Digital medium set to be the leading platform for advertisers

Industry experts say apart from factors like cheap data and growing smartphone penetration, demand from regional language markets will spur the growth of digital advertising in the years to come

e4m by Shikha Paliwal
Updated: Aug 28, 2019 9:52 AM

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The digital ecosystem in India has been predicted to get bigger and better. With the internet subscriber base growing by the day, brands are increasingly opting for advertising in the digital space.

Recent findings in the KPMG Media and Entertainment report - 2019, titled ‘India’s Digital Future - Mass of Niches’ makes a healthy projection for the digital market in India. The report states that the digital market will become the second largest in the media and entertainment sector by FY22 when it touches Rs 386 billion.

The report is also extremely bullish about the digital advertising space. According to the report’s findings, by FY24, digital advertising will be the largest medium with 39.5 per cent share of total advertising, surpassing TV advertising.

We spoke to industry experts to understand what is making the digital medium an attractive avenue for advertising. Besides drivers like cheap data and growing smartphone user base, most said the growth in the sector would be also spurred by demand from regional language markets.

According to Rubeena Singh, CEO, iProspect, “In India, we have 612 million people on the internet today and in the next three to four years, another 300 to 400 million will join in. Simultaneously, the next phase of internet users will speak regional languages and as a result, we expect to see a lot more advertising in regional languages on digital in the years to come. As per the DAN Digital report, the Indian advertising market is estimated to grow with a CAGR of 10.62 per cent till 2021 to reach a market size of Rs 85,250 crore ($12.06 billion). Of this, the digital advertising market size is estimated to achieve a CAGR growth of 31.96 per cent. The market will expand to Rs 24,920 crore ($3.52 billion). Hence, we firmly believe that digital is the way forward and will be a leading platform for advertisers to reach their TG with very specific communication. Penetration of internet in rural India, increase in sales of low-cost smartphones, lower data prices will all lead to a more competitive and comprehensive digital ecosystem in the country in the coming years.”

Echoing a similar sentiment, Umang Bedi, President, Dailyhunt said, “Digital advertising definitely has the potential to become the largest reach medium, especially since technological interventions based on Artificial Intelligence and Machine Learning are helping marketers get the best return on investment. Digital platforms help businesses target their audience through not just demographics but also user preferences, past engagements and relevance, thereby making it a more targeted and personalised approach. In addition, regional language markets are gaining popularity with almost 700 million non-English users expected to be online by 2025. We are already seeing this in the digital advertising space as we get first time entrepreneurs and local businesses coming online and connecting them to the relevant audience in tier 2 and tier 3 towns.”

With the internet subscriber base growing and the Indian consumer demanding more and more video content, digital advertising is fast turning into the ‘go-to’ medium for most brands. This trend has been highlighted in the growth projections by the report which explains how the digital advertising market will be the largest among all media – TV, print, radio and OOH. The market is expected to reach Rs 423 billion by FY23 as ad spend gets increasingly redirected towards digital media from traditional formats. Amongst all the formats that have been taken into account (video, display, search and classified) the video format, not surprisingly, tops the charts for maximum revenue generation across all digital formats in social media and OTT platforms, including YouTube, gaming, news and other websites.

Other experts we spoke to say the fact that digital advertising will be the next big thing is now a forgone conclusion. What brands and agencies need to focus more is how best they can innovate and integrate into the digital landscape.

Aatef Bham, Co-founder and Director of Business Development, Togglehead says, “With data in India being so affordable (rates being the cheapest in the world), the skyrocketing boost in the Indian digital industry was foreseen. While this was expected, the growth of content in regional languages comes as a simultaneous effect. When asked about the impact of this growth, I believe the increasing options provided by platforms in terms of demographic targeting, not only justify digital’s significance in a brand’s primary marketing mix but also stress the importance of concentrated and personalised content.”

Bham further said the digital spectrum is a ground “sprouting with innovations and creative solutions each day” and in order to push boundaries agencies must maintain a dynamic and fluid process to stay ahead of this trend curve.

Expressing a similar sentiment, Harikrishnan Pillai, CEO and Co-founder, TheSmallBigIdea, said, “Looking at the current scenario even at 40 per cent internet penetration and questionable data speeds, the numbers we see are nothing less than phenomenal. By 2023, owning to changes in data infrastructure, regional language capabilities, business model evolutions and the rise of the digital-native, this number will go over the roof. It’s a no-brainer that digital will pick up a massive chunk of the Adex. Print, Radio and Outdoor should look at a more intense integration of digital solutions into their advertising solutions, hence increasing the value of their native offering.”

However, the report also states that the preference for video by advertisers will come at a cost for other formats. Video ads on OTT platforms are likely to constitute the bulk of the segment revenues, while display ads will slowly lose significance.

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