Ad spend by realty, telecom firms zooms: Assocham

New Delhi, Sept 9 (UNI) The advertising budget by the real estate and telecom firms in proportion to their sales has zoomed by 36 and 21 per cent respectively in the last six years, thanks for the fierce competition among the large corporates.

An Assocham study, however brought out that the marketing expenses in proportion to the sales have undergone a substantial fall during the period 2000-06.

The FMCG firms, which used to be fervent advertisers in the past, have marginally hiked their ad budget by two per cent.

The next big spenders after real estates and telecom are white goods manufacturers, especially air conditioners and refrigerators, liquor and passenger and multi-utility vehicles companies.

The maximum increase among these segments was accounted by white goods producers with a 20 per cent increase, followed by a growth of 10 per cent in the liquor industry and 9.5 per cent in passenger car companies.

''With services becoming the driving force 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,'' said Assocham President Venugopal N Dhoot.

Rising income levels, bulging middle class, rapid urbanisation, emerging cities has led to sharp rise in demand for housing properties in India and has thus boosted the advertising needs of the construction and real estates companies.

The growth in the advertising spend of these companies has surpassed marketing as well as the total expenses, which averages around six per cent and 12.8 per cent respectively.

The telecom sector is also growing fast, with the number of total mobile subscribers growing at an average rate of 46 per cent per month, while the total telephone subscriber base reached 225.2 million with 136 million GSM mobile users and 49.1 million CDMA users.

Intense competition and huge growing youth population as target customers for the telecom companies is leading to rising advertisement and marketing expenses by them, the study says.

The advertising expenses in the telecom sector have risen from 0.9 per cent of sales to 1.9 per cent in the seven-year period.

UNI