MxMIndia

Tag: Digital AdEx

  • Anticipated to reach a projected value of US$15.84 billion

    Digital AdEx set to double in 2023-24

    The Indian advertising market has experienced an impressive upswing, surpassing expectations and establishing itself as one of the world’s fastest-growing industries. It secured the 8th spot in the  global ad spend, emerging as the fastest-growing market among the Top 10 in 2023. Initially projected to grow at a moderate rate of 8–10% in the fiscal year 2022-23, the digital advertising sector defied expectations. Fueled by Economic Tailwinds in 2023-24, digital ad expenditure is forecasted to more than double, reaching US$ 21 billion by 2027-28.

    Currently, notes the report, India’s advertising sector has shifted digitally with the rise in smartphone and internet users. According to IBEF, this has fuelled a thriving digital ad market, projected to reach US$ 7.9 billion by 2027 with a 12.3% CAGR. While TV and traditional marketing holds their ground, the internet and digital platforms dominate. Social media leads with 30% of ad expenditure (Rs. 8,757 crore or US$ 1.05 billion), followed by online video at 28% (Rs. 8,319 crore or US$ 1 billion). Paid search constitutes 23% (Rs. 6,895 crore or US$ 892.23 million) and display banners make up 16% (Rs. 4,816 crore or US$ 579.2 million).

    What to expect in 2024?

    The dynamic landscape of digital marketing in India demands constant awareness of evolving trends for sustained business growth. Projections indicate that advertising revenue in India is set to hit Rs. 394 billion (US$ 5.42 billion) by 2024. Says Vaasu Gavarasana, COO at RMT (Red Matter Technologies), Mentor & Marketing Coach at T-Hub and IIT Madras: “Anticipate significant shifts in marketing approaches, notably a surge in TV advertising expected to reach Rs. 394 billion (US$ 4.89 billion) in 2024. Outperforming global counterparts, Out-of-Home (OOH) advertising is poised for growth at a remarkable CAGR of 9.9%. The digital industry is gearing up to contribute 38% to India’s overall advertising sector, matching television’s impact. Expect a substantial uptick in spending on social media marketing, fueled by the ascent of short videos and internet advertising”.

    Factors contributing to Digital Marketing and Advertising In 2024, various factors will shape the landscape of digital marketing and advertising. Television is poised to dominate the Indian media market, capturing 40%, closely trailed by print media at 13%, and the burgeoning OTT and gaming industries at 8%. This landscape creates a ripe environment for digital advertisements on these platforms including the advertising-based video on demand (AVoD) segment which is projected to experience significant growth, with a Compound Annual Growth Rate (CAGR) of 24%, reaching a substantial US$ 2.6 billion by 2025.

    As we look ahead, an estimated 600-650 million Indians will actively engage with short-form videos, dedicating 55 to 60 minutes of their day to this content, as reported by IBEF. By 2027, India is poised to become the fourth-largest TV advertising market globally, trailing only behind the United States, Japan, and China. Additionally, mobile internet advertising is set to claim a significant share, constituting 73% of internet advertising income in India by the same year, shaping the ever-changing digital advertising terrain.

    These developments signal a transformative period for digital advertising, impacting businesses across all levels and ushering in a new era of interactive marketing and innovation. The future promises a dynamic landscape, where strategic adaptation to emerging trends will be pivotal for businesses seeking to thrive in this evolving digital marketing environment.

  • … though some of the findings of GroupM's TYNY & Madison's PMAR studies are very different

    A Tale of Two Reports

     

     

    By Indrani Sen

     

    Indrani SenIt is time to celebrate as the TYNY (This Year Next Year) 2023 report released by GroupM last week declared that the total value of Indian AdEx in 2022 has crossed the 100K crore mark touching INR 1,09,636 crore and in 2023 is estimated to grow at a healthy rate of 15.5% over 2022 towards another milestone of 150K crore (predicted as INR 146450 crore in 2023). Digital AdEx with an estimated 30% growth rate is expected to power the overall growth. India continues to be the fastest growing advertising market and as per the TYNY report has moved up from 9th position to the 8th position among the Top 10 countries with a share of 2% of the global adspend.

     

     

    As per the tradition set up over the last few years, the PMAR (Pitch Madison Advertising Report) 2023 was also released last week with a prediction that Indian AdEx will cross 100k crore mark in 2023 (predicted as INR 104230 crore) with a growth rate of 16% over 2022. Digital AdEX with an estimated 25% growth rate provide momentum to the growth.

     

    Both the TYNY and PMAR have been predicting in the same line over last few years with the gap between their estimates of the size of Indian AD Industry becoming wider year on year. By 2023 the size of the gap in the two estimates will be 40% of the total Indian ADEX size estimated by PMAR and by 2025 the size of the gap may become 50% of the Indian ADEX estimated by PMAR!! Globally is quite common to have difference in the estimates of the AD Industry size / AdEX estimated by different organisations, but if the difference becomes huge then it causes serious concern.

     

    Six years back, I wrote here an article comparing the estimates of TYNY 2017 and PMA 2017 https://www.mxmindia.com/2017/02/what-is-the-real-size-of-indian-ad-industry/. In that year, the estimates for Digital AdEx by the two agencies were almost the same, INR 7000+ crore in 2016 and INR 9000+ crore in 2017. However, the TV AdEx estimated by TYNY was considerably higher than the TV AdEx estimated by PMAO and hence the total Ad Industry expenditure estimated by TYNY was around INR 6000 crores higher than the that of PMAO.

     

    It is interesting to note that over the last six years, Digital AdEx has increased at a much higher rate in the TYNY reports than in the PMAR reports. In 2022, the Digital AdEx INR 68,642 crore reported by TYNY was double the estimate INR 34,405 crore shown by PMAR.  AS per the TYNY report, Digital ADEX now has more than 50% share of the total AdEx, while in the PMAR report total traditional media is still enjoying around 60% share of the total AdEx as shown in the table below.

     

     

    The various industry websites including www.mxmindia.com and financial/ business publications have already reported on the findings of the two reports. Digital did not suffer during the three waves of Covid-19,  among the traditional media TV was the first to recover its pre pandemic revenue, outdoor recovered in 2022, print, radio and cinema are expected to recover in 2023. On the whole. 2022 was a good year for Indian Advertising and the immediate future looks bright.

     

    In spite of the widening rift between the TYNY and PMAR estimates, their leaders agree on the future directions. Prasanth Kumar, South Asia CEO, GroupM has said “As technology redefines interactions between consumers, brands and businesses the ad industry must navigate thru this changing environment.” Sam Balsara, Chairman and Managing Director, Madison World has advised the advertisers “to take advantage of the evolved digital infrastructure for distribution and advertising to prepare for the future growth and to invest in building their own D2C channels.” Only if the two agencies could stop the widening rift between the two reports, we would be in a happier situation.

     

    Indrani Sen is a veteran industryperson and educator. This is a new season of her Monday column on MxMIndia. Her views here are personal.