India’s digital advertising industry expected to reach market size of Rs 35,809 crore by 2023: Report

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After a difficult year due to the outbreak of the pandemic, there has been a V-shaped recovery in Indian businesses in 2021. As a result, the Indian advertising industry has seen a recovery in advertising spending reaching a size market size of Rs. 70,715 crore with growth of 18.6% over 2020. The industry is expected to reach Rs 93,119 crore by the end of 2023, growing at a CAGR of 14.75% , according to the latest report published by dentsu India. Additionally, the digital advertising industry reached a market size of Rs 21,353 crore in 2021 from Rs 15,782 crore in 2020, growing by 35.3%, due to accelerated business transition and of consumers going digital. Digital media is expected to have a CAGR of 29.5% to reach a market size of Rs 35,809 crore by 2023.

“Despite the devastation caused by the second wave of Covid-19 in 2021, we have seen a dramatic digital upsurge in ways we have never seen before. Digital advertising in India is expected to match (if not exceed) the previously impregnable stronghold of TV advertising by 2023, reaching Rs 35,809 crore out of an expected total advertising of Rs 93,119 crore,” Narayan Devanathan, Chief Accountant Officer , dentsu India, said.

“Accelerating this trend and highlighting it has proven that even in 2021, 75% of digital ad spend was on mobile devices, signaling India’s mass leap into the digital age. Despite the caution required in the face of the various strains of the pandemic, India will continue to make progress in the global economy in the years to come, driven by digital. In this context, the importance and usefulness of a comprehensive, authoritative and trustworthy census of the digital advertising landscape cannot be underestimated,” added Devanathan.

The highest proportion of digital media spend is currently claimed by social media with a 29% share of digital ad spend, closely followed by online video with a 28% share (Rs 5,907 crore). On the other hand, paid search accounts for 23% share (Rs 5,039 crore), while display banners accounts for 16% share (Rs 3,420 crore).

Although television accounted for the largest share of media spending at 41% in 2021, the share of spending on television is expected to fall to 38% by the end of 2023. The share of print media spending is also expected to decrease from the current 23%. to 19% during this period. Currently, FMCG has the highest contribution of 34% (Rs 23,736 crore) to the Indian advertising industry, followed by e-commerce (14%, Rs 9,619 crore). The automotive and durable consumer goods segments contributed 7% each.

The report also adds that changing consumer behavior is paving the way for conversational commerce. Several new segments such as social commerce, video commerce, voice commerce, and hyperlocal commerce/Business to Consumer (B2C) are emerging under e-commerce. Micropayment mechanisms will further accelerate this development, the report adds.

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