Digital Ad Spends To Cross Rs 50,000 Crore By 2025: DAN-e4m Digital Advertising Report
Social media leads in digital media ad spends with BFSI being the biggest spender
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The DAN-e4m Digital Advertising Report growth projections for the digital advertising industry was unveiled today at The Lalit in Delhi. The report states that in 2020, the medium is expected to grow at 27 per cent to reach Rs 17,377 crore by the end of the year.
Backed by cheap data, internet penetration and digital adoption by consumers, digital advertising has been posting healthy growth numbers year after year. Despite the overall industry sentiment being dragged down by the economic slowdown, the medium managed to attract significant advertising spends in 2019. The optimism for digital advertising stays high even in 2020.
As brands, advertisers and consumers increasingly adopt and adapt to the digital landscape, its advantage – digital advertising. According to the report, there is more good news in store for the medium with digital media expected to grow at a CAGR of 27.42 per cent to cross the Rs. 50,000 crore mark and reach an industry size of Rs. 58,550 crore by the end of 2025.
Speaking on the report, Ashish Bhasin, CEO, APAC and Chairman, India - Dentsu Aegis Network said, “The Media and Advertising industry is shifting at a rapid speed and Digital is certainly taking charge. Consumers are leaving behind huge digital footprints and there is a lot more emphasis on managing data and developing martech capabilities, now. 2020 is expected to witness a major change in advertising in India, with digital becoming a bigger medium. In fact, by 2021, it’s growth should surpass that of print. Yet, despite this progressive swing, the industry has failed to come together to agree upon a common measurement metric for digital. As leaders in digital, Dentsu Aegis Network today stands at the forefront of this evolution and understands the need to have more information on Digital. The DAN Digital report, now in its fourth edition, is exhaustive, systematic, thorough and meets this need gap brilliantly. The report has now become the most credible source of information when it comes to digital in India.”
Adding to this, Anand Bhadkamkar, CEO, Dentsu Aegis Network India said, “2019 was a challenging year for the Indian advertising industry as well. With the economic slowdown, advertisers decided to cut back on spends, consumers decided to wait-and-watch, market sentiments reached a new low and India’s Ad Expenditure (AdEx) witnessed a consequential fall. But even in the midst of it all, digital continued to grow. Digital is a masterstroke in advertising and Dentsu Aegis Network recognizes this strength. We also recognize the need for an industry level report that can give directions toward which this industry is moving. While with every new edition, the DAN Digital report has been upping its rank in quality, range and comprehensiveness, we welcome sincere feedback and inputs from the entire industry to help establish a robust eco-system for this fast-growing and increasingly important industry channel, so that all of us can progress together!”
Key highlights from the report:
The Indian advertising industry has grown at a rate of 9.4 per cent over 2018 to reach Rs 68,475 crore by the end of 2019. The industry will grow by 10.9 per cent to reach Rs 75,952 crore by the end of 2020. It is expected to grow at 11.83 per cent CAGR to reach a market size of Rs 1,33,921 crore by 2025.
By the end of 2019, the digital advertising industry stood at Rs 13,683 crore, up by a rate of 26 per cent from Rs 10,859 crore in 2018. It is expected to grow at 27 per cent to reach Rs 17,377 crore by the end of 2020.
Advertising spends on digital media is expected to grow at a CAGR of 27.42 per cent to cross the Rs 50,000 crore mark. It is touted to reach an industry size of Rs 58,550 crore by the end of 2025. This sustained growth can be attributed to the technological advancements, improvements in data science and analytics, and introduction of policies and regulations among others.
Television takes the largest share of media spends at 39 per cent (Rs 26,869 crore) followed by print media at 29 per cent (Rs 20,110 crore) and digital media at 20 per cent (Rs 13,683 crore). In 2020, spends on television media is expected to grow at 10 per cent and its share will stay steady. While that on Print media is expected to grow at 3 per cent with this share declining to 27 per cent.
Across various industry verticals, FMCG sector spends the highest, contributing 30 per cent (Rs 20,182 crore) to the advertising industry. Next comes e-commerce with 10 per cent (Rs 6,915 crore) followed by the automotive sector with 8 per cent (Rs 5,797 crore).
FMCG spends a large majority of their advertising budget on television (61 per cent) while automotive and retail spend a large share of theirs on print. The biggest spenders on digital media are BFSI (42 per cent), consumer durables (38 per cent) and e-commerce (37 per cent).
Advertising spends on digital media is led by social media with the highest share of 28 per cent, contributing Rs 3,835 crore to the Indian digital advertising pie.
This is followed by spends on paid search (23 per cent), online video (22 per cent) and display media (21 per cent). Display media, online video and social media are expected to have the fastest growth in 2020. The share of paid search is expected to reduce from 25 per cent to 23 per cent by the end of 2020.
FMCG segment spends a large share of their digital media budget on online video (36 per cent), while e-commerce, consumer durables spend a mostly on paid search and social media.
By 2020, advertising spends on mobile devices is expected to grow by 41 per cent to have a share of 52 per cent in the digital advertising market, overtaking spends share on desktop.
Furthermore, the expected spends on mobile devices will reach a share of 64 per cent by 2022.
Advancements in marketing technologies and subsequent fusion with marketing creativity, along with the advent of 5G technology and increased adoption of E-commerce advertising will lead to the evolution of content for the next 500 million Internet users, thereby catapulting the digital media industry towards the Rs 50,000 crore milestone by 2025.