The Dentsu Aegis Network exchange4media Digital Report has found that the Indian digital advertising industry currently stands at INR 6,825 crore and predicted that the industry is expected to grow at a rate of 37% to reach INR 23,795 crore by 2020.
Ashish Bhasin Chairman & CEO South Asia Dentsu Aegis Network, said that this growth will be driven by multiple factors. “The entire economy is becoming digital in many ways - consumer behaviour is changing towards adopting digital, infrastructural benefits like increased bandwidth, lower data costs, and cheaper smart phones. In addition, in strange ways demonetisation has helped bring focus to digital and the government is giving more thrust on making everything digital,” he said listing the drivers for growth of digital advertising in India.
Multiple industry verticals have backed the growth of digital advertising in India with FMCG being the highest spender when it comes to digital advertisements. The industry contributes 29% to the INR 56,398 crore advertising industry in India. This is followed by auto (10%) and e-commerce (9%). BFSI contributes 7% while consumer durables, telecom and retail contribute 6% each to the advertising sector.
In the coming years the top few categories that will continue to be great adopters of digital advertisers will be e-commerce, FMCG, automobile, retail, and BFSI, Bhasin said. It is worth noting that currently, e-commerce, telecom, BFSI and media & entertainment (M&E) spend nearly one fifth of their marketing budgets (19%) on digital media.
The consensus among industry experts is that the automobile sector has been a laggard in the adoption of digital advertising. Bhasin believes that automobile though has come to the party late, is catching up rapidly. “In many ways, many car companies were slow starters but I think many of them are catching up rapidly and driving innovation in some ways. In the coming years, we will also move from mobile to mobility because every car will be digitally enabled device. So, while it may be true that some auto companies were slow to start in the near future they may be at the leading edge of digital infrastructure itself,” he said.
Speaking about how the Indian digital advertising market fares in comparison to the global market, Bhasin said that India is not lacking in any aspect but that the issues plaguing the Indian market are very different from the global market. “The global average in many countries is nearly 50%. That is to do with the internet penetration, bandwidth availability, relative per capita income etc. In comparison, we have a large part of rural India which is still to join the bandwagon in a big way. So when we look at a large country like India, the averages tend to be a bit misleading. I do not think it is lagging, I think there is a significant opportunity in the market. Soon, the largest number of internet users will be in India, the fastest growth of internet is in India, maximum number of people using the internet from their mobiles are in India. We are just in a different stage in our cycle of development,” he said.