Digital advertising expenditure (AdEx) has doubled over the last couple of years in size from `16,974 crores to `34,405 crore in 2022, according to the Pitch Madison Advertising Report. Last year was also the first time when digital advertising, with a 38% share of the AdEx overtook TV advertising, which was at 34%.
India’s AdEx reached `89,803 crore in 2022, registering a growth of 21% over the previous year. India’s advertising growth story is fairly bright compared with the global AdEx growth rate, which according to WARC, the leading global source of advertising trends, was only 8% in 2022. Digital advertising saw a growth of 35% in 2022 but it was AdEx on traditional advertising (which includes TV, print, radio and outdoor advertising) which dominated with 62% growth. This is unlike the global scenario, where the digital share in growth was much higher at 68%. What was also positive for traditional media in 2022 was the fact that it finally crossed the pre-pandemic mark of `52,136 crore in 2019 to reach `55,399 crore last year. The audio visual medium, which included linear TV and digital video, contributed to 45.6% of the total ad spending.The report predicts that advertising spends will grow by 16% this year to reach `1.04 trillion with digital taking 41% of the pie, followed by TV at 32% and print at 19%.
Digital will fuel advertising in 2023, and is expected to record a 25% growth to reach `43,036 crore. Outdoor advertising, radio and cinema advertising are expected to clock 4%, 2% and 1% growth respectively.
Video, social, display, e-commerce and search are the key drivers for digital advertising. Digital video continues to dominate the digital AdEx with 40% growth and a 30% share. While Google and Facebook account for the lion’s share of digital ad spending, Amazon and Flipkart account for almost 80% of e-commerce spends.
The report notes that the forecast for India continues to be positive despite looming recessionary concerns. While globally, advertising is expected to grow by 3%, India will grow five times faster. Noting that India’s growth story is a bright spot in an uncertain global environment, Sam Balsara, chairman at Madison World said, “Our AdEx has grown by leaps and bounds in the last three years marked by Covid and the war, except in 2020. However, Indian consumers’ media habits are rapidly changing and this is reflected in our AdEx numbers and commentary. Advertisers who ignore these changes will do so at their own peril.”
Among the advertisers, FMCG continues to be the largest advertising category, though its share has moved down from 38% in 2020 to 32% in 2022. The report notes that the top five advertisers last year were HUL, Reckitt, Reliance Industries, Dream11 and Mondelez. There are only 11 start-ups among the top 50 advertiser list as opposed to 15 last year, with VC funding drying up. TV and advertising continue to be popular media for the top 50 advertisers, accounting for 87% of their spending.