Indian advertising is expected to grow at 12% CAGR and become a 1 trillion industry by 2024 with digital media growing at 20% and traditional media growing at 8%, according to the EY FICCI M&E Report 2022.
As per the report, in 2019, digital comprised 24% of the total ad spends which went on to become 33% in 2021 and is further expected to amplify and reach 41% in 2024.
The figures do not include the SME and long-tail digital advertising spends of Rs 117 billion in 2021. If these are to be included, digital advertising would be the largest segment in 2021 at Rs 363 billion and contribute 42% of the total advertising, increasing to Rs 631 billion in 2024 which is 50% of total advertising spends.
Growth on traditional and digital mediums
Despite COVID-19 disruptions, advertising revenues in India bounced-back from a 29% degrowth in 2020 to 25% growth in 2021. In 2019, the total ad spends were Rs 795 billion with traditional medium being Rs 604 billion and digital comprising Rs 191 billion.
In 2020, it slipped to Rs 595 billion with traditional at Rs 404 billion and digital at Rs 191 billion. In 2021, the overall spendings was Rs 746 billion with traditional spending at Rs 500 billion and digital spending at Rs 246 billion.
The estimated figures for 2022, as mentioned in the report are Rs 865 billion with traditional at Rs 551 billion and digital at Rs 314 billion.
Increase in ad spends
96% marketers who took part in the EY marketer survey 2022 are expecting an increase in their ad spends, among them, 76% to increase ad spends by more than 10%, and 20% to increase by less than 10%. Merely 4% said that they will make no significant changes.
The respondents who participated in the survey included individuals from 10 different sectors. 40% participants were from consumer products and retail, 20% from financial services, 18% others, 14% tech, media and telecom and 4% from manufacturing.
The survey also highlighted that 98% marketers expect to increase spends on digital media in the next two years.
Aspects to drive growth
While the overall advertising is expected to grow by 12%, there are various aspects for different mediums that will drive in growth.
For TV, efficient CPRP, improved ad performance measurement and maintaining pay households will be the key factors.
Whereas for digital, data charges, smartphone penetration, vernacular content, rich consumer data to enable segmentation and attribution accuracy will drive in growth.
In print, aspects like revival of metro, English language and office circulation will play a major role and for OOH and radio, resumption of office commute and non-FCT revenues will be big.
For cinema, a steady flow of theatrical releases will be the only aspect to drive growth.