Indian ad revenue to reach Rs 1.2 trillion caused by general elections and live sports: Magna report

Delhi: The total advertising revenue in 2024 is expected to reach Rs 1.2 trillion ($14.6 billion) from Rs 1.1 trillion ($13.1 billion), reveals a Magna Global Advertising Forecast report. 

Digital formats or new media contribute over 60% to the incremental revenue. Digital is estimated to grow at 15.9% and linear growth is expected at 8.4%. 

The report states that general elections and live sports will lead to significant growth in AdEx across both digital and linear media, boosting the growth of the first half of the year by 11.8%, equalling the second half of the year which is expected to grow by 11.9%.

Growth in 2023

Listed companies’ average income and profits have grown in double digits in 2023. As per the report, the signs indicate that private investment in capacity building and marketing activities will increase. 

The auto sector demonstrated growth across all segments in 2023 which is further expected to boost marketing and advertising budgets in 2024.  

Dominant sectors in 2024

CPG, auto, retail, government and political advertising, and finance are expected to be the dominant sectors contributing to India’s adex growth in 2024, followed by pharma, education, real estate, media and entertainment and building materials making up the top ten sectors.

Venkatesh S, SVP - director, Intelligence Practice, MAGNA India, said, “The Indian advertising market is set to expand by 11.8% in 2024, reaching ₹1.2 trillion, driven by a robust 15.9% growth in digital media. Traditional media formats are also growing, enduring the relevance of Print, OOH and Radio in addition to Television. The government’s emphasis on digital public infrastructure is propelling digital ad spending to nearly half of total revenues by 2026.”

Dominance of digital media

Digital media continues to dominate consumption trends. Digital formats are growing at a healthy pace, specifically social, video and audio streaming and online gaming. 

With the democratisation of content consumption, ad-supported video-on-demand platforms have changed viewership by providing access to live sporting events. 

Furthermore, digital ad spending is expected to grow by 15.9% to reach Rs 580 billion ($6.9 billion) in 2024. Social and search with 34% and 33% shares drive the digital pie followed by display and video at 19% and 14%. In terms of growth, social and video are the fastest-growing formats at 21.9% and 19.1%, respectively.

Growth of television

The report further reveals that television reaches 778 million viewers (759 million- 2022) and overall time spent has increased to 230 minutes (218 minutes- 2022). 

Approximately, a third of homes do not have television yet which indicates linear TV has the potential to grow. The probable launch of Direct-to-Mobile will increase the reach of television as trials for the home-grown technology will soon be planned across cities. 

Overall television ad revenues in 2024 are expected to grow by 8.7% to reach an estimated Rs 393 billion ($4.7 billion). Elections will drive advertising growth for TV, specifically for news and the T20 World Cup will further boost revenues. 

Growth of print

Print circulation in 2022-23 has gone from 391 million to 402 million copies. Advertisers’ belief in the consumption story led to a growth of 7% last year. In 2024, ad sales revenue will grow by 6.1% to Rs 188 billion ($2.2 billion) but it is still 11% below pre-Covid levels. Digital print revenue is estimated at Rs 13 billion ($159 million). 

A drop in social media referral traffic as Meta dissociated itself with news has left publishers in a tough spot. However, print advertising growth will come on the back of national elections and local elections in eight states.

Radio’s sob story

Radio is ailing from the slowdown caused by COVID-19, recovering 86% of the 2019 levels. While there is an increase in volumes, ad rates have remained soft. The challenge of audience measurement capabilities is hurting the medium, as per the report. 

The increase in government ad rates is expected to help growth since 2024 is an election year. Government recommendations on news broadcasts, reduction in licence fees and mandatory FM tuners on mobiles will bring a windfall to the industry. The revenue for 2024 is estimated to be Rs 19 billion ($231 million) reflecting growth of 9% over the previous year.

OOH growth

OOH (Out-of-Home) media is on a growth trajectory and is expected to cross 2019 levels in 2024. Traditional, transit and DOOH (Digital Out-of-Home) have shown incremental revenues. 

The government’s push on infrastructure and urbanisation is an expected boost for OOH inventory, especially premium formats. The revenue is estimated to increase by 16% to reach Rs 34 billion ($402 million), DOOH's share to total OOH is at six percent, growing at a compound annual growth rate of 33% and the share of DOOH would be approximately 11% by 2028.

Roadstar, a unified audience measurement tool for the OOH industry developed by the national body for Outdoor Media, is likely to see the light which should further help demonstrate the effectiveness of the medium and facilitate growth. 

Mellow-down of in-cinema advertising

The report states that in-cinema advertising has been a big casualty of Covid. While the segment has recovered to 72%, successive comeback from all languages with box office hits in 2023 and a good inflow of content in 2024 will drive both demand from advertisers as well as a surge in audience footfalls. In 2024, the growth is estimated to be approximately 19% to reach Rs 8 billion ($95 million).

Hema Malik, chief investment officer, IPG Mediabrands India, stated, “India's advertising industry is gearing up for an impressive 2024, with significant growth driven by pivotal events like the general elections and ICC T20 World Cup. We expect substantial ad spend increases across sectors such as auto, retail, and CPG. The anticipated 11.8% growth in ad revenues highlights the market's resilience and potential. With rural demand expected to rise due to favourable monsoons and digital ad spend projected to reach ₹580 billion, the convergence of traditional and digital media presents unique opportunities for advertisers.”