Nepal does not have a long history of advertisement. It began in 1901 when Gorkhapatra started publication
Concept of business advertising came into being during the early nineteenth century. With technological advancements, advertising business has evolved fast in the recent times. But in the early days, advertisements were meant for informing the public of certain events in their respective neighborhoods. Then they began to appear in print media followed by electronic media, digital media and, since the late 2000s, in social media. With this overall purpose of advertising also changed.
Advertising has now become a major industry in itself. With the increase in number of print media outlets, television broadcasters, radios and digital platforms, advertising has remained an ever-evolving industry of our time.
Nepal does not have a long history of advertisement. It formally began in 1901 when Gorkhapatra started publication. In those days the newspaper carried advertisements to inform citizens and other stakeholders of government’s public announcements, programs and policies.
After 1990’s change, advertisements from private sector also began to appear in major newspapers. During 1990s and 2000s, the Nepali advertisement industry went through major overhaul after additional newspapers and radios were established with private sectors investment. With easy access to internet, advertisement started to appear online as well.
Today advertisements are not limited to newspapers, radios and televisions. Local and global companies promote and sell their goods and services online. From confectionary to the accessories that we wear, to the banking and financial institutions we have our accounts with, Nepali consumers are highly reliant on advertisements for getting information on all major products and services.
According to one estimate by Advertising Association of Nepal (AAN), in the fiscal year 2015/16 alone, the total turnover of Nepal’s advertising industry was around Rs.5 billion. During the same fiscal year, about one billion rupees was spent for advertisements in various sources. It is estimated that the same year Rs. 250 million was spent on hoarding boards while Rs. 240 million was spent for print media followed by advertisements on televisions, radios, online portals and digital display. These later platforms witnessed investment of Rs. 100 million, Rs. 100 million, Rs. 150 million and Rs. 4 million respectively.
The United States is by far the largest advertising market globally. In the year 2017, the advertising spending in the US was was 207 billion dollars. Television used to be the biggest advertising medium in the US but the recent statistics show that television media has lost its market owing to digital platforms. This is because TV viewing habits of people in the US and outside has been declining.
With easy access to internet, people are switching to internet and social media platforms to seek information about their desired goods and services. As a consequence, digital advertising spending has seen an unprecedented growth.
In the US, for example, around 83 billion dollars was spent for digital advertising in 2017. The digital ad spending was forecasted to be 30.9 percent in previous year. The revenue from the digital advertising industry is expected to exceed 106 billion dollars mark in 2018.
China is the second largest ad market in the world. It spent around 84.4 dollars for advertising in 2017. Future investments in China’s advertisement industry are expected to flourish further. The revenue in digital advertising in China is expected to reach more than 75 billion dollars in 2018. The revenue from social media advertising stood at 8.2 billion dollars in 2017. This figure is expected to reach 11 billion dollars this year.
In Nepal, we lack authentic data to accurately gauge actual size of country’s advertising industry. This limits our capability to assess the net growth of nation’s advertising industry and we fail to provide evidence-based insights to institutions to plan and invest on the cost-effective advertisement activities.
Though we have AAN, the single and the largest umbrella organization of all major Nepali advertising agencies, in place yearly statistics regarding growth, spending and revenue of and from advertising industry are not publicly available.
But even by observing the trend, it can be said that our advertising industry is changing, following the global trends. According to the recent MIS Report published by the Nepal Telecommunication Authority (NTA), as of 2017 end, 16.6 million Nepalis have access to the internet.
This shows more and more people go online and access whatever information is available there. Many private companies, food and service sector industries promote their products through social media and other online platforms.
Despite this, Nepali advertising industry is still dominated by print media. The last update from AAN indicates that the print media ruled the country’s advertising industry with 47 percent in the year 2015/16. The same year, television and radios each had 19 percent of share in the advertising industry while online portals, social media and other digital media platforms had a share of meager five percent.
Nepali advertising industry is evolving and there are enough rooms for local stakeholders to switch to online and social media platforms to reap the benefits they offer. This will raise Nepali ad industry at par with local consumers’ changing information seeking behaviors. They will also be able to tap opportunities at any regional and global markets.
The author is a resident graduate research fellow at King’s College, Kathmandu