India: Strife Between The Advertising Industry And The Fastidious Indian Consumer

"Advertising is legalized lying"- H.G Wells

Advertising Industry is the second fastest growing industry, both in Asia and in India. Over the time, it has evolved from being a small scale business into a large scale industry. There is no doubt that advertising is now a key player in global trade and commerce, hence there have been speculations regarding the ambit of advertising and where it tips the line to be unfair trade practice. The exposure and frolicking reach of advertisements in all its varied forms i.e. Print, Television and Digital was unprecedented to many. The purpose of this article is to put forth the expanse and global impact of advertising in the current scenario, its potential growth in the coming times and the consumer's perception of the same.

Global Sketch on Advertising

It would be factually appropriate and correct to state that the advertising is now a billion dollar industry. In 2010, the global expenditure on advertising was 412.54 Billion US Dollars. In 2012, sources predicted global advertising spending would amount to anywhere between 438 billion U.S. dollars and 542 billion U.S. dollars. United States is the biggest advertising market, with a projected spending of around 166 billion dollars in 2012. The estimated expenditure for 2017 is 547.37 Billion US Dollars which is expected to rise to a gargantuan 724.06 Billion US Dollars in 2020.1

Consumer trust in advertising mirrors to a certain extent the amount of money invested in different advertising mediums, every second person says they trust TV ads and e-mails they signed up for. Television has been the most relevant medium for advertising despite the advent of digital video providers like Netflix. Despite the fact that television industry has undergone a sea change over the last few years and it continues to maintain its importance in the field of advertising. Surprisingly, other types of online advertisements (which include the much hyped ads on social media) score much lower, with only one in every three consumers trusting online video or display ads. One reason for it can be that Television is the most powerful means to send a message and the audience it reaches is wider than digital media. Statistics depict that the advertising industry spending worldwide is growing at lightening speed. In 2009, the expenditure worldwide was roughly 350 billion US dollars, which is expected to rise to 500 Billion US Dollars in 2017 and sky rocket to a whopping 600 Billion US Dollars by 2019. The statistics further display that the growth rate of advertising spending from 2013 to 2017 has grown by 4.4 % but there will be a lull in it by .2% in 2019.2

Statistics also display that in 2015, personal recommendations were the most trusted form of advertising with 83% of respondents stating that they somewhat or completely trusted recommendations they got from friends and acquaintances. In 2015, 66% of the respondents claimed to rely on Consumer opinions posted online for products and services establishing it as another significant medium for advertising.3

Advertising & Marketing in India

Keeping in view the Digital India dream of P.M. Modi, the Indian Government has extended tremendous support to the advertising and marketing industry. The government has announced initiatives to push digitization in rural areas which will connect more people on the internet. The mammoth rise of advertising expenditure is likely to have a significant impact on the financial sector, resulting in change of policies by the Reserve Bank of India (RBI) which could result in a more favorable work environment for multinational companies investing in marketing and advertising. Also, proposed licenses for new banks and better market sentiments render the advertising and marketing industry fertile.

Print contributes a significant portion to the total advertising revenue, accounting for almost 41.2 per cent, whereas TV contributes 38.2 per cent, and digital contributes 11 per cent of the total revenue. Outdoor, Radio and Cinema make up the balance 10 per cent. India's digital advertisement market is expected to grow at a compound annual growth rate (CAGR) of 33.5 per cent to cross the Rs 25,500 crore (US$ 3.8 billion) mark by 2020.

The Internet's share in total advertising revenue is anticipated to grow twofold from Eight per cent in 2013 to 16 percent in 2018. Online advertising, which was estimated at Rs 2,900 crore (US$ 435 million) in 2013, could jump threefold to Rs 10,000 crore (US$ 1.5 billion) in five years, increasing at a compound annual rate of 28 per cent.4

Judicial stance on Advertisement

On perusal of the data provided above, it's observed that the Multi National Companies around the globe are making humongous investments for advertising and marketing. Subsequently, the National Consumer Redressal Commission and the State Consumer Forums have seen a rise in cases pertaining to puffery and hyperbole in advertisements.

In Colgate Palmolive Company & Anr V/s Hindustan Unilever Ltd reported at 206(2014) DLT 329, the Hon'ble High Court of Delhi held, that a certain amount of disparagement is implicit and as long as the advertisement is limited only to puffing, there can be no actionable claim against it. Also the law laid down by the Hon'ble Delhi High Court in Dabur India Ltd. V/s Colortek Meghalaya Pvt. Ltd. and Godrej Sara-Lee reported at 167(2010) DLT 278, that, what the courts need to consider in such cases is whether the impugned advertisement is "by and large truthful" and that an advertiser must be given enough room to play around in the grey areas in the advertisement brought out by it and that the plaintiff ought not to be hypersensitive.

Further, in Marico Ltd. V/s Adani Wilmar Ltd reported at CS (OS) Nos. 246 and 319 of 2013, It was held that in determining meaning of an advertisement, the Court has to take into account fact that the public expects a certain amount of hyperbole in advertising and test to be applied by the reasonable man would take claim being made as one made seriously. In this courts opinion comparative advertising is legal and permissible as it is in interest of vigorous competition and public enlightenment. Moreover failure to point out a competitor's advantage is not necessarily dishonest.5

A notable judgment reported in McDonalds Hamburgers Ltd. Burger king (UK) Ltd. [1987] F.S.R 112 warned that, advertisements are not to be read as if they were some testamentary provisions in a will or a clause in some agreement with every word being carefully considered and the words as a whole being compared.

Lastly in Monopolies and Restrictive Trade Practices Commission observed in  McDowell and Co. Ltd V/s Unknown reported at 7 February 1997,  that an element of humor or hyperbole contained in advertisement cannot be held to be  a misrepresentation but its just a matter of "puffing up".

Conclusion

On scrutiny of the statistics provided above, it would be safe to say, that the colossal expenditure in advertising has a significant impact on a global platform and this is anticipated to rise in the near future. The consistent growth of the advertising industry has made the Indian Consumer more aware and knowledgeable of various market trends. If India's digital advertisement market is expected to cross the US $3.8 Billion mark by 2020, one can imagine the ascend in consumer complaints our forums will experience. Further, the perceptiveness of the Indian and Foreign Courts exhibits its acknowledgement and true understanding of the Advertising Industry. As observed, the precedent does not state that advertisements are to be liberated and succored but instead appreciates the varied traits of an advertisement.

Can an advertisement be rigid and inexpressive in its representation? It cannot. The essence of an advertisement is in its humour and hyperbole, along with puffery being a necessary and accepted element for any advertisement. The primary characteristic of an advertisement is its creativity. Creativity which does not entail false information or false projection of goods and services but rather fuels the purpose of being eye-catching for the Consumer. Lamentably, the nature of an Indian consumer has become scrupulous and finicky.

Footnotes

1. https://www.statista.com/statistics/236943/global-advertising-spending/

2. Growth of advertising spending  worldwide 2017- www.statista.com

3. https://www.statista.com/statistics/236943/global-advertising-spending/

4. https://www.ibef.org/industry/advertising-marketing-india.aspx

5. https://indiankanoon.org/doc/131750016/?type=print

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.