The first recognized ad agency in the country was B. Dattaram Co., founded in 1905. Other early ad agencies included Bombay-based Ind-Advertising Agency and the Calcutta Advertising Agency, founded in 1909. Some leading newspapers also set up studios to provide assistance in copywriting and illustration to advertisers.
Within the next two decades, a few multinational agencies established themselves on the Indian advertising scene. A British agency, S.H. Benson Ltd., opened in India in 1928, and J. Walter Thompson Co. followed in 1929. Lintas India Ltd. was founded in 1939. McCann-Erickson formed an alliance with Calcutta-based Clarion Advertising in 1956. A few smaller multinational agencies, such as the now-defunct Grant, Kenyon & Eckhardt (India) Private Ltd. also established a foothold in India.
In the late 1960s and early '70s, the government of India began to impose restrictions on foreign ownership of equity in companies that were not involved in "core sector" activities. Several multinational corporations, most notably Coca-Cola Co. and IBM Corp., instead closed their doors.
The protectionist economic policies of successive governments in the 1960s and '70s had a dampening effect on multinational ad agencies. In the 1960s, JWT divested its equity stake in Hindustan Thompson Associates, which became an employee-owned company; Lintas India Ltd. was also "Indianized" in 1969. Despite those setbacks for multinational Western agency networks, the ad industry experienced record growth during this decade. The number of ad agencies registered with the Indian Newspaper Society during this period grew by 58.5%, from 106 agencies in 1969 to 168 agencies in 1979.
While multinational shops cut back their presence in the 1960s and '70s, a number of indigenous agencies were founded during this period, including Chaitra, daCunha, Enterprise, Everest, Frank Simoes Advertising, Mudra, RK Swamy, Rediffusion, Sista's, Trikaya and Ulka. In subsequent decades, many of those agencies entered into joint ventures with multinational agency networks.
While many of those joint ventures were loose affiliations without any financial commitment by either party, that trend changed in the 1990s. Many Indian shops agreed to allow their multinational partners to acquire an equity interest in return for the infusion of fresh capital. Consequently, multinational agency networks steadily increased their financial stakes in their Indian joint ventures.
JWT repurchased a controlling interest in its former Indian affiliate and acquired HTA subsidiary Contract Advertising. In addition, Lintas and Ogilvy & Mather (the successor shop to S.H. Benson Ltd.), which had enjoyed long-term presences in India, reasserted their influence on the subcontinent.
Some multinationals involved in joint ventures included Leo Burnett Co. (Chaitra Leo Burnett Private), BBDO Worldwide (RK Swamy BBDO Advertising), Bozell (MAA Bozell), Dentsu Young & Rubicam (Rediffusion/DY&R), DDB Worldwide (Mudra Communications), Foote, Cone & Belding (FCB Ulka), Grey Advertising (Trikaya Grey) and Saatchi & Saatchi (Sista's Saatchi & Saatchi). McCann-Erickson, which earlier had teamed with Calcutta-based Clarion Advertising, also re-entered the Indian market in the 1990s as McCann-Erickson India.
An analysis of data from annual agency reports published by Advertising & Marketing, India's leading advertising trade journal, showed that the 20 largest agencies in India accounted for almost three-quarters of total agency billings among more than 100 agencies participating in the survey in the 1990s.
Financial advertising agencies also became prominent in the 1970s. Such shops had little involvement in corporate or brand advertising for clients but derived a major proportion of their business from publicizing stock and bond issues. Financial agencies differentiated themselves from the competition by undertaking non-advertising activities that traditional agencies initially were reluctant to handle, such as arranging stockbroker conferences and handling media relations.
The products that account for the largest ad expenditures in India are bath soaps, laundry detergents, soft drinks, toothpaste, textiles, tires, confectionery, cigarettes and tea. Not surprisingly, the majority of these are consumer non-durables that demand high-frequency advertising. Consumer durables (such as TVs and VCRs) and appliances (such as refrigerators and washing machines) are also heavily advertised.
According to Advertising & Marketing, in 2000 the top corporate advertisers in India were (in descending order) Hindustan Lever (the Indian arm of Unilever), Colgate-Palmolive Co., ITC (a conglomerate marketing tobacco, hotels and food products), Dabur, Nestlé India, Britannia
Industries, Bajaj Auto and Tata Chemicals. In addition, the government (both central and state) accounted for a large share of total newspaper advertising, mostly in the form of contract notices and recruitment advertising.
The ownership of print media in India has mostly been in private hands. According to estimates, more than 32,000 newspapers and magazines were published in India by the early 21st century. Only 715 of those were members of the Indian Newspaper Society, the leading trade association in the field, and 345 were members of the Audit Bureau of Circulations. Print media still enjoyed the largest share of ad expenditures in India, although since the mid-1980s they had been losing ground to TV.
Newspapers and magazines are published in India's 15 official languages and in several dialects as well. There are distinct regional variations in circulation levels, reflecting differences in literacy levels across the states of India. Some of the newspapers and magazines with the highest circulations are published in Malayalam (the regional language of the state of Kerala) and Bengali (the regional language of the state of West Bengal), as these states have higher literacy rates than others.
English-language newspapers and magazines do not have the largest circulation in any single region, but they are extremely influential in terms of opinion leadership and agenda setting and are therefore considered important, especially for national advertising campaigns. Foreign magazine titles were largely unknown until the 1990s (with the exception of Reader's Digest, which has had a presence in India for many decades), but magazines such as Cosmopolitan and Elle now publish Indian editions.
While the first TV station in India started broadcasting as early as 1959, it was not until 1984 that a nationwide TV network was established. In India, broadcast TV is a monopoly controlled by Doordarshan, a government-run network that has been supported by advertising since the introduction of its national network.
Until the late 1980s, most parts of the country had access to only a single TV channel that broadcast for a limited number of hours daily. That scenario has since changed substantially, due in large part to the entry of satellite transmission of TV signals by Hong Kong-based Star-TV.
Households in some cities with cable connections have access to as many as 65 channels of programming originating both in India and abroad. In response to the competition from cable programming, Doordarshan diversified its offerings and now has multiple channels in many markets, offering more than 1,000 hours of programming per week.
Like broadcast TV, radio is a government monopoly in India. All India Radio operates a nationwide network of stations, primarily in the AM band. Advertising is accepted on a limited basis. A small number of FM stations in the largest urban markets carry a limited number of privately produced programs. Radio accounts for about 2% of total ad expenditures, a figure that remained constant throughout the 1990s to the early 21st century.
Outdoor media (primarily billboards) accounted for the third-largest share (3% to 5% in the 1990s) of advertising expenditures after print media and TV. Advertising in movie theaters accounted for only about 2% of total ad expenditures in the 1990s.
The top trade organizations representing various aspects of the ad industry include the Indian Society of Advertisers, the Advertising Agencies Association of India and the Indian Newspaper Society. The Advertising Standards Council of India is a self-regulatory body formed by a coalition of advertising agencies, advertisers and media companies.
There is also a small but growing consumer movement. Advertising regulation is supervised by the Monopolies & Restrictive Trade Practices Commission (a body similar to the Federal Trade Commission in the U.S.). The Securities & Exchange Board of India also has regulatory authority with respect to the content of financial advertising.