The landscape of Indian Digital Advertising in 2021
Thoughts on the Dentsu Digital Advertising in India 2021 report
It remains no secret that Indian Advertising has also been burnt by the pandemic.
Early last year during this time, when China was aware of the virus and India still seesawing between Delhi and possibilities of lockdown; DAN revealed its yearly Digital Advertising report.
The report predicted that 2020 will be the year of cricket for India, starting matches with Sri Lanka, followed by Australia, South Africa, IPL England, and ICC T20 world cup. This will generate a strong advertising demand, enabling the Indian Advertising industry to grow with the sustained economic momentum at 10.9% to reach Rs. 75,952 crore by the end of 2020.
And then COVID-19 happened.
2020 - negative growth for the Indian ad industry
A year later, when every expert is trying to predict the form of economic recovery; DAN has released its latest Indian Digital Advertising 2021 report.
The double-digit negative growth of the ad industry in 2020 can be witnessed in the below snapshot. However, 2021 will be the year of coming back to normal, and from 2022 onwards we can expect some percentage of positive growth. Obviously, these predictions don’t account for any forthcoming pandemics.
There were enough signs of muted growth in the Indian Advertising sector but no one was expecting a double-digit negative growth.
However, the advertising revenues picked up steadily in the third and last quarter of 2020. The IPL and the festive season certainly gave a boost to the media sector.
In 2021, the advertising industry will recover strongly to reach a market size of Rs. 62,577 crore with a growth of 10.8% over 2020. The report states that the industry is expected to grow with a CAGR of 11.59% to reach Rs. 70,343 crore by the end of 2022.
Pandemic or no pandemic - TV still dominates.
Television contributes the largest share (41%, Rs. 23,201 crore) to the Indian advertising market. This is followed by digital (28%, Rs. 15,782 crore) and print (25%, Rs. 13,970 crore).
FMCG that spends the highest on advertisements (21%, Rs 11,554 crore) has also contributed the largest share of its media budget on television (64%) as the medium has the widest reach. This is followed by spends on digital (19%) and print (11%).
Players like BFSI, Telecom and ECom have equally placed their budgets on TV and Digital. Even Print isn’t dead for Auto and Retail.
On comparing with last year the beliefs on mediums haven’t drastically changed.
Auto and Retail have always preferred Print. Similarly, BFSI, Telecom, and Ecom have shown greater interest in digital, and during the pandemic, the budgets have slightly moved towards digital.
Social media contributes the highest spends
With Indian’s locked up into their homes - digital proliferated and so the impact wasn’t that severe.
According to the report: “The digital advertising industry has seen a growth at Rs. 15,782 crore by the end of 2020, which was at Rs. 13,683 crore by the end of 2019.” Again the growth will happen but to reach the standards of 2018 will take a couple of years.
Talking about spends - Social Media showcased the highest spends (29%, Rs. 4,596 crores). This was followed very closely by online video (28%, Rs. 4,366 crores), and paid search (24%, Rs. 3,725 crores). Spends on display banners stand at 16% (Rs. 2,528 crores).
Again there hasn’t been a stark difference on spends when compared to 2019 - a year without the pandemic.
E-commerce that makes the highest contribution of 24% (Rs. 3,782 crores) to the digital media industry invested its maximum budget (42%) to paid search. In 2019 it had allocated 41% to paid search. It is followed by social media with 26% and online video at 21%. In 2019 the video budgets were 14% and this was obvious because under lockdown Indian screen time had zoomed up and the time spent on video had extensively increased.
The next two heavy investors on digital - FMCG invested the highest share of its digital media budget on online video (49%) followed by social media (32%) and display banners (14%). The automotive segment spends its largest share of its digital media budget on online video (32%) followed by social media (23%), paid search (21%), and display banners (15%).
BFSI are the only media trusting heavily on Display Banners. They should put the budget into Paid Search.
Mobile ad spends skyrocket in 2020
A recent study revealed that the average usage of smartphones by Indians is estimated to have gone up 25 percent to almost 7 hours a day.
The study, commissioned by handset maker Vivo and conducted by CMR, said the average time spent on smartphones in a day has been on the rise with average usage growing 11 percent to 5.5 hours in March 2020 (pre-COVID) from about 4.9 hours on average in 2019.
Naturally, digital advertising experts lapped up to this behaviour change. In 2020 75% (Rs. 11,836 crores) of digital media, spending is made on mobile devices. Spends on mobile has increased by 84% compared to 2019.
In 2019 the ad budgets on TV(53%) and Mobile(47%) were equally divided but the extended lockdown, work from home, and obviously cheap data helped the ad spends skyrocket in 2020.
No surprises that online video contributes the highest proportion to the digital media ad spend on the mobile device (29%, Rs.3,458 crores) compared to desktop (23%, Rs. 908 crores). Spends on the desktop are led by social media at 30% (Rs. 1,167 crores), followed by search (28%, Rs. 1,120 crores) and online videos.
The biggest takeaway from this year’s DAN’s report: Mobile ad spends skyrocket.
While most of the budgets, mediums, industry remain the same but device spends are mind-blowing. Going forward obviously there would be some correction as consumer behaviours will shift to the desktop but it won’t go back to its previous number.
That’s why this is one projection that I don’t see changing even if we have a few more pandemics waiting.
“It is estimated that by the end of 2022, 77% of all digital media spends will be made on mobile devices.”