Insight: dentsu India releases its 2022 Digital Advertising Report

MUMBAI, INDIA — This February, dentsu India released its 2022 Digital Advertising Report, sharing its forecasts on the impact of various advertising platforms across the region.

Mr. Narayan Devanathan

Narayan Devanathan, Chief Client Officer, dentsu India: “Notwithstanding the devastation caused by Covid-19’s second wave in 2021, we have seen a dramatic upsurge in digital in ways we have not seen before. Digital advertising in India is expected to equal (if not surpass) the previously-impregnable fortress of TV advertising by 2023, clocking in at Rs. 35,809 crore out of an expected total advertising of Rs. 93,119 crore. Accelerating this trend and underscoring it, has proved that even in 2021, 75% of digital advertising spends was recorded on mobile devices – signalling mass India’s leapfrog into the digital era. With the requisite caution in the face of the varying strains of the pandemic notwithstanding, India will continue to rise in the global economy in the coming years, driven by digital. In that context, the importance and utility of a comprehensive, authoritative and trustworthy census of the digital-driven advertising landscape cannot be underestimated. The 2022 edition of the ‘dentsu Digital Report’ has been put together to act as an enabler as well as expansive assimilation of all the action in the Indian advertising landscape so that we all have one vocabulary, one source of truth to turn to in harnessing its potential.”

Key Highlights:

  1. The Indian advertising industry currently stands at Rs. 70,715 crore, having grown at 18.6% over 2020. It is expected to reach Rs. 93,119 crore by the end of 2023, growing at a CAGR of 14.75%.
  2. The digital advertising industry has witnessed a growth in market size from Rs. 15,782 crore in 2020 to Rs. 21,353 crore in 2021, growing at 35.3%. Digital media is expected to grow at 29.5% CAGR to reach a market size of Rs. 35,809 crore by 2023.
  3. In 2021, television claimed the largest share of media spending at 42% (Rs. 29,279 crore), followed by digital (30%, Rs. 21,353 crore) and print (24%, Rs. 16,599 crore).
  4. Currently, FMCG has 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).
  5. The biggest contributors to the digital media industry are FMCG with 42% (Rs. 8,928 crore), e-commerce (17%, Rs. 3,607 crore), consumer durables (6%, Rs. 1,368 crore) and pharmaceutical (5%, Rs. 1,124 crore).
  6. Spends on digital media are led by social media, which has the largest share of 29% (Rs. 6,218 crore), closely followed by online video (28%, Rs. 5,907 crore) and paid search (23%, Rs. 5,039 crore).
  7. FMCG, education and media & entertainment verticals spend the largest share of their digital media budget on online video, while pharmaceuticals and e-commerce spend the most on paid search.
  8. The rapid increase in mobile usage and improved internet infrastructure have led to 75% (Rs. 16,015 crore) of digital media spending on mobile devices. Most of the online expenditure on mobile devices goes to social media (30%) and online video (30%).
  9. The changing consumer behaviour is paving the way for conversational commerce. E-commerce in India is evolving in the form of social commerce, video commerce, voice commerce and hyperlocal / Business to Consumer (B2C) commerce and expanding its realm into other media. Micropayment mechanisms will accelerate this evolution further.
  10. The shift in technology is resulting in a widespread acceleration to the digital transformation of businesses and consumers. This is leading the way to media convergence with business delivery models taking a more organic form, independent of the individual medium.

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