Business

13th Pepper Awards

‘Our advertising market has grown from Rs. 12,000 crore to Rs. 60,000 crore in the last 10 years’

Madison World Chairman and Managing Director Sam Balsara, who was the chief guest at the 13th edition of Pepper Awards in Kochi late last week, also said that digital was the way forward for advertising with digital growing from a mere 4% to a significant 19% of the total advertising market during the same period.

K.G. SREENIVAS

Speaking at a glittering awards night at the 13th Pepper Awards in Kochi on 17 May 2019, Sam Balsara, Chairman of Madison World and one of India’s advertising giants, said awards were “important for they promote creativity, they push young people to the frontiers of creativity and excellence, and push them to do things they have never done before, which is how our advertising always remains fresh and always moves the hearts and the wallets of almost one billion Indians”.

Balsara prefaced his Keynote Address with a note of introspection. Referring to the pace of change that was enveloping the world, Balsara asserted that the change was faster in the world of adverting and media than it was in several other industries. This change, however, cannot  be seen in isolation. “Our consumer has also been changing very fast — be it behavioural, culinary, media consumption, social interaction, and work. In fact, the consumer is changing in a manner that we in advertising find it hard to respond to,” Balsara observed.

The most significant change, however, above all has been the arrival of digital, he said, while referring to the tectonic shifts in the industry. “Thus 4% of the ad market 10 years ago is now 19% — a hefty 19% of the total advertising market. That makes digital the third-largest medium in the country.” Digital has fundamentally transformed the industry, Balsara said.

As a direct consequence, print had lost 9 percentage points in terms of market share with TV trailing much less at 3 percentage points, Balsara pointed out.

Referring to the size of the industry, Balasara, who was inducted into the International Advertising Association Hall of Fame last year, said “The ad market has tripled in 10 years or increased by five times from Rs. 12,000 crore to Rs. 60,000 crore, registering an annual compounded annual growth of 12%. When I started out 31 years ago, the size of the ad market was approximately Rs. 500 crore.”

Balsara, who has on his roster some of the most iconic blue-chip brands of the country, sees even further “headroom for growth”. Asserting that the future of advertising in India continued to be bright, Balsara said, “advertising today is as a percent of our GDP is only 0.35% whereas the global average is close to 1%. Yet, sooner than later, we are going to hit the 1% mark and, therefore, even if our GDP was to remain constant the advertising market will treble in size to Rs. 1,80,000 crore.”

Balsara, whose company covers advertising, media, mobile, OOH, sport, analytics, PR, and entertainment, however, added a word of caution: “I must say the market though for marketers, advertisers, and clients is becoming tougher,” adding that “over the last 10 years I was surprised to find that television has added 3,000 new advertisers. In the same period, print has added 80,000 new advertisers. I imagine digital has added an even higher number than print has.”

DEMOCRATISATION

Referring to what he characterized as “democratization of brands and brand owners”, Balsara observed that this was “good news for Kerala”. As opposed to a time when a few large advertisers dominated AdEx, “today there are entrepreneurs in Kerala, Tamil Nadu, Gujarat, and UP who have realised the power of advertising and who have been bold enough to invest advertising money behind brands.”

Historically, advertising has always been a “big boys’ game”, said Balsara, adding “it was not for the weak-hearted, not for the small businessmen, not for the small entrepreneur”. Giants such as Proctor & Gamble, Cadbury, and ITC with “deep pockets” invested in advertising and “continue to invest in advertising”, Balsara pointed out.

Paying tribute to what he called a “new breed of entrepreneurs”, such as the Nirmas and Vicco Vajradantis, the 68 year old dapper adman said, “you have no dearth of such entrepreneurs in Kerala as well, resulting in what I call a democratisation of our AdEx”.

Substantiating his proposition, Balsara, who began Madison with just two clients — Godrej and Nelco — pointed out that a decade ago, the top 50 advertisers accounted for as much as 43% of AdEx while today, the top 50 account only for 35% of AdEx.

The emergence of local and regional brands was, therefore, key to this development, observed Balsara. “My advice to large advertisers, who have been Madison clients over the decades, has always been not to ignore the local and regional advertisers who are indeed very strong in their local areas, commanding high loyalty and who, with the new generation of promoters taking control of legacy businesses, are slowly expanding the geographical coverage of such brands.

Referring to market share and growth, Balsara cited a Nielsen study that found that the big 50 brands which accounted for 60% of the total market had actually grown only by 10.6%, whereas small brands which accounted only for 21% of the market had grown by 18.5%. “So, you could say that smaller, local, and regional brands have been growing at almost twice the pace of the larger brands.”

Underscoring the importance of local brands, Balsara referred to Bharat Puri, currently CMD of Pidilite, who, when he quit Cadbury as a global head, said, “the future, I think, in India is in Indian brands because Indian brands understand India like no foreign brand or MNC operating in a 100 countries can understand a geographically diverse and complex market such as India”.

Balsara, who was once Chairman of the Advertising Agencies of India Association and currently serves as an Executive Committee Member, hailed “all those entrepreneurs of Kerala who have outpaced the growth of MNC brands”. Citing the example of Wipro’s Santoor soap, he said the company “used a regional strategy over the years, focusing on one state year by year, whereby in 20 years it became India’s largest-selling soap”. Similar was the story of brands such as “Nirma, Vico, Rasna, and Wagh Bakri Chai who started out as local brands, but has today become national brands”, he added.

In his concluding remarks, Balsara, who has been at the helm of Madison World for over 31 years now, said Kerala had no dearth of entrepreneurs and in many categories such as gold, finance, and masalas had made a name for themselves. “My advice to marketers in Kerala would be to slowly but steadily expand the way some of Kerala’s jewelers and finance companies have,” he said, adding “there are no absolute truths in advertising”.

***

THE BALSARA AHORISMS

Delivering the Keynote Address at the Pepper Awards at Kochi, Sam Balsara also put together five pieces of advice for advertisers and brands.

Never Advertise Below Threshold Level. So, in my book, if you spend Rs. 99 instead of Rs. 100 on advertising, then you waste the entire 99. But if you spend Rs. 105 instead of Rs. 100, then you waste only 5. So which one would you choose? Obviously, you should spend 105.

If resources in terms of money is restricted, which is always the case, then what you should do is instead of spreading your money thin you should restrict the geography of your operations. If you don’t do this, I suspect your brands won’t grow and then you will lose confidence in your own brands and expansion plans.

Sooner or Later, You will have to Adopt Digital. Today digital allows you tremendous advantages in targeting select geographical pockets of niche audiences that are spread thinly all across India. Digital, because of its unique characteristic, provides two-way communication unlike TV, radio, print or cinema and is able connect with consumers in a deeper way. All our print titles are available in digital versions. All TV channels have started their OTT channels. So, digital clearly is the way forward.

Don’t Launch Too Many Brands. Many advertisers make the mistake of launching new brands hoping that it will increase their turnover. One big brand is more valuable than 10 small brands.

Don’t Go by Data Alone. While there is a lot of media data available in the market on viewership and readership, don’t make the mistake of becoming a slave to it as large advertisers tend to do. Use media data as a guide and not a crutch.

Good Brands do Good for Society. There is a growing consciousness among millennials — people born in the 80s and the 90s — that they would like to buy brands that are not just good but also good for society and do good for society. So, please adopt a social cause that is meaningful to your community and reflect that in your advertising. In this very city (Kochi) a few months ago, when we held the IAA World Congress, Paul Polman, the global CEO of Unilever, and Mark Pritchard, Chief Growth & Brand Officer Procter & Gamble, devoted their entire speech to this subject. So obviously, this is a very important subject.

 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

To Top