Digital advertising to grow at 32% CAGR to reach Rs 19,000 crore by 2020: Report
, ET Bureau|
Updated: Jan 16, 2018, 10.58 PM IST
MUMBAI: The digital revolution in India, driven by the roll out of 4G, reducing data costs, increasing smart phone penetration and increasing time spent on mobile phones, will ensure that digital advertising will also grow at a faster clip as against the the traditional media over the next three years.
According to a report on digital advertising by Dentsu Aegis Network, the Indian digital advertising industry, currently pegged at around Rs 8,202 crore, is slated to see a growth at 32% CAGR to reach Rs 18,986 crore by 2020.
The report also forecasts that digital media spends, currently contributing 15% of the total advertising pie, will reach 24% of the entire market by 2020.
Furthermore, the increasing penetration of digital media among the Indian audience is creating huge opportunities for marketers to reach out to untapped audiences in newer ways, the report highlights. With the gamut of opportunities to interact with consumer broadening, marketers are getting innovative with the way they choose to advertise to their audience.
"Digital is no longer a medium, but a way of doing business," said Ashish Bhasin, CEO-South Asia at Dentsu Aegis Network. "The digital transformation is affecting every business and agencies and marketers and whoever doesn't recognise this will be left behind. Digital is a behavioural change taking place with the consumers, not just a way of building a brand. This is a critical difference many don't understand."
In its second edition, the report covers digital trends, spends and insights across all sectors.
Among different sectors, the report points out that ecommerce is the biggest spender on digital media, contributing 19% of all digital spends, followed by FMCG, telecom and BFSI.
Ecommerce and telecom spends on digital are also the highest as a percentage of their overall ad spends.
Brands, the report said, are slowly shifting their marketing budgets to digital platforms as the digital medium becomes all pervasive and consumers increase time spent on this medium.
"Even though digital ad platforms have been instrumental in direct sales, so far they do not match up to traditional media when it comes to brand building. Brand building is largely happening through mature ad mediums such as TV rather than digital. But marketers are moving from purely mass-targeting platforms to a mix of traditional and digital platforms," the report said.
Interestingly, within digital, social media currently takes the lion's share of ad spends at 28%, said the report. Search and Display constitute 26% and 21% of the pie, respectively, while Video has a 19% share.
However, the report predicts that Video is expected to see the highest CAGR of 38% and will have a share of 22% by 2020. Spends on display are expected to grow at CAGR of 36%, while social media is expected to grow at 34% CAGR. Search, however, will see a slower growth rate of 25% with its share in spends reducing from current 26% to 22% by 2020.
When it comes to devices, India is clearly becoming mobile-first internet economy and spends on mobile are expected to grow at a CAGR of 49% to overtake spends on desktops and reach a share of 60% by 2020, said the report.
As per Trai estimates, the Internet population in the country will be close to 740 million by 2020, from the current 430 million (300 million urban, 129 million rural subscribers). And in the near future, video content along with the engaging mobile experience, voice-based interactions, transformations in payment mechanisms, etc will drive the growth of digital media further.
Key highlights:-
Digital advertising growth
* 2017: Rs 8,202 crore
* 2018F: Rs 10,851 crore
* 2019F: Rs 14,354 crore
* 2020F: Rs 18,986 crore
* Biggest spenders - E-Commerce, FMCG, Telecom and BFSI
* Digital ad formats - Social media -28%, Search -26%, Display - 21%, Video - 19%
* 21% of the Indian population accesses Internet daily by 2017
* 85% of the Internet user base spends up to 1/4th of their waking hours on the Internet.
According to a report on digital advertising by Dentsu Aegis Network, the Indian digital advertising industry, currently pegged at around Rs 8,202 crore, is slated to see a growth at 32% CAGR to reach Rs 18,986 crore by 2020.
The report also forecasts that digital media spends, currently contributing 15% of the total advertising pie, will reach 24% of the entire market by 2020.
Furthermore, the increasing penetration of digital media among the Indian audience is creating huge opportunities for marketers to reach out to untapped audiences in newer ways, the report highlights. With the gamut of opportunities to interact with consumer broadening, marketers are getting innovative with the way they choose to advertise to their audience.
"Digital is no longer a medium, but a way of doing business," said Ashish Bhasin, CEO-South Asia at Dentsu Aegis Network. "The digital transformation is affecting every business and agencies and marketers and whoever doesn't recognise this will be left behind. Digital is a behavioural change taking place with the consumers, not just a way of building a brand. This is a critical difference many don't understand."
In its second edition, the report covers digital trends, spends and insights across all sectors.
Among different sectors, the report points out that ecommerce is the biggest spender on digital media, contributing 19% of all digital spends, followed by FMCG, telecom and BFSI.
Ecommerce and telecom spends on digital are also the highest as a percentage of their overall ad spends.
Brands, the report said, are slowly shifting their marketing budgets to digital platforms as the digital medium becomes all pervasive and consumers increase time spent on this medium.
"Even though digital ad platforms have been instrumental in direct sales, so far they do not match up to traditional media when it comes to brand building. Brand building is largely happening through mature ad mediums such as TV rather than digital. But marketers are moving from purely mass-targeting platforms to a mix of traditional and digital platforms," the report said.
Interestingly, within digital, social media currently takes the lion's share of ad spends at 28%, said the report. Search and Display constitute 26% and 21% of the pie, respectively, while Video has a 19% share.
However, the report predicts that Video is expected to see the highest CAGR of 38% and will have a share of 22% by 2020. Spends on display are expected to grow at CAGR of 36%, while social media is expected to grow at 34% CAGR. Search, however, will see a slower growth rate of 25% with its share in spends reducing from current 26% to 22% by 2020.
When it comes to devices, India is clearly becoming mobile-first internet economy and spends on mobile are expected to grow at a CAGR of 49% to overtake spends on desktops and reach a share of 60% by 2020, said the report.
As per Trai estimates, the Internet population in the country will be close to 740 million by 2020, from the current 430 million (300 million urban, 129 million rural subscribers). And in the near future, video content along with the engaging mobile experience, voice-based interactions, transformations in payment mechanisms, etc will drive the growth of digital media further.
Key highlights:-
Digital advertising growth
* 2017: Rs 8,202 crore
* 2018F: Rs 10,851 crore
* 2019F: Rs 14,354 crore
* 2020F: Rs 18,986 crore
* Biggest spenders - E-Commerce, FMCG, Telecom and BFSI
* Digital ad formats - Social media -28%, Search -26%, Display - 21%, Video - 19%
* 21% of the Indian population accesses Internet daily by 2017
* 85% of the Internet user base spends up to 1/4th of their waking hours on the Internet.
