Analyzing Government Advertising Expenditure in India: Transforming Media Strategies

The famous Amul girl was probably one of the earliest media influencers that we know of. From there, till today, where we have millions of influencers influencing our lives’ choices on a daily basis, the journey of advertisements has seen a huge evolution.

Let's rewind to the 1700s. A British officer stationed in Calcutta named James Augustus Hickey published the country's first newspaper known as “Hickey's Bengal Gazette” or "The Bengal Gazette" in 1780. To fund the newspapers and for a few other reasons, Hickey started posting advertisements in the newspaper, thus beginning the journey of advertisements in India.

Today we’re in a state, where we have to watch not one, but two advertisements before almost every YouTube video. Advertisements have become such an inescapable part of our daily lives.

Evolution of Media Strategies
Government's Expenditure on Advertisements
What Do Experts Say About the Trends in Print and Digital Advertisements?
Role of Advertisements in the Country’s Economy

Evolution of Media Strategies

Over the past few decades, the landscape of advertising in India has undergone a huge transformative shift, primarily fuelled by the digital revolution. Traditional media, while still relevant, has taken a backseat as digital platforms emerged as the new frontier.

The 20th and 21st centuries saw a huge transformation of advertisements from newspapers, magazine advertising, radio broadcasting, television advertising, and Out-of-home advertisements which include billboards, transit advertising, and street furniture advertising to digital and mobile advertising.

Now, in the digital age, reports like ‘Internet in India Report 2022’ say that there are 759 million active internet users in India as of 2022. Also, the numbers are expected to rise to 900 million by 2025.

As a result, brands have started to redirect their focus towards online spaces, leveraging social media, search engines, and other digital channels to connect with their audience. Today, social media is where ads shine, and influencers play a big role. Thus, from clever memes to touching short films, Indian ads have come a long way since the beginning of advertisements in the 1780s.

Out-Of-Home Advertising: Marketing Strategy and Its Benefits

Outdoor advertising is highly effective to reach a huge customer base. Check out the different types of Outdoor Advertising and their benefits.

Aditi ChawdaStartupTalky

Government's Expenditure on Advertisements

Keeping this evolution story aside, now let’s see some numbers to analyze the actual state and growth of advertisements in the past few years.

Reports say that the Government’s expenditure on advertisements in print, electronic & digital media has shown a declining trend in the past few years.

In response to an RTI query, the Ministry of Information and Broadcasting released some numbers in July 2023.

According to them, the central government’s advertisement expenditure was ₹1180 crore in 2018-19, ₹708 crore in 2019-20, ₹409 crore in 2020-21 and further declining to ₹315 crore in 2021-22.

Now let’s compare the print & digital advertisements.

What’s surprising from the above table is that while the expenditure on print advertisements is expected to fall with the growing digital media, the expenditure on digital advertisements is expected to have risen over the years, which is evidently not the case.

Earlier in 2021, the Minister of Information and Broadcasting Anurag Thakur had said that the government has cut back on spending on advertisements by limiting the quantity of non-communication advertisements like those that invite bids or post job openings and by providing a small amount of information with links to more information.

This being the case, reports also say that the expenditure on advertisements by the government has slightly gone up in the financial year 2023 to ₹375 crores.

What Do Experts Say About the Trends in Print and Digital Advertisements?

The Credit Rating Information Services of India Limited (CRISIL) forecasts, “The revenue of print media is expected to jump 13 to 15 percent this year (2023) on the back of higher spending on advertisements by corporates as well as the government due to upcoming elections”.

On the same lines, Amit Khurana, deputy chief executive officer, of TechNova Imaging Systems says, “With newsprint prices declining, the newspaper industry is heading towards profitability.”

Commenting on the digital media trends, media analyst Karan Taurani says, “Over the last few years, radio advertisements have come down sharply, considering their low popularity. But TV advertisements haven’t really fallen.”

From all these reports & comments, we get a broader picture of where the different forms of advertisements stand, today.

But why do advertisements need so much analysis? What role do they play in a country’s economy?

Role of Advertisements in the Country’s Economy

Advertisements play a multifaceted role in the development of a country, influencing various aspects of society and the economy.

Advertisements are crucial for economic development as they drive consumer spending. By promoting goods and services, advertisements contribute to increased sales and production, fostering economic growth.

Also, the advertising industry itself becomes a source of employment and stimulates demand for creative talent, marketing professionals, and media personnel.

Advertisements provide a platform for businesses & entrepreneurs, particularly small and medium enterprises (SMEs), to reach a wider audience. Effective advertising can help startups and entrepreneurs establish their brands, attract customers, and compete in the market.

Governments often use advertising to generate revenue. The public service announcements, sponsored content, and partnerships with private advertisers contribute to government coffers.

Advertisements play a role in shaping cultural norms and values. They reflect and influence societal trends, attitudes, and aspirations. Ad campaigns often contribute to cultural conversations, challenging stereotypes, and promoting inclusivity.

The media industry is significantly dependent on income generated from advertising. Newspapers, television, radio, and online platforms depend on ads for financial sustenance.

Advertisements are a means of disseminating information about products, services, and public initiatives. Public service announcements also educate citizens about health, safety, and civic responsibilities.

Advertisements are powerful tools for social advocacy. Campaigns addressing social issues, such as public health, environmental concerns, and social justice, can raise awareness and mobilize support for positive change.

For instance, advertisements played a major role in spreading crucial awareness during the COVID-19 pandemic.

Conclusion

On the whole, advertisements play a pivotal role in shaping the economic, cultural, and social dimensions of a country. That said, the utilization and expenditure on advertisements also depend on the current economic & social conditions prevailing in a country.

Yet, in every circumstance, it is important to strike a balance between commercial interests and societal welfare to ensure that advertisements contribute positively to a country's development.