BILLION DOLLAR BABY


Spread over five weeks and nine polling days, 800 million Indians will be voting from 930,000 polling booths using 1.7 million electronic voting machines. Around 11 million security forces personnel and 5.5 million civilians will manage what is the world’s largest democratic exercise. If you thought Indian elections were grand, then the run up to it is even grander, Rekha Roy finds out

From Modi room fresheners to NaMo tea mugs and 3D fans alternating between the faces of Rahul Gandhi and Sonia vikasGandhi at the flick of a switch, poll paraphernalia have undergone much innovation since 2009. The 200 odd traders in the capital’s Sadar Bazaar are busy taking orders from political parties all over the country, mobile phones clapped to their ears. The small shops on the congested street are jam packed with hand fans and bangles, traditional flags and 3-D calendars stickers and bike flags. Walking along the streets, looking at the busy shops, one knows that the election season is here.
15-1In 2009, the campaign material market was estimated to be worth over Rs 100 crore. Today, the fast rise of the social media and online advertising has slowed it down much but it is still worth a hefty Rs 50 crore. And there was a time, not very long back, say in 2009, when India went to the polls the last time, when this would be a major chunk of campaign spending (apart from the usual cash handouts for votes and other forms of electorate bribery). However, circa 2014, the scenario is much changed.
In the weeks leading up to India’s most anticipated general elections that begin on April 7, Indian politicians are expected to spend around $5 billion for campaigning, a study by the Centre for Media Studies had revealed in March. In terms of expense, this is second only to the American Presidential elections – the most expensive in the world, which cost around $7 billion in 2012. Within the country too, this is a sharp increase from 2009 – when the last general elections were held – when the total spending had stood at Rs 10,000 – Rs 15,000 crore. This $5 billion too, experts say, is a conservative estimate. A large part of the spending will be in cash, which makes it tougher to track the actual amounts being spent, says N. Bhaskara Rao, director of the Centre for Media Studies.
“Every election typically is more expensive than the last one – purely due to inflationary factors. If we assume a 10 per cent annual inflation over the past 5 years and similar real spending, the Rupee expenditure will be 61 per cent higher. Apart from that, (based on anecdotal evidence), the number of candidates per seat appears to have increased,” says Arun Jethmalani, director of market research firm, ValueNotes. “This should automatically result in an increase in total spend.”15-3
Conservative estimate and inflationary reasons aside, the mere scale of the expenses is making the Indian economy buck up in anticipation. This expected influx of billions of dollar is good news for the country’s flailing economy especially as growth has slowed down to a decade’s low of 4.9 per cent. Sectors like advertising, air charter services, security services, food and beverages, transport, liquor, fuel and automobiles and the media and entertainment industry are expecting a major impetus 15-2due to the elections.
“The major expenses, around 20-25 per cent – will be going towards media campaigns and this includes printed material, television, new media etc.,” Rao says.
In 2009, political parties spent around Rs 500 crore on advertising campaigns. In 2014 polls they are expected to spend around Rs 2,000 crore. Media reports say, the Congress alone plans to spend around Rs 500 crore for its poll campaign, out of which it has allocated Rs 400 crore for its mass media ads, which include television, print, radio, outdoor and digital and around Rs 100 crore for on-ground activities.
An Indian media and entertainment industry report by FICCI-KPMG says, “increasing digitisation across sub-sectors of M&E industry, rate increases in TV, channel packaging by MSOs, innovative strategies to monetise digital content, rapid growth of new media powered by increasing smartphone penetration, and campaign spending during the general elections are likely to be the key levers of growth for the Indian M&E industry in 2014.”
The other sector where political parties will be spending a lot of money is social media. With 37 per cent of voters being online, social media is fast becoming the preferred medium of connecting with voters for most political parties. From Google Hangouts to WhatsApp, from Twitter to Facebook advertising, political parties this year are leaving no stones unturned to reach this fast evolving, mostly young vote bank. According to an October report by the Internet and Mobile Association of India (IAMAI) and market research firm IMRB, political parties set aside around two to five per cent of their election budgets for spending on social media.
Technology companies like Google Inc., for example, expects their online advertising revenues to rise 10 to 20 times than in 2009 as political parties spend more money on digital media than in the previous general election. “We have seen a huge raise in political digital advertising spend this year, almost 10 to 20 times up from 2009,” says Gaurav Kapur, industry head, Google India.
A Pitch-Madison report (Pitch-Madison Media Advertising Outlook 2014) estimates the Indian advertising market to grow 16.8 per cent in 2014 to Rs 37,000 crore. 15-4The market grew 11.1 per cent in 2013 to Rs 31,877 crore, the report said. “50 per cent of this projected growth is on account of elections, the Lok Sabha elections, 5 Assembly elections, advertising by political parties for the above, advertising by individual candidates for
the above,” says Sam Balsara, chairman and managing director,
Madison World.
According to the annual advertising expenditure report from GroupM, digital advertising was 6.5 per cent – up from 5.5 per cent in 2012 – of the total media advertising expenditure in 2013. The agency estimates that digital media advertising revenues will grow by 35 per cent to Rs 3,402.2 crore ($546 million) in 2014, representing around 7.9 per cent of the total media advertising expenditure in 2014, which is estimated at Rs 43,065.4 crore, driven by election spending by the government and political parties across all media.
The report had predicted that the general polls next month will add some Rs 25 billion to advertising revenues in India this year, up from Rs 5 billion in 2009. The rates for political advertising, the report says, is at least 30 per cent higher than average. However, the biggest gainer will be the print media which continues to be the focus of poll campaigns. Digital media still has a long way to go to catch up with the print media as Internet penetration in the country is still small. Despite the positive outlook, digital media advertising was just a Rs 30.1 billion industry in 2013, compared with print media which is valued at Rs 162.6 billion.
Apart from these obvious sectors, there are fringe sectors too which benefit from India’s grand poll pantomime every five years. Rao points out that betting on who wins or which party gets what number of seats is yet another transaction that is reported on the eve of Assembly and Lok Sabha elections. This too would be in hundred of crores. “This happens across the country close to the polling dates and in between the day of polling and day of counting. Although this is less to do with the core of elections as such, the fact that it is often reported prominently in the news media tend to influence voter perceptions and expectations,” Rao says. “With extensive use of social media now, satta bazaar centered betting is likely to receive a boost.”
All said and done, however, the Indian polls are a grand equalizer – from the small trader in Sadar Bazaar to multinationals like Google – it brings big booties for all.
Democracy, after all, is a billion dollar baby.

FacebookGoogle+TwitterWhatsApp