Tenish's Blog: Advertising Practices in Nepal

Introduction:

Advertisement has become a part of the media in the contemporary world. An advertisement is a paid-for communication intended to inform and or persuade one or more people. The term advertisement is derived from Latin word” Advertiser” which is means to turn the attention of somebody towards something. However, the meaning of advertisement has been changing over the period of time. Traditionally, concentration of people on particular issue was taken as advertisement but it has wide varieties of meaning referring a branch of mass communication. In fact advertising is also mass communication in which particular goods, service or ideas buy specific time or space of media and gives their own promotional information. It does not mean advertiser can disseminate false and misleading information. Even if advertising is done for persuasion it has certain ethical constraint and responsibilities towards society.

Advertising includes those activities by which visual or oral messages are addressed to the public for the purposes of informing them and influencing them either to buy merchandise or person featured. As contrasted with publicity & others forms of propaganda, advertising message are identified with the advertiser either by signature or by oral statement.

The American Marketing Association defines “Advertisement as any paid form of non-personal presentation and promotion of ideas, goods and service by an identified sponsor.” Similarly Kotler defines” Advertising as any paid form of communication which is done to establish particular goods, service or idea and to make salable in the society”.

Advertisement is all about persuasive, commercial, and marketing communication. It is to influence the potential audience. Advertisement is not only to inform the audience but also to remind the people about the goods and service. Today advertisement has become big business in the world. It is one of the important sources of income and revenue to the nation and media house. No media house can sustain without advertisement. Advertisement is planned business process where advertisers, advertising agency, advertisement media, vender and audience market have key role in this process.

History and advertising practices in Nepal

Nepal being starting developed after long time then other country. Media, industry, organization and other company and institution also started delay. When the industry and government institution were growth as systematic then advertising market also increase slowly in Nepal.

Nepal advertising sector is going on randomly with different challenges. It faced the various obstacles, although it is increasing and making an institution field. We can see and analyze it in three parts;

Pre-2007 BS (pre-1951 AD):

Nepal’s first printed form of advertisement in Nepali language was published in a cover page of a book called Mokshashiddi, by Krishna Giri in 1919 BS. This advertising announced another book being brought out by Nepal Manoranjan Press, which is the only authentic document on advertisement of Nepal. Likewise, the second advertisement was found published after twenty-six years in 1945 BS. It was announcement of forth coming monthly publication ‘Gorkha Bharat Jivan’ in the cover page of book ‘Hasya Manjari’ printed from Baneras. One of the most important and influential advertisements in Nepal was published during 1950s BS in Sudha Sagar, considered as the first newspaper of Nepal announced the publishing of a book viz. ‘Nalopakhyan’.

Gorkhapatra appeared on 24th Baishak, 1958 as a weekly newspaper; in its first publication it published the rate for advertisement in the paper. We can say that advertisement was recognised as the source of revenue for the media even while publishing Gorkhapatra. Since then, in the name of public notices, government orders and sanad advertisements were seen in the newspaper. The first commercial advertisement was published in Gorkhapatra in 1984 BS. The advertisement thanked Shree 3 Maharaj and announced on the opening of new petrol shop. In 1985 BS, another commercial advertisement was published in the name of ‘The Himalyan Motor Trading Company’. Bhet Narayan of Kathmandu provided both the above advertisements.

Period 1951-1990 AD (2007-2046 BS)

The Rana Regime came to an end on 7th Falgun, 2007 BS. This resulted in the establishment of democratic system in the country. The new political system in the country brought significant changes in media, especially towards the rise in quantities of newspapers and rise in readership, these factors created an environment for advertising in the newspapers. But lack of industrialization and economic development in the country made it difficult for the publications to get independence and develop professionalism. The newspapers were either supported by the political parties or were government owned.

A Press Commission was formed to in 1957 and reported that “Newspapers need to be given government advertisements of government offices, departments and secretariats.” After the election of 2015 BS, the government of B.P. Koirala supported the newspaper categorizing into four levels. The government started providing government advertisement to the newspapers from 16th Magh 2016 providing monthly amount Rs. 600 to Rs.200 by Information Department. This policy was continued even during the Panchyat System introduced in 2017 BS. Advertising in radio started after the establishment of Radio Nepal on 27th Chaitra, 2007 BS. The advertisement broadcast in the radio was charged according to words.

In 2027/2028 music was used for advertising. The early advertising was mostly broadcast live but after the construction of Photo-concern studio, advertisement was then recorded here. Likewise, Ratna Recording Sansthan operated advertising service in the country and paid the total cost. Television advertising started after the establishment of Nepal Television on 17th Magh, 2041, test transmission was conducted from 29th Shrawan 2042 to 14th Poush 2042. During this period advertising was broadcast from the Nepal Television.

Likewise, advertisements were also broadcasted through cinema halls. The cinema halls started in 2006 BS. The advertisements were in the format of slides. Advertising Agency also supported the development of advertising in Nepal. ‘Nepal Advertisers’ was the first advertising agency established in 2017 by Laxman Upadhya. It provided artistic and attractive advertisement to the newspapers.

Likewise, Shree Keshav established the second advertising agency in 2020 Lamichane viz. Nepal Printing and Advertising Agency. This agency handled ads of some major clients such as Janakpur Cigarette Factory, Royal Nepal Airlines Corporation and Nepal Bank Ltd. In 2022 BS Kishor Shrestha established International Advertising Service as third advertising agency. In the period between 2007 and 2046, Nepal faced two systems of ruling i.e. the Democratic System from 2007-2017 and the Panchyat System of ruling from 2017- 2046, in the direct control of the king. During both periods the government in the country, in the name of providing assistance to the newspapers and to make the newspapers impartial wanted to influence the newspapers. Advertising could be one of the means to gain support from the media.

After 1990 AD (2046 BS)

The situation after the restoration of democracy in 2046 (1990) paved the way to the development of private media. The open economic and market policy, international relationship, credibility of print media, rise in the number of newspapers and the electronic media all increased the volume of advertising. Today advertising has been recognized as the cornerstone for development of media.

The rise in newspapers, FM radios television channels and online after 1990 has brought competition in the media in search for more advertisement. Towards the beginning of 1990s government owned media were main hosts for advertising products because of their large circulation, reach and capacity. But after the decade of 1990’s, the rise in private media has enlarged the market and transaction of advertisement. However, there have not been significant studies on the market of advertising in Nepal even today.

According to AAN, there are about 500 advertising agencies in the country, among them only 100 ad agencies are functioning. But the transaction in advertising agency is of vast difference. The ad agency has 40 to 45 per cent of total advertising share. There are about 10-11 big ad companies, which have full capacity to produce advertising for print, audio and visual. The economic condition of the country determines the advertising industry, due to economic crisis advertising has decreased by 10-15 per cent in the present situation, and one of the reasons is the Maoist conflict. But if this trend of economic setback continues with the existing numbers of media, it is difficult for media to sustain with the present advertising turnover. Research in advertising is the major factor that helps boost the product using the particular media, to reach the target group. But the research trend in advertising is negligible. It could be because launching the product through the research process is very costly. It is also because of lack in research many advertisements produced by the many of the companies and the government ads are banned.

Modern Advertising Scenario in Nepal:

Four hundred 50 radio has registered and 50 over Television has taken license. About a dozen National Daily is publishing from capital city. So, one hundred 50 online has registered in press council. Despite the rise in the number of media, the advertising market is very small for the sustenance of the media in operation.

If we see rise of the Nepali media, without quality and professionalism sector, the media growth rate is not behind but advertisement industry is couldn't became full phase and professionalism in Nepal. Country is facing various political and others obstacle so last decade industry and factory couldn't increase in Nepal. It directly hampers in advertisement industry and negative effect faced mass media.

The dwindling economic condition in Nepal has affected the advertising industry. However it is interesting to observe the growth of advertising industry. Advertising Association of Nepal (AAN) pointed out a ceiling on advertisement spending for insurance, education sectors, political stability, lack of industrial growth and load-shedding were major reason behind drop in advertisement revenue. However, concrete figure on the growth and degrowth of advertising market in Nepal is difficult to mark.

Since most companies benefiting from advertising are private and don't have to publish annual reports, as publicly traded companies are required to it is not easy to estimate exactly the growth of the business in Nepal. AAN, an umbrella organization of advertising agencies and other media related professional organization, estimates advertising volume in Nepal at RS. 4.3 billion on the fiscal year 2010/11 (kharel, select media topics)

Media	2004	2005	2006	2007	2008	2009/10	2010/11
Print	520	600	850	950	1150	1280	2015
TV	360	480	600	500	900	700	865
Radio	200	250	300	450	650	720	750
Online	*	*	*	*	*	*	40
Others	920	870	750	800	800	850	650
Total	2000	2200	2500	2990	3500	3550	4320

In Million (RS), Source: AAN

In the Nepali media industry, print media still are the biggest media sector in the generating ad revenue, which covers up to 47 percent shares among other media. The cost of buying advertising space in the print media is broadly based on the size, circulation and the quality of newspaper.

Television and radio advertising holds second and third positions respectively in terms of the ad business TV and radio are considered to be most effective media and the number of TV and FM Radio channels have significantly growth in number.

The print media stil are the biggest media sector in generating ad revenue, which covers up to 47 percent shares among other media. Kantipur daily holds the largest advertise, it holds about RS. 800 millions in the fiscal years 2011/12. After the kantipur, state owned media, gorkhapatra and Nepali republic media is major print media in advertising turnover.

Advertising turnover estimate amount in RS (Million)

In the broadcast media, the state-owned television station holds the largest ad revenue among the major television station in Nepal, accounting for 34.92 percent of the total TV ad. likewise Kantipur Television shared 29.9 per cent; Avenues TV holds 13.29 percent. This amounts to the four major TV channels sharing 90.3 percent of ad market in Nepal.

Conclusion:

Nepali media has significantly growth in number. Despite the rise in the number of media, the advertising market is very small for the sustenance of the media in operation. The context of Nepal print media still are the biggest media sector in the generating ad revenue, which covers up to 47 percent shares among other media.

Another part, advertisement industry is couldn't became full phase and professionalism in Nepal. Country is facing various political and others obstacle so last decade industry and factory couldn't increase in Nepal. It directly hampers in advertisement industry and negative effect faced mass media.

References:

Books:

Aryal, Deepak. K.C, Bhuban.Pathak, Tilak. (2070). Media Reader. Gagadhamba Publication: Patandhoka, Lalitpur.

Khanal, p (2013) Select Media Topics. TU, Kathmandu

Rai, Lal Deosa. (2014) Introducing Advertising: History, principles and practice. Bhrikuti Academic Publications: Kathmandu Nepal.

Online:

http://adage.com/article/special-report-the-advertising-century/ad-age-advertising-century-timeline/143661/

www.moic.gov.np

http://www.presscouncilnepal.org/