Digital to contribute 29% of total ad market by 2021: DAN digital report

A look at Dentsu Aegis Network's Digital Report 2018.

Dentsu Aegis Network released its Digital Report 2018 yesterday.

Here are the key highlights from the report:

As of 2018, the Indian advertising market stands at Rs. 61,878 crore ($8.76 billion) and is estimated to grow with a CAGR of 10.62per cent till 2021 to reach a market size of Rs. 85,250 crore ($12.06 billion).

The digital advertising market size is around Rs. 10,819 crore ($1.3 billion) and the estimated CAGR growth will be 31.96per cent and the market will expand to Rs. 24,920 crore ($3.52 billion).

Television and print take the largest share of media spends at 70per cent aggregated followed by digital media at 17per cent. Digital will contribute 29per cent of the ad market size by 2021.

Currently, BFSI is the biggest spender on digital media with a contribution of 38per cent of all their marketing budgets. This is followed by consumer durables (36per cent), e-commerce (34per cent) and telecom (31per cent). FMCG spends heavily on the television (63per cent) and the retail sector spends largely on print (54per cent) medium of advertising.

The advertising expenditure on the digital advertising formats is led by social media (29per cent) followed by search (25per cent), display (21per cent) and video (20per cent).

The main drivers of the growth of digital media will be voice, vernacular and video. Apart from this, some of the other drivers of digital media growth will be engaging mobile experiences based on augmented reality (AR) and virtual reality (VR).

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Summary:

Internet penetration and adoption of digital media in India is growing at an unprecedented rate, which is creating huge opportunities to tap into the unchartered arena of digital space in newer ways. The ever-evolving digital industry and the advancement of technology opens various opportunities to interact with the audiences. Marketers can now choose innovative ways to reach out to their target audience and cater to the demand to create unforgettable experiences for them.

As of 2018, the Indian advertising market stands at Rs. 61,878 crore ($8.76 billion) and is estimated to grow with a CAGR of 10.62per cent till 2021 to reach a market size of Rs. 85,250 crore ($12.06 billion). The digital advertising market size is around Rs. 10,819 crore ($1.3 billion) and the estimated CAGR growth will be 31.96per cent and the market will expand to Rs. 24,920 crore ($3.52 billion).

Television and print take the largest share of media spends at 70per cent aggregated followed by digital media at 17per cent. Digital transformation is being adopted at a substantial scale, which in turn, is increasing the adoption of digital media at a rapid pace.

Currently, BFSI is the biggest spender on digital media with a contribution of 38per cent of all their marketing budgets. This is followed by consumer durables (36per cent), e-commerce (34per cent) and telecom (31per cent). FMCG spends heavily on the television (63per cent) and the retail sector spends largely on print (54per cent) medium of advertising.

The advertising expenditure on the digital advertising formats is led by social media (29per cent) followed by search (25per cent), display (21per cent) and video (20per cent). The BFSI vertical spends the largest share of its digital media budget on search (38per cent), while FMCG spends the largest share of its digital media budget on video (33per cent).

Currently, 18per cent of all digital media is bought programmatically and has grown from 15per cent last year. The major reason for the growth are technological advancements, improvements in data science & analytics, implementation of algorithm to automate various procedures, better ad fraud detection and improved data policies & regulations. The rapid increase in the penetration of mobile devices and internet has led to 47per cent of digital media spends on mobile devices and is expected to grow at CAGR of 49per cent to reach spends share of 67per cent by 2021.

Machine Learning (ML) and artificial intelligence (AI) will see heavy adoption and implementation in various media in the near future. The main drivers of the growth of digital media will be voice, vernacular and video. Apart from this, some of the other drivers of digital media growth will be engaging mobile experiences based on augmented reality (AR) and virtual reality (VR). In the near future, data-driven decision-making and business strategies will be more transformative and will entail building and merging of different types of business models and its implementation.

Commenting on the report, Ashish Bhasin, chairman and CEO - South Asia, Dentsu Aegis Network says, “Today, you no longer have to sell ‘digital’ to a client. This is the only medium which gives you a very measurable ROI, and almost an immediate impact. We have about 500 million people on the internet today and in the next three to four years, another 300-400 million people will join in. Concurrently, the next phase of internet users will speak regional languages and as a result, you will probably see a lot more advertising in regional languages on digital in the years to come. Dentsu Aegis Network understands this scope. Consequently, we are over-weight on digital. Of our 3500 people, more than 1600 are in our digital agencies. Nearly 48per cent of our revenues comes from digital at a time when the market average in India is still 15-17per cent.”

To view the full report click here.