MUMBAI: Fuelled by the smartphone explosion and bandwidth growth to consume digital video content in the country, the digital advertising market in India is projected to reach Rs 7,044 crores by December 2016 growing at a CAGR of 35 percent as per the ‘Digital Advertising in India’ report, which is jointly published by the Internet and Mobile Association of India (IAMAI) and IMRB International. The digital advertising market was estimated at Rs 5,200 crores by the end of December 2015 according to earlier reports.
The report finds that digital advertising spend is about 12 per cent of the total advertising spends in the country. In terms of volume, e-Commerce palyers lead the digital ad spends with Rs 1,040 crores, followed by Telecom and BFSI. However, a comparison of these verticals in terms of share of spends on Traditional versus Digital show that BFSI organizations incurred the highest share on digital advertisement spends. 40 percent of their overall advertising spends was on Digital followed by e-Commerce, Telecom and Travel.
In 2014, search ads constituted 30 per cent of the overall ad spends followed by Display ads at 23 per cent and Social Media at 18 per cent. The report finds that Search continued to lead in 2015 with spends close to Rs 1,488 crores. Social Media spend was close to Rs 940 crores. Spend on video ads such as YouTube also showed huge gains in 2015 and accounted for 17 percent of the overall ad spends in the digital space. This has been driven by higher Internet speeds available to the consumers coupled with an increase in mobile advertisements. As these trends continue, video advertisement is expected to gain further in 2016.
It isn’t just IAMAI that has high hopes on the rapidly growing digital advertising spends in the Indian market. It must be noted that the earlier released FICCI KPMG report pegged Digital Advertising at Rs 8,110 crores by the end of 2016 growing at a CAGR of 33.5 per cent, the highest growing medium of all. The report also suggested that the evident shift would be towards mobile and video advertising backed by the opening up of bandwidth in the country by 2020. The report estimated that by 2020 digital advertising will touch Rs 255.2 billion (Rs 25,520 crore) and contribute 25.7 percent of the total advertising revenue.
