DAN report pegs digital ad industry growth at 32% to reach Rs 18,986 cr by 2020
The Indian advertising industry is estimated to grow at a CAGR of 11 per cent till 2020 to touch Rs 77,623 crore as per a new Digital Report release by Dentsu Aegis Network (DAN). Driving this growth will be the smartphone revolution and the subsequent spends on digital advertising. As of 2017, the Indian ad industry stands at Rs 55,960 crore, the DAN report states.
The report further reveals that ad spends have seen the highest increase in E-commerce (13 per cent) and BFSI (11 per cent) sectors. Television takes the largest share of media spends at 40 per cent (Rs 22,526 crore), followed by Print at 34 per cent (Rs 18,981 crore) and Digital media at 15 per cent (Rs 8,202 crore). While spends on Television will grow with a CAGR of 8 per cent till 2020, its contribution to the advertising market has been on a decline.
The Digital Advertising industry currently stands at Rs 8,202 crore, as per the DAN report, and is expected to grow with a CAGR of 32 per cent to reach Rs 18,986 crore by 2020. This growth can be attributed to the rollout of 4G, reducing data costs, increasing smart phone penetration and increasing time spent on mobile phones.
Digital Media spends currently contribute to 15 per cent of the total advertising industry and are expected to reach 24 per cent of the entire market by 2020.
E-Commerce is the biggest spender on Digital Media, contributing 19 per cent of all digital spends, followed by FMCG, telecom and BFSI. E-commerce and Telecom spend the highest on digital as a percentage of their overall ad spends.
Currently, social media takes the lion’s share of digital ad spends (28 per cent) followed by search (26 per cent), display (21 per cent) and video (19 per cent). Video is expected to see the highest growth of CAGR 38 per cent and will have spends share of 22 per cent by 2020. Spends on display is expected to grow at CAGR of 36 per cent, while social media is expected to grow at 34 per cent CAGR till 2020. Search will see a slower growth rate of 25 per cent, with its spends share reducing from the current 26 per cent to 22 per cent by 2020.
Spends on Mobile is expected to grow at a CAGR of 49 per cent to overtake spends on desktops and reach spends share of 60 per cent by 2020.
Some of the drivers of the growth of digital media in the near future are video content, along with the engaging mobile experience, voice based interaction, transformations in payment mechanisms, etc.
Digital media spends currently contribute to 15 per cent of the total advertising industry. It is expected to reach 24 per cent of the entire market by 2020. Spends on Video ads have shown a significant increase and accounted for 19 per cent of the overall spends in digital advertising. This platform is expected to see the fastest growth till 2020.
The future of advertising will be defined by a number of aspects of digital advertising. For instance, online video is set to grow by 38 per cent CAGR till 2020; digital display will grow by 36 per cent CAGR; social media by 34 per cent CAGR; and programmatic by 66 per cent CAGR.
Digital spends trends
FMCG sector spends the largest share of its digital media budget on Video (35 per cent) followed by Social Media (27 per cent) and Display (24 per cent).
The automotive segment spends 25 per cent of its digital media budget on Search, followed by Video (23 per cent) and Display (20 per cent). The automobile sector will witness further growth in the coming years thanks to the increased domestic demand because of the rising income and the younger population. This, in addition to the growing demand for commercial vehicles owing to Government’s focus on electric vehicles and heightened infrastructure activity, will significantly increase the ad spends in this sector.
E-commerce segment spends 42 per cent of its digital media budget on Search, followed by Social Media (25 per cent) and display (15 per cent). It spends 13 per cent of its digital media budget on Video.
Retail segment spends 37 per cent on Social Media, followed by Search (27 per cent). It spends 18 per cent on Display and 12 per cent on Video.
Telecom spends 34 per cent on Social Media, followed by 24 per cent on Video. 21 per cent is spent on Display, while 17 per cent is spent on Search.
BFSI spends majority of its digital media budget on Search (37 per cent) and Display (26 per cent). It spends 23 per cent on Social Media and 12 per cent on Video.
Media and entertainment spends major share of its digital marketing budget on Social Media (34 per cent), closely followed by Video (28 per cent).
Consumer Durables segment distributes its digital media spends mostly on Search (28 per cent), followed by Social Media (26 per cent). It spends 18 per cent on Display and 15 per cent on Classifieds.
Augmented reality & Digital Marketing
As the Augmented Reality (AR) gear gets more accessible, more and more people will have AR gear. Google and Snapchat have been experimenting with glasses and established the foundation for more experiments.
In its nascent stages, while it was just about creating game and some fun experiments, AR is now maturing as a technology. It is now ready to redefine people’s experiences and interactions. It is a great opportunity for marketers to change the way their consumers experience the brand.
A retailer can offer customised deals to users basis the consumption history. For fashion and lifestyle brands, AR presents a new way for the user to see how a certain product would look on them. This will make the decision process faster and more convenient.
This will also mean the death of traditional retail store. Or the stores we are most familiar with. Brand will have to transform stores into experience zones. Users will walk in looking for specific information. The availability of that information can be make or break for a brand.
Till a while ago, AR suffered from the lack of a viable mobile platform. With the advent of ARCore on Google’s Android and ARkit on Apple’s iOS, a significant increase in the number of AR apps and features is expected.
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