Advertising industry witnessed a de-growth of 17.5% in 2020: dentsu

With the country coming to a standstill amidst the Covid-19 induced lockdown, the Indian advertising industry witnessed a de-growth of 17.5% over 2019, a study conducted by dentsu international revealed. The advertising industry, which currently stands at Rs 56,490 crore, is expected to make a come-back and will grow by 10.8% to reach Rs 62,577 crore by the end of the year 2021. Furthermore, it is expected to grow with a CAGR of 11.59% to reach Rs 70,343 crore by 2022.

As per the report, the digital advertising industry has witnessed growth in market size from Rs 13,683 crore by 2019 to Rs 15,782 crore by 2020, growing by 15.3% from the previous year. Digital media will grow at 20% to reach a market size of Rs 18,938 crore by 2021 and with a CAGR of 22.47% to reach Rs. 23,673 crore by 2022, the study said. “2020 presented a monumental challenge to us – as individuals, business and society. We, at dentsu, expect 2021 to witness a colossal rise in digital advertising,” Anand Bhadkamkar, CEO India, dentsu, added. The biggest spenders on digital media are BFSI (57%), consumer durables (45%), telecommunications (40%) and e-commerce (39%).

The study highlighted that television has an unparalleled reach in the media market and contributes to the largest share of media spends at 41% (Rs 23,201 crore) in 2020. Followed by spends on digital (28%, Rs 15,782 crore) and print (25%, Rs 13,970 crore).

Furthermore, FMCG has the highest expenditure on advertising with a contribution of 20% at Rs 11,554 crore closely followed by e-commerce of 17% at Rs 9,788 crore and consumer durables of 10% at Rs 5,751 crore. FMCG spends a large majority of their advertising budget on television (64%) while retail, automotive and media and entertainment segments spend a large share of their advertising budget on print.

The report also stated that the rapid increase in mobile usage and internet penetration has led to 75% (Rs 11,836 crore) of digital media spends on mobile devices. Majority of the online expenditure on mobile devices goes to online video 29% (Rs 3,458 crore) and social media accounts for 29% (Rs 3,429 crore). People belonging to tier-II and tier-III cities have contributed the most to the growth of the digital advertising market, the study noted.

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