Ad spend in FY2024 to see muted growth at 6%, reaching US$16-17 Bn: Redseer Strategy Consultants

Digital ad market in FY2024 is expected to remain muted at a 6-7% growth rate and reach US$ 8.8 - 9.3 bn in the fiscal

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Ad spend in FY2024 to see muted growth at 6%, reaching US$16-17 Bn: Redseer Strategy Consultants

Redseer Strategy Consultants’ report about how Digital Advertising platforms are evolving, revealed that FY2024 is likely to be  a muted year for advertising spend with a 6% growth and is expected to touch US$16-17 Bn in  FY2024.


This is owed  to a slowdown in consumption observed in the last 5-6 quarters as well as a dip in PE/VC  investments because of rising interest rates and geopolitical tensions. Additionally, the advertising  sector is recovering from the impact of the 28% GST levy on the Real Money Gaming format. 

The report also noted that despite macroeconomic headwinds leading to most consumer sectors  controlling their ad spending, eCommerce platforms continue to spend in FY2024, estimated at 15%  growth in spending this fiscal year.

Digital  Advertising is well on its way towards amassing a significant user base of 800 million internet users  which, the report predicts, will fast surpass Television viewership in 1-2 years. This demographic is spending almost 1/3rd of  their waking hours on the internet.

Digital advertising market in FY2024 is expected to remain muted at a 6-7% growth rate and reach US$  8.8 - 9.3 bn in the fiscal, with global platforms such as Alphabet and Meta set to moderate their market  share from 62% in FY2023 to 60% in FY2024.


Retail Media platforms like eTailing and Hyperlocal, on  the other hand, is expected to grow at 20% in FY2024 and increase its market share from 18% in  FY2023 to 20%. Content-based platforms are set to continue retaining their 20% share this Fiscal.

The  report notes that Advertisers are increasingly spending on Challenger platforms like Retail media and  content platforms with niche offerings. This is due to multiple factors like specific targeting of high intent  users, greater reach within Tier-2 audiences and increased attention span on the platforms.

Of all the  platforms, Hyperlocal platforms, which have already exhibited a 70% increase in Ad Revenue CAGR  between FY21-23 and Short Form Video platforms (which have exhibited a 50% Ad Revenue CAGR  increase) are the fastest growing. eTailing and OTT are two other hypergrowth sectors for advertisers to  watch out for.

The report also reveals that Challenger Platforms compare differently across various parameters of the  marketing funnel. For instance, brands might see higher rates of Retention and Conversion on eTailing  and Hyperlocal platforms whereas Awareness might not be on par. OTT Video, Audio and SFV on the  other hand performed well in the Awareness and Consideration parameter but were less favourable in  terms of Conversion and Retention.

In FY2023, Retail-led sectors consisting of the CPG and Retail, eCommerce, Consumer Durables and Electronics as well as Automobile categories accounted for 60% of the digital ad spend. Content and  Service Sectors accounted for 27% of the advertorial spend in the USD 8.2 – 8.7 Bn market.

FY2024 is  set to witness digital disruption within the Consumer sector with greater spends from digital first  brands, and legacy brands making the digital pivot. According to the Report, eCommerce, Travel and Hospitality and Consumer Durables sectors are expected to increase their ad spends in FY24 with  customer retention in view. 

The rebound in consumption and growth across sectors will be shaped by the rise in urban demand and  the gradual recovery in rural demand spread across the next 12-18 months, catalysing advertorial  spending at a CAGR of 9-10% over the next 4 years to become US$ 23-24 Bn in FY2028. Digital  advertising would continue to outgrow the market growth at a CAGR of 11-12% and account for 60% of  overall advertising market in FY2028.

As the sector looks to chart its way forward, the report highlights five key trends expected to take shape in the next 2  years: 

1. The rapid growth of Influencer Advertising owing to the cost-efficiency of the format 2. An Increase in advertising expenditure towards Tier-2+ audiences

3. The faster growth of Performance Ads supported by Analytics tools

4. Maturing Programmatic Play led by focus on contextual advertising

5. The integration of GenAI across the advertising value chain

ad spend Redseer Strategy Consultants FY2024 muted growth digital advertisements