Download dentsu-e4m Digital Advertising 2022 report
The report, which was unveiled on Feb 1, predicts that the digital media market size will reach Rs 27,759 crore by 2022-end
The much-awaited ‘dentsu-e4m Digital Advertising in India 2022’ report was unveiled on Tuesday.
To read the full report click on the link below.
The ‘dentsu-e4m Digital Advertising in India 2022’ report unveiled today reveals that aided by the rapid shift of businesses and consumers towards digital media, the Indian digital advertising industry leapfrogged by 35% to reach Rs 21,353 crore by the end of 2021 from Rs 15,782 crore in 2020.
The highest proportion of spends on digital media has been claimed by social media (29%, Rs 6,218 crore), closely followed by Online Video (28%, Rs 5,907 crore). While paid search accounts for 23% (Rs 5,039 crore), display banners claim 16% of the spends (Rs 3,420 crore). Digital media, the report states, is expected to have a growth rate of 30% to reach a market size of Rs 27,759 crore by the end of 2022.
The report also notes that advertising spends on e-commerce platforms stood at Rs 6,300 crore in 2021, and is expected to grow at a rate of 36% in 2022. With e-commerce emerging as the digital backbone of the retail sector, many small and big players, especially from small metros and towns, have realized the immense potential that advertising on e-commerce platforms holds, it added.
As per the report, social media and online video remain the strongest platforms on digital media, seeing consistent growth over the years. With the newer offerings of social and video commerce, consumers are spending more time on these platforms, resulting in the high growth of advertising spends on digital media.
It added that social media and online video presence have been imperative for brands as these command the highest consumption levels and hence offer the biggest consumer engagement. With the rapid pace at which the internet infrastructure has been improving along with the advent of 5G technologies, spends on online video will witness the highest growth in the next few years, the report notes.
Digital media has emerged as the white knight for the overall advertising industry that has grown at 18.6% over 2020. While traditional media has been growing by 12.6%, digital media has been leading the growth rally for the Indian advertising industry, growing at almost twice the rate of the overall industry.
Overall AdEx Growth in 2021
In 2021, the advertising industry grew to Rs 70,715 crore and is expected to reach Rs 93,119 crore by the end of 2023, growing at a CAGR of 14.75 per cent. Television claimed the largest share of media spending (42%, Rs 29,279 crore), followed by digital (30%, Rs 21,353 crore) and print (24%, Rs 16,599 crore).
Currently, FMCG makes the highest contribution of 34% (Rs 23,736 crore) towards the Indian advertising industry, followed by e-commerce (14%, Rs 9,619 crore) and automotive (7%, Rs 4,745 crore). The biggest contributors to the digital media industry are FMCG (42%, Rs 8,928 crore), e-commerce (17%, Rs 3,607 crore), consumer durables (6%, Rs 1,368 crore) and pharmaceuticals (5%, Rs 1,124 crore).
Digital Ad Market Size in 2023
The report has projected that the Indian digital industry is expected to grow at 29% to reach a market size of Rs 35,809 crore by the end of 2023. Digital is expected to contribute 38% to the overall advertising industry in India, on par with television. Ad spends on online video are projected to grow with a CAGR of 34.86% to reach a spends’ share of 30 per cent (Rs 10,474 crore) of the digital advertising market by the end of 2023. Social media is expected to grow with a CAGR of 29.79% to have a spend share of 29%. Paid search will have a spend share of 22% while display banners will have a 16% share by the end of 2023.
According to the report, the Indian short-form video ecosystem, which is occupied by a mix of short-form video apps like Reels, Josh, MX TakaTak, Roposo, Moj, Zili, and YouTube Shorts, presents greater opportunities for brands to leverage upon greater engagement. In the near future, Indian short-form video has the potential to be a frontrunner with the availability of cheap internet data, easy-to-use platforms, and vernacular language. The short-video content market is set to get a boost in India.
Digital media spends across industry verticals
The FMCG category makes the highest contribution of 42% (Rs 8,928 crore) to the digital media industry. This contribution has increased tremendously since the onset of the pandemic that has brought about a fundamental shift in how consumers purchase their essentials and groceries. The e-commerce sector contributes 17% (Rs 3,607 crore) to the Indian digital media industry. This is followed by categories such as consumer durables (6%, Rs 1,368 crore), pharmaceuticals (5%, Rs 1,124 crore) and automotive (5%, Rs 970 crore).
The FMCG category spends the maximum share of its digital media budget on online video (41%), followed by social media (31%). It spends 16% of its digital media budget on display banners and 9% on paid search. The e-commerce segment spends the highest share of its digital media budget on paid search (47%), followed by 25% on social media and 14% on online video.
The consumer durables segment spends the maximum share of its digital media expenditure on paid search (30%) and social media (26%). This is followed by a spend share of 20% on display banners. The pharmaceutical sector spends 48% of its digital media budget on paid search, followed by 24% on online video and 22% on social media.
The report also says that the automotive segment spends its digital media budget on paid search (26%), online video (24%), and social media (22%). The telecom category spends 33% of its digital media budget on social media, followed by 27% on online video. The education sector spends 34% of its digital media budget on online video and 29% on social media.
The BFSI segment spends 37% of its digital media expenditure on paid search, followed by display banners (27%) and social media (23%). The Media & Entertainment category spends 34% of its digital media budget on online video followed by 30% on social media. The retail segment spends 44% of its budget on social media, followed by 24% on paid search and 19% on display banners.
Digital Media Spends Across Devices
At the end of 2021, 75% (Rs 16,015 crore) of digital media revenue was contributed by spends on mobile devices while the spends on desktops stood at 25% (Rs 5,338 crore). At the consumers’ end, almost all internet technology adoption is happening on mobile devices.
The largest proportion of the spends on mobile devices is claimed by social media (30%, Rs 4,734 crore) and online video (30%, Rs 4,728 crore) as the majority of the consumer content consumption happens around these two formats. The highest share of spends on desktop is claimed by social media (28%, Rs 1,484 crore) and paid search (28%, Rs 1,463 crore).
By the end of 2022, the report estimates that the share of advertising spends on mobile devices will reach 77% (Rs 21,374 crore). Furthermore, with the advent of new applications and the availability of better connectivity technologies and affordable devices, the advertising spends share on mobile devices is expected to grow at a CAGR of 32.06% to reach 78% (Rs 27,931 crore) by the end of 2023.
Spends on digital media programmatic buying contributed 40% (Rs 8,541 crore) by the end of 2021 as the pandemic has led to increased buying of digital media inventory through programmatic. Direct buying of digital media inventory contributes 60% (Rs. 12,812 crore) currently. It is expected that programmatic buying of digital media will reach a share of 42% (Rs 11,659 crore) by 2022. We expect it to grow with a CAGR of 37.35% to reach a spend share of 45% (Rs 16,114 crore) by the end of 2023.
The dentsu-e4m report has been sponsored by HT Media Group and ABP Live, Voot, Yahoo!, and Josh are co-powered by sponsors. mFilterIt, Truecaller, and Trell are Co-Gold partners while Xapads is the Innovation Partner.
Instagram, LinkedIn, Twitter, Facebook & Youtube