Published 23:13 IST, February 22nd 2021
Digital advertising to grow 20% by 2021, to reach Rs 23,673 cr by 2022: Dentsu-e4m report
According to Digital Advertising in India 2021, in the thick of the pandemic, the digital advertising industry grew by 15.3% to reach Rs. 15,782 crore in 2020.
From personal adjustments in lifestyles to global shifts, the pandemic most strongly affected businesses across the spectrum. While most sectors saw a sharp plunge in their growth and revenue, a sector that was marked by dramatic growth even amidst the global health crisis was advertising in the digital space. A growth that is not only likely to stay but also continues expanding exponentially. For advertisers, this was a new place to conquer. Not only did the digital space prosper and progress amid the pandemic, but it also brought with it huge AdEx.
Releasing the fifth edition of their annual report on digital advertising, Exchange4Media and Dentsu India gauged how cash-rich the digital space is likely to get in the coming future and how advertisers could be looking at a massive shift to the comparatively novel medium.
As per their report titled- 'Digital Advertising in India 2021', in the thick of the pandemic, the digital advertising industry grew by 15.3% to reach Rs. 15,782 crore by the end of 2020. In India, the digital medium overtook the print medium to become the second biggest AdEx medium. Expected to grow at 20% to reach a market size of Rs. 18,938 crore by 2021, the double-digit growth of the sector to a large extent can be attributed to the global pandemic.
While speaking exclusively to Republic World, dentsu India CEO Anand Bhadkamkar elaborated on the unprecedented growth of the sector and how it had been set in motion relatively before the pandemic gripped the world. "Digital was getting prominence and was growing over the last few years, with the pandemic it just got a more push with the advertisers finding more value aided by the digital transformation in businesses which fast-tracked last year," said Anand Bhadkamkar.
Can Digital AdEx overtake TV AdEx?
Even as overall AdEx witnessed a 17.5% drop at Rs. 56,490 crore over 2019 due to the pandemic, Digital AdEx grew. The sector is expected to have the highest growth rate of 20% to reach a market size of Rs. 18,938 crore as compared to traditional media which is said to shrink to a 7.2% growth rate by the end of 2021.
Even with these phenomenal figures, television contributes the largest share (41% at Rs. 23,201 crore) to the Indian advertising market. On the possibility of digital AdEx overtaking television's mammoth figures, Anand Bhadkamkar opined that the change could happen but it would take a few more years.
"It will take 3-4 years for digital to reach there. Because as digital is growing, penetration of TV is also growing and in India, television popularity is not going away and it will not go away immediately. Digital has overtaken print but television still remains strong. Even for large advertisers like FMCG, telecom or e-commerce, TV remains a strong choice as they look for data and measurement while reaching out to the masses. That is going to continue for a while," he said.
Interestingly, Bhadkamkar pointed out that one of the major factors that still drew the line between the TV and the digital space for the advertisers was the lack of a common and unified measurement system across platforms. While TV has a common measurement system or a 'currency', digital still needs to have that. According to him, the introduction of a common currency could also factor into the growth of the sector.
Elaborating on the varied use of targetted analytics in the digital spectrum he said, "There is no common currency of measurement yet in digital across platforms but it gives you precision targeting, personalised experiences and can be purely performance-driven. You can have the right message at the right time for the right set of people.It can give a longer presence in media and yet achieve high reach/awareness for the campaign. There are multifold advantages that advertisers have seen, hence, the growth has been in double digits over the years. And that helps digital score over other mediums as well."
The massive market of online gaming
According to 'Digital Advertising in India 2021', the highest proportion of spends on digital is contributed by social media (29%, Rs. 4,596 crore) followed very closely by online video (28%, Rs. 4,366 crore), and paid search (24%, Rs. 3,725 crore). Currently, 75% (Rs. 11,836 crore) of digital media spending is made on mobile devices. When you look closely into the activities of mobile users, online gaming reigns supreme. So is this humungous group enough to attract advertisers to the digital medium?
Even with mobile gaming growing exponentially in India, according to the dentsu CEO, it still had time to override other sectors. "It definitely is a huge growth and during a pandemic, it has gained more traction.It is gaining popularity but it is still at a nascent stage. There are acouple of players in the category and they have only evaluated the Sports genre so far but FMCG, E-commerce, Edu Tech, Auto and BFSI sectors will remain key drivers for AdEx. These key AdEx players are all those categories that have relevance throughout the year and are not driven by only properties like IPL. Also, while the gaming categories have deep pockets, it is still difficult to compete with the budgets of the top 3 AdEx categories."
Growth of AI-driven programmatic buying
Another interesting foresight that the Dentsu CEO sees is the growth of the share of spends on programmatic buying. While spends on programmatic buying contribute to 38% in 2020 of the digital media pie, it is said to increase to 42% by the end of 2022.
Simplifying how it works, he said, "Programmatic works not only on the cost efficiencies, but also hones down the media plan to the targeted audience cohorts, geographical locations, interests, etc. Programmatic media buying helps advertisers reach the right user at the right time, and at the right price with the help of data insights, proprietary tools and algorithms. It gives better ROI on every penny that is spent by the advertisers. At AMNET, we have experts who not only work on algorithms and data but also think and act fast in an ever-changing environment. Programmatic has evolved so rapidly and people now understand its value, but there’s still huge complexity. We work closely with our clients to help them reach the audiences and achieve the goals of the campaign."
Talking about how the strategy was highly efficient, the CEO said that it offered a more accurate automated AI, data-driven Solution as opposed to a manual solution. With direct buying witnessing a nearly 15 percent decline from 75% in 2019 to 62% in 2020, the share spends on programmatic buying is projected to continue expanding in the near future.
(Image Credit: Pixabay)
Updated 14:42 IST, February 23rd 2021