India's advertising market outlook is the brightest in Asia, as the country's media and entertainment business is expected to generate an annual spending growth rate of 19 percent through 2012, even higher than China's predicted 15 percent, consulting firm PricewaterhouseCoopers has predicted, the International Herald Tribune reported.

Most of the big names in Western ad agencies have been operating in India for years, but they now face new competition from smaller agencies. At least four boutique firms have recently opened, or announced plans to open, offices in India, including Portland-based Wieden + Kennedy, London-based Bartle Bogle Hegarty and Naked Communications, and New York-based StrawberryFrog.

These new players are trying to keep up with big advertisers, who are shifting more of their budgets to India and other fast-growing markets in Asia, and away from Western Europe and the United States, where economies are weakening, the IHT reported.

Marketers are aggressively trying new ways to reach Indian consumers, with different global media groups constantly expanding in the country. For example, last week News Corp. announced plans to spend US$100 million to start six new television channels in India.

However, the proliferation of media outlets also set the entry barrier much higher for individual brands to break through, which new businesses say they welcome.

“The media fragmentation that happened in Europe and the U.S. is happening there now. That gives us an opportunity,” said Scott Goodson, chief executive of StrawberryFrog, according to the IHT.

In the past, Indian manufacturers and retailers were mostly concerned with getting products into stores at low prices that consumers could afford. At that time, advertising was almost rudimentary, sometimes just adapted from the original international campaigns, the IHT reported.

Recently, however, marketers are trying to establish a long term relationship with consumers, rather than just to clear the latest inventories.

“The influx of the small agencies also reflects deeper changes in India, as a more sophisticated, consumer-oriented economy takes shape,” Anant Rangaswami, editor of advertising trade publication Campaign India, told the IHT. “The ambitions of young Indian entrepreneurs has changed ... they want to start brands afresh.”