Ad spends of real estate, telecom companies zoom
Monday, 10 September 2007, 19:30 IST
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New Delhi: Ad spends, proportionate to sales by real estate and telecommunication firms, have zoomed considerably in the past seven years, overtaking traditional spenders like fast moving consumer goods (FMCG) companies, a new study shows. Real estate and telecom firms increased their advertising budgets by an annual 36 and 21 percent respectively between 2000 and 2006, while FMCG spends increased by a mere two percent, the Assocham Eco Pulse (AEP) study released Sunday says. The next big spenders are white goods manufacturers, especially of air conditioners and refrigerators; liquor manufacturers and companies making passenger and multi-utility vehicles. The maximum rise of 20 percent was by white goods producers, followed by 10 percent by the liquor industry and 9.5 percent by carmakers. "With services becoming the driver of the Indian economy, advertising which spreads consumer awareness has made an important contribution to the growth in some of the dynamic sectors like real estates and telecommunications", Associated Chambers of Commerce and Industry of India (Assocham) president Venugopal Dhoot said of the survey. While the Indian real estate market is growing at 30 percent, the construction sector has grown at 16.6 percent in the first quarter of the current fiscal as compared to 15.6 percent in the same period of the previous year. The average growth of the sector over the period 2000-01 to 2006-07 at 9.9 percent has surpassed the manufacturing and services sectors' growth of seven and 8.6 percent respectively. "Rising income levels, a bulging middle class, rapid urbanization, and emerging cities have led to sharp rise in demand for housing properties in India and have thus boosted the advertising needs of the construction and real estate companies," the study said. "The growth in advertising spend of these companies has surpassed the marketing as well as total expenses that were averaging six and 12.8 percent respectively. The advertising expenses of the construction sector have increased from 0.1 percent of sales in 2000-01 to 0.2 percent in 2006-07 - a 36 percent rise," the study added. The 233 companies surveyed for the study witnessed an average 16 percent jump in sales and total income during the seven years, it pointed out. The telecom sector is also growing fast and adding mobile subscribers at a record rate of 46 percent per month. The total telephone subscriber base has reached 225.2 million, with 136 million GSM mobile users and 49.1 million CDMA users. "Intense competition and the huge and growing youth population as target customers is leading to rising advertisement and marketing expenses by telecom companies. "Advertising expenses in the telecom sector have risen from 0.9 percent of sales to 1.9 percent in the seven-year period. The sector has witnessed average growth of 13.7 percent in sales and 14.4 percent in total income during 2000-2006," the study said.
Source: IANS
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