After a difficult year due to the outbreak of the pandemic, there has been a v-shaped recovery in Indian businesses in 2021. As a result, the Indian advertising industry witnessed a recovery in ad spends to reach a market size of Rs. 70,715 crore at a growth of 18.6% compared to 2020. The industry is expected to reach Rs 93,119 crore by the end of 2023, growing at a CAGR of 14.75%, according to the latest report released by dentsu India. Moreover, the digital advertising industry reached a market size of Rs 21,353 crore in 2021 from Rs 15,782 crore in 2020, growing at 35.3%, owing to the accelerated business and consumer shift towards digital. Digital media is expected to have a 29.5% CAGR to reach a market size of Rs 35,809 crore by 2023.
“Notwithstanding the devastation caused by Covid-19’s second wave in 2021, we have seen a dramatic upsurge in digital in ways we have not seen before. Digital advertising in India is expected to equal (if not surpass) the previously-impregnable fortress of TV advertising by 2023, clocking in at Rs 35,809 crore out of an expected total advertising of Rs 93,119 crore,” Narayan Devanathan, chief client officer, dentsu India, said.
“Accelerating this trend and underscoring it, has proved that even in 2021, 75% of digital advertising spends was recorded on mobile devices – signalling mass India’s leapfrog into the digital era. With the requisite caution in the face of the varying strains of the pandemic notwithstanding, India will continue to rise in the global economy in the coming years, driven by digital. In that context, the importance and utility of a comprehensive, authoritative and trustworthy census of the digital-driven advertising landscape cannot be underestimated,” Devanathan added further.
The highest proportion of spends on digital media is currently claimed by social media with a 29% share of digital ad spend, closely followed by online Video with 28% share (Rs 5,907 crore). On the other hand, paid search accounts for 23% share (Rs 5,039 crore), while display banners account for 16% share (Rs 3,420 crore).
Although television claimed the largest share of media spending at 41% in 2021, the share of spends on television is expected to come down to 38% by the end of 2023. The spend share of print media is also expected to decline from current 23% to 19% during this period. Currently, FMCG has the highest contribution of 34% (Rs 23,736 crore) towards the Indian advertising industry, followed by e-commerce (14%, Rs 9,619 crore). The automotive and consumer durables segment contributed seven percent each.
The report also added that the changing consumer behaviour is paving the way for conversational commerce. Several new segments such as social commerce, video commerce, voice commerce and hyperlocal / Business to Consumer (B2C) commerce are emerging under e-commerce. Micropayment mechanisms will accelerate this evolution further, the report added.
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