The Indian advertising industry is expected to grow 10.8 per cent to reach Rs 62,577 crore by the end of this year, mainly helped by a rapid growth in digital advertising, according to a report. The advertising sector, which had witnessed a degrowth in 2020 due to the pandemic, is expected to touch Rs 70,343 crore by 2022, as per dentsu Digital Report 2021.
"The advertising industry is expected to make a come back and will grow by 10.8 per cent to reach Rs 62,577 crore by the end of the year 2021. Furthermore, it is expected to grow with a CAGR (Compound Annual Growth Rate) of 11.59 per cent to reach Rs 70,343 crore by 2022," the report said.
The Indian advertising industry currently stands at Rs 56,490 crore and it witnessed a de-growth of 17.5 per cent over 2019 due to the pandemic, it added. Most of the sectors like manufacturing, trade, tourism, transportation, real estate and automobile were impacted during the initial phase of the lockdown in India.
While the digital advertising industry had witnessed a 15.3 per cent growth in 2020 despite the pandemic to Rs 15,782 crore from Rs 13,683 crore by 2019, this space is expected to reach Rs 23,673 crore by 2022. "Digital media will grow at 20 per cent to reach a market size of Rs 18,938 crore by 2021 and with a CAGR of 22.47 per cent to reach Rs 23,673 crore by 2022," the report said.
In 2020, television media, which has a wide reach, remained the largest contributor with 41 per cent market share with Rs 23,201 crore in 2020, followed by spends on digital with 28 per cent (Rs 15,782 crore) and print with 25 per cent (Rs 13,970 crore). Currently, FMCG segment has the highest expenditure on advertising with a contribution of 21 per cent (Rs 11,554 crore), followed by e-commerce with 17 per cent (Rs 9,788 crore) and consumer durables with 10 per cent (Rs 5,751 crore).
"FMCG spends a large majority of its advertising budget on television (64 per cent) while retail, automotive and media and entertainment segments spend a large share of their advertising budget on print," the report said. The biggest spenders on digital media are Banking, Financial Services and Insurance (BFSI) sector at 57 per cent followed by consumer durables at 45 per cent, telecommunications at 40 per cent and e-commerce at 39 per cent.
dentsu CEO India Anand Bhadkamkar said, "2020 presented a monumental challenge to us -- as individuals, business and society. It made us witness time and space in ways that many generations had only read about in textbooks or had heard of from ageing bystanders of yester-history".
"... more than 50 per cent of our revenue comes from digital at a time when the market average in India is still 10-12 per cent. We, at dentsu, expect 2021 to witness a colossal rise in digital advertising.