It is further expected to grow at 20% to reach a market size of Rs. 18,938 crore by 2021
The outbreak of the pandemic has crippled the world economy, having grave impacts across industries. It seems like a reset of our usual functions, where greater adaptation, agility and diversification have become the cornerstone of a company’s growth playbook. The media and advertising industry was no different, with digital emerging as a catalyst to help companies pull themselves out of this situation and explore newer horizons.
Giving credence to the fifth edition of the 'Digital Advertising in India 2021 Report’ by dentsu & Exchange4Media, the Indian advertising industry witnessed de-growth of 17.5% over 2019 due to the pandemic. This can be majorly attributed to brands pausing their advertising spends and utilising it more judiciously. However, it is expected to make a comeback and grow by 10.8% to reach Rs 62,577 crore by the end of the year 2021. It is further expected to grow at a CAGR of 11.59% to reach Rs. 70,343 crore by 2022.
As for digital, it has become the second biggest AdEx medium in India after overtaking print. The 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 is expected to 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.
Advertising spends on digital media increased from a share of 20% in 2019 to 28% in 2020. It is further expected to reach 34% by the end of 2022. The biggest spenders on digital media remain BFSI (57%), consumer durables (45%), telecommunications (40%) and e-commerce (39%). Digital soaring high numbers can be well reasoned to contribution from tier II & tier III cities, shift to digital modes of entertainment, along with greater utilisation of ecommerce platforms.
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).
Television on the other hand, has contributed the largest share of media spends (41%) (Rs. 23,201 crore) in 2020, followed by spends on digital (28%, Rs. 15,782 crore) and print (25%, Rs. 13,970 crore). Currently, FMCG spends a large majority of its advertising budget on television (64%) while retail, automotive and media & entertainment segments spend a large share of their advertising budget on print.
The accelerated use of digital has naturally impacted print, resulting in slower growth with its media share declining from 29% in 2019 to 25% in 2020. Its drop in readership has been majorly affected by the lockdown and shift in news consumption by readers.
The report also revealed that OOH, radio and cinema have witnessed declining media ad spends, with 3%, 3%, & 0.5% in 2020 respectively. The festive season combined with IPL and business activities in the economy post lockdown allowed brands to liquidate their OOH inventory and reasonable proportions of spends came into this medium.
“2020 presented a monumental challenge to us – as individuals, business and society. It made us witness time and space in ways that many generations had only read about in textbooks or had heard of from aging bystanders of yester-history. Yet, I must reiterate that despite all the aching that this hailstorm of a year introduced into our lives, 2020 was also maleficently unique. It forced us into depths of insights that we could never have comprehended otherwise. It also reminded us of what the human spirit could eventually endure and the magnificent resilience that it is capable of. Dentsu is over-invested in digital. Of our 3000 people, more than 1800 are in our digital companies. Additionally, more than 50% of our revenue comes from digital at a time when the market average in India is still 10-12 per cent. We, at dentsu, expect 2021 to witness a colossal rise in digital advertising. We also recognise the need for a business intelligence report that can give directions toward which this industry is moving with ever-changing client demands and market scenarios. We look forward to your thoughts and opinions to help sharpen our approach towards this fast-growing industry as we strive to expand, together,” comments Anand Bhadkamkar, CEO India, dentsu on the report.
Exchange4media Group co-founder Nawal Ahuja also mentions about how greater focus needs to be offering reliable and transparent data and greater ROI. "Scale brings with it a demand for greater accountability and with digital ad spends look set to equal those on TV, a larger number of CMOs will seek increased transparency and ROI. Thus far, the medium has been used largely as a lead generation platform, heavily funded by big national advertisers. Social media platforms have been under immense scrutiny for content and with major brands across western markets taking a stand against toxic content, these companies will in all likelihood no longer have a free run without taking the onus for the content on their platforms."
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