, Durex Play O, Toyota Prius, Sony Walkman, Intel
Softz Solutions	Digital marketing agency boasts of a global clientele from all around UK, USA, Australia, Ireland and other European countries	9Round, Inspire Wifi, Big eye deers

ADVERTISING INDUSTRY GROWTH DRIVERS[ix] [x] [xi]

Funded e-commerce start-ups advertising heavily to capture marketshare
Mobile and internet adoption driving digital media advertising growth
Increased literacy rate in tier II and tier III cities driving print advertising
Evolution of targeted advertising (Separate HD channels for premium brands, Geographic advertising for local ads)
More multinational entrants under single brand retail are likely to add to retail spending
Higher spends from the Central Government as they showcase their new initiatives
Digitization of the OOH media in India and advent of new avenues for advertising

[i] http://advertising.indiabizclub.com/info/advertising_industry

[ii] http://www.medianama.com/2015/02/223-advertising-in-india/

[iii] http://www.indiainfoline.com/article/news-top-story/groupm-estimates-indian-adex-to-increase-by-12-6-in-2015-115020300193_1.html

[iv] http://www.afaqs.com/news/story/43163_Indian-AdEx-to-increase-by-126-in-2015-GroupM-Report

[v] http://www.pwc.in/assets/pdfs/india-entertainment-and-media-outlook/india-entertainment-and-media-outlook-2014.pdf

[vi] http://www.gurufocus.com/term/pettm/BOM:509077/P%252FE%2BRatio%2528ttm%2529/

[vii] http://companiesinindia.in/advertising-agencies-in-india/

[viii] http://www.mindandmatter.in/digital-marketing/top-25-digital-marketing-companies-in-india/

[ix] http://www.exchange4media.com/advertising/indian-advertising-industry-grew-by-16.4-in-2014-almost-at-par-with-our-projection-of-16.8sam-balsara_59164.html#sthash.P9qZqtsB.dpuf

[x] https://www.kpmg.com/IN/en/Press%20Release/Frames-2015-Information-Note-KPMG-in-India.pdf

[xi] http://www.medianama.com/2015/02/223-advertising-in-india/

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