Integrated marketing communication structure, size & opportunities

• Structure of the Advertising and Promotions World

• Study the Global and Indian Advertising Industry

• Size of the Indian market, structure of the Industry, major players, trends in the industry, functions in an agency, compensation structures to agencies, major advertisers (corporates) awards in the Industry.

INTEGRATED MARKETING

COMMUNICATION

Submitted By:

Chintan Shah Hershita Singh Rahul Gupta Samik Sarkar S. Kartik

Aditya Mittal

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1

STRUCTURE OF THE

ADVERTISING

AND PROMOTIONS WORLD

STRUCTURE OF ADVERTISING WORLD

Advertising World

Advertisers

Agency or Freelancer

Media

Third Parties

Audience

Regulatory

Bodies


Advertisers

Big vs. Medium

vs. Small

NicheAgencies

Multinational vs.

National vs.

Regional

Product vs.

Service

Multinationalvs.

National

Govt.&

Private

Agency or Freelancer


Secondary

Demographicor

Psychographics

Primary

AudienceRegulator

yBodies

Socio Economic

Indian Broadcasti

ng Federation

The Government

Indian Newspaper

Society

Advertising Standard

Council of India

Media

Electronic Media

Print Media

Social Media

Publish Media


STRUCTURE OF AN ADVERTISING

COMPANY

Advertising Company

Account Service

Account Planning

Creative

Finance &

Accounts

Media Buying

Production


COMPANY

Account Service

Account Manager

s

Account Directors

Account Executiv

es

• Responsible for liaising with

the agency's many clients

• Link between the many

departments within the

agency and the clients

Account Planning

Research

Strategic Thinking

• Provides consumer insights

• Strategic direction

• Research

• Focus groups

• Assists in keeping advertising

campaigns on target and on brand


COMPANY

Creative

Copywriters

Art Director

s

Designers

Production Artists

Web Designe

rs

Associate

Creative Director

s

Creative Director

s

• Lifeblood of the business

• Responsible for the product

• Copywriters and art directors are paired up, working as teams.

• Sometimes, traffic is handled by a position within the creative department

• Everyone within creative services reports to the Creative Director

• It is Creative Director’s role to steer the creative product, making sure it is on brand, on brief and on time.


COMPANY

Finance &

Accounts

Media Buying

• Handling payment of salaries,

benefits, vendor costs, travel, day-

to-day business costs and

everything else you'd expect from

doing business.

• Approximately 70% of an ad

agency's income pays salary and

benefits to employees.

• To procure the advertising time and/or

space required for a successful advertising

campaign

• This includes TV and radio time, outdoor

(billboards, posters, guerrilla), magazine

and newspaper insertions, internet banners

and takeovers, and, well, anywhere else an

ad can be placed for a fee.

• Involves close collaboration with the

creative department who came up with the

initial ideas, as well as the client and the

kind of exposure they want.


COMPANY

Production

• During the creative process, the production department will be

consulted to talk about the feasibility of executing certain ideas.

• Once the ad is sold to the client, the creative and account teams

will collaborate with production to get the campaign produced

on budget.

• Production also works closely with the media department, who

will supply the specs and deadlines for the jobs.

• In small to mid-sized agencies, traffic is also a part of the

production department. It is the job of traffic to get each and

every job through the various stages of

• Account management

• Creative development

• Media buying

• Production in a set timeframe

• Work flows through the agency smoothly, preventing jams that

may overwhelm creative teams and lead to very long hours,

missed deadlines and problematic client relationships.

2

STUDY THE GLOBAL AND

INDIAN

ADVERTISING INDUSTRY

GLOBAL TRENDS IN ADVERTISING

• ‡Global Ad Spend Increased 3.1% in Q1 2012

• Overall global ad spend in Q1 2012 grew to $128 billion

USD

• Middle East, Africa and Latin America Leading Growth

• In North America and Europe, the ad market did not

experience the same level of increase

• North American ad spend grew 2.1 percent

• BRIC leads for online video consumption

• Ad spend in Europe declined slightly (1.4%), with

countries most impacted by the recession (Greece and

Spain) the hardest hit


• ‡The world is looking beyond 30 Second commercial

• 84% of the global internet users have shopped online

• ‡Simplicity in communication is returning

• ‡The average teen sends & receives 3339 text messages

every month

• 70 % of global internet users watch online video

• ‡Single message across Markets and countries is the way

forward. One world. One campaign.

• Despite the Internet, we’re watching more TV and not less


• ‡The number of people watching television is up nearly

20% from last year

• Sports attract more HD Viewers than any other TV genre

• 74% of US households believe store brands are a good

alternative to name brands.

• More than $ 1 trillion a year is spent on marketing and it’s

estimated that 15-30% is wasted each year

• Sports and Film personalities continue to dominate as

Brand endorsers

SPECIALIZED SERVICES OF ADVERTISING

AGENCY

• Direct Response Agencies

• Sales Promotion Agencies

• Public Relation Firms

• Interactive Agencies

• Event Marketing Agencies

• Market Research Agencies

3SIZE OF THE INDIAN MARKET

MAJOR PLAYERS

TRENDS IN THE INDUSTRY

FUNCTIONS IN AN AGENCY

COMPENSATION STRUCTURES TO

AGENCIES

MAJOR ADVERTISERS AWARDS IN THE

INDUSTRY

SIZE OF THE INDIAN MARKET

• Advertising in India today, says Gerson Dacunha in an essay in Ad

Katha, is a Rs 30,000 crore (US$ 6bn) industry which makes it 3

times the size of its sibling, Bollywood.

• It finances India’s newspapers, magazines, TV channels and internet

sites and allows our noisy, quarrelsome and democratic system to

function in defiance of powerful governments and even more

powerful private vested interests

• CAGR (2003-11) – 15%

• Expected Growth 2012: 8-9%

• Industry Margins – 1-2%

http://www.rediff.com/money/report/column-utterly-butterly-indian-ads/20120503.htm

http://www.rediff.com/money/report/column-utterly-butterly-indian-ads/20120503.htm

MAJOR PLAYERS

Ogilvy & Mather

J Walter Thompson

Mudra Communication

FCB Ulka Advertising Ltd

Rediffusion DY & R

McCann Erickson India Ltd.

RK Swamy BBDO Advertising Ltd.

Grey Worldwide (I) Pvt. Ltd.

Leo Burnett India Pvt. Ltd.

Contract Advertising India Ltd.

MAJOR PLAYERS

Piyush Pandey, Ogilvy Prasoon Joshi, McCann EricksonAgnello Dias, Taproot

Bobby Pawar, JWT R Balakrishnan, Lowe LintasMadhukar Kamath, Mudra India

MAJOR PLAYERS

Abhijit Avasthi, Ogilvy Colvyn Harris, JWT Sam Balsara, Madison World

Rajiv Rao, Ogilvy Josy Paul, BBDO Vikram Sakhuja, GroupM

TRENDS IN THE

INDUSTRY

GLOBAL ADVERTISING TRENDS

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Print TV Radio Cinema OOH Internet

GLOBAL ADVERTISING GROWTH BY MEDIA

CATEGORY

TOP 10 COUNTRIES - ADVERTISING

SPENDS (2012)

Rank Country USD Percentag

e

1 US 152,887 34.0%

2 China 33,258 7.4%

3 Japan 32,113 7.2%

4 Germany 24,769 5.5%

5 UK 19,619 4.4%

6 France 14,582 3.2%

7 Brazil 13,134 2.9%

8 Canada 12,384 2.8%

9 Australia 12,167 2.7%

10 Italy 11,337 2.5%

Top Ten 326,250 72.7%

Grand Total (63 Countries) 449,019 100.0%

TRENDS IN THE ASIAN MARKETS

TRENDS IN THE ASIAN MARKETS

TOTAL ADVERTISING EXPENDITURE - INDIA

- 50,000 100,000 150,000 200,000 250,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

62,900

74,595

80,620

92,700

104,300

124,000

151,000

176,950

203,100

210,600

226,200

Rs Millions

ADVERTISING TRENDS - PRINT INDUSTRY

- 20,000 40,000 60,000 80,000 100,000 120,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

35,500

38,000

40,200

43,020

49,380

59,800

71,000

84,600

97,200

98,500

102,400

Rs Millions

ADVERTISING TRENDS – TELEVISION

INDUSTRY

- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

19,800

28,500

31,600

37,330

41,350

48,200

60,400

70,400

81,100

85,000

93,600

Rs Millions

ADVERTISING TRENDS – RADIO INDUSTRY

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

1,300

1,350

1,500

2,550

2,750

4,100

5,600

5,800

6,750

7,900

8,700

Rs Millions

ADVERTISING TRENDS – CINEMA

INDUSTRY

- 200 400 600 800 1,000 1,200 1,400 1,600

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

900

945

1,020

1,200

1,450

1,600

1,600

1,100

1,250

1,100

1,200

Rs Millions

ADVERTISING TRENDS – OOH INDUSTRY

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

5,400

5,800

6,300

7,700

8,420

8,900

9,800

12,000

13,300

13,400

14,500

Rs Millions

ADVERTISING TRENDS – INTERNET

INDUSTRY

- 1,000 2,000 3,000 4,000 5,000 6,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

-

-

-

300

950

1,400

2,600

3,050

3,500

4,900

5,800

Rs Millions

MOBILE MARKET - INDIA BY THE NUMBERS

• There are more mobile phones in India than in any other country, except China.

• There's still room for growth. Mobile penetration is 76%, slightly below the global average of nearly 80% .

• Four of five Indian mobile users owns a phone that can surf the web

• Indian mobile users, are predominantly male (85%) and in their 20s (63%). Three channels of content dominate their time online:

• Glamour & Dating

• Mobile Content

• Entertainment & Lifestyle.

• Mobile Advertising revenues were pegged at $ 56.5 million in 2011 and are forecasted to reach $ 247 million by 2015.

• Mobile Advertising is set to grow 10 fold in coming 5 years

INTERNET MARKET - INDIA BY THE

NUMBERS

• Even today India has one of the lowest Internet penetration in world, pegged at about 10% of total population.

• Still India is the 3rd largest country when it comes to number of internet users (accounting for 10.8% of all users), which crossed 100 million mark late last year.

• Online advertising market in India is pegged at $ 410 million

• Spends are expected to quadruple to $ 1.6 billion by 2015

• Online channel currently represents 7% of total advertising spends and is expected to reach 15% in next 3 years.

MORE INTERESTING STATS ON ONLINE &

MOBILE ADVERTISING• Google and Facebook account for over 60% of India’s online

advertising Market.

• Currently the online classifies business in India is valued at $ 225

million and is expected to reach $ 510 million by 2015.

• Almost 50% of entire classifieds business currently takes place over

the Internet

• The Mobile Classified Business is Valued at $ 45 Million

• Search and Display ads alone were pegged at $ 250 million by the end

of Q3’ 2011. The same is expected to triple to $ 750 million by 2014.

• Google and Yahoo are most popular portals with over 84% of online

Indians using their sites for searches and information.

** Published in Digital Marketing Yearbook for 2012.

MORE INTERESTING STATS ON ONLINE &

MOBILE ADVERTISING

FUNCTIONS IN AN AGENCY

• Complete a market analysis

• Develop an advertising plan

• Prepare a creative strategy

• Create advertising execution

• Develop & Implement a media plan

• Handling billing and payment

• Integrate other marketing communications

COMPENSATION STRUCTURES TO

AGENCIES

1. Commissions: For many years, standard agency compensation was 15 %

of the total amount spent by client on mass media such as television,

radio, magazines & newspapers

2. Mark-ups

a) Agencies routinely contract with outside vendors such as

photographers, printers, researchers and film directors

b) Mark-up ranges from 17.65 percent to 20 percent

3. Fee System

a) Hourly rate

b) Fixed rate

4. Pay-for-Results Plans

a) Agency's compensation on the effectiveness of its work

MAJOR ADVERTISERS (CORPORATES)

AWARDS IN THE INDUSTRY

• Cannes Lions International Advertising Festival awards

• Caples Direct Marketing Awards

• Clio Awards

• D&AD Awards

• Effie Awards

• International ANDY Awards

• Summit International Awards

• Creative ABBY Awards

THANK

YOU!!!!!