The Indian advertising sector emerged as a beacon of optimism in 2023, boasting the fastest growth rate among large economies. The digital advertising industry in the market witnessed 36.6% growth over 2022 with a market size of Rs 40,685 crore. It contributed 44% of the total advertising spends and is estimated to reach Rs 62,045 crore, growing at a compounded rate of 23.49% by 2025, according to Digital Advertising Report 2024 by Dentsu and e4m.
The acceleration of digital advertising development was fuelled by various events such as the IPL, ICC Cricket World Cup, Women’s World Cup, Asia Cup, and other cricketing events, in addition to the Assembly elections. The positive momentum is set to continue in 2024 with the General elections and IPL.
#Marketing Spending by Sector
The FMCG segment makes the highest contribution of 36% (Rs 14,755 crore) to the Indian digital media industry, showing a growth of 29% over the previous year. The e-commerce category contributes 19% (Rs 7,865 crore) to the digital media industry, followed by pharmaceutical and automotive segments.
In terms of marketing budget share by sector, the telecom segment spends 64% of their media budget on digital media, closely followed by e-commerce segment. The pharmaceutical category allocates 49% of their media budget on digital. These sectors spend around a third of their media budget on television.
In the past year, the BFSI sector witnessed the highest growth of 75% in digital media spending, fueled by the robust banking and insurance sectors.
#Fast CTV Advertising Growth
One major shift happening in India digital market is the growing popularity of connected TV (CTV). With hyper-personalized content recommendations, cross-device viewing and a magnitude of content options including OTT services, CTV is revolutionizing television consumption and forging a dynamic landscape in the media and advertising industry in India.
Indian CTV households are projected to grow to 100 million, and ad spends on CTV are expected to touch $400 million by 2027 at a CAGR of 45%, according to MiQ report. The continual growth in connected TV markets provides brands with new targeting options. The growing adoption of smart TVs now offers an evolved opportunity and potential to be both consumable and shoppable within a single device, eliminating the need for secondary technologies viz. scanning a QR code, visiting on-screen URL or picking up the phone. This makes e-commerce omnipresent, allowing viewers to seamlessly move from inspiration to transaction. 56% of consumers said they used a second screen frequently when streaming videos or watching TV.
Regarding performance accessment, 59% of Indian advertisers anticipate a rise in their CTV ad spending over the next 12 to 24 months, and 74% of CTV advertisers measure the success of their campaigns through reach/frequency towards the intended target audience. Moreover, compared to linear TV, CTV advertising demonstrates higher ROI, with an impressive 70% of advertisers reported experiencing a ‘much better’ or ‘slightly better’ ROI than traditional TV advertising, as per Teads’ research.
The synergies between CTV and mobile advertising underscore the effectiveness of an omnichannel approach. The study reveals a significant 67% increase in unaided brand recall associated with a combined CTV and mobile advertising strategy. By incorporating the strengths of both digital and TV, connected TV (CTV) offers a substantial opportunity for marketers and advertisers to engage premium audiences and cord-cutters on the big screen.
#Programmatic Buying Demand Is Surging
The advancements in machine learning and AI technologies have played an increasingly significant role in targeted advertising, offering personalized content and experiences. This greatly enhances customer engagement and conversions. Programmatic buying of digital media contributed 42% (Rs 17,088 crore) to the digital media industry by the end of 2023, experiencing a growth rate of 37% over the previous year. The segment is expected to grow at a compounded rate of 27.51%, reaching a share of 45% (Rs 27,782 crore) by the end of 2025.
#Performance Tracking Is Prioritized
About 68% marketing leaders say the top business priority in the region is improving performance measurement tools and relying on data and insights to demonstrate effectiveness.
Currently, advertisers face challenges in using analytics tools to prove the direct impact of brand and performance marketing on sales conversion and their effect on the bottom line. In India, marketing leaders are keen to enhance efficiency by leveraging AI tools, particularly in the influencer marketing category. With the vast accessibility and reach of social media, influencer marketing is witnessing a sharp growth and evolution, thanks to emerging technologies poised to revolutionize influencer marketing and gain acceptance among millennials and Generation Z, who are main social media influencers’ followers.
Want to know how to leverage AI-empowered influencer marketing tool to improve marketing efficiency? Contact MOCA at business@moca-tech.net