MUMBAI: The Indian digital ad industry is estimated to grow with a CAGR of 32% to Rs 18,986 crore by 2020, according to the Dentsu Aegis Network report.
Digital ad spends will touch almost 19,000 crore in three years which is almost same as the size of print ad industry today. It is expected to grow at 3X of industry average over this time to touch almost a quarter of ad spends. Of this, mobile is expected to take 60% of share.
This growth in digital ad spends can be attributed to the rollout of 4G, reducing data costs, increasing smartphone penetration and increasing time spent on mobile phones.
Digital Media spends currently contribute to 15% of the total advertising industry and are expected to reach 24% of the entire market by 2020.
Google and Facebook continue to take the majority share of these spends, by some estimates, 80-85%. But this year might change that.
According to the report, 43% of the digital media budget is spent on advertising on the mobile devices (Rs 3,491 crore), as of 2017. The rest is spent on desktops (57 percent).
While current digital media spend on mobile stands at 43%, it is expected to grow at a CAGR of 49% to reach Rs 11,392 CR by 2020 (60% of the spends share). It will overtake spends on desktops by 2019.
Majority of the ad spends on desktops are made on Social Media (29%) followed by Search (27%) and Video (20%). Spends on Video on Desktops have seen the highest growth of 28% followed by Display (22%) and Social Media (20%).
A large chunk of the spends on mobile are made on Social Media (27%) followed by Search (25%) and Display (23%). Spends on Video on Mobile has seen the highest growth (74%) followed by Display (60%) and Social Media (57%).
While 85% of the digital media is currently purchased directly, the report expects programmatic to contribute to a quarter of all the digital media buying in India by 2020.
With the improvement in ad fraud detection and better data privacy policies, advertisers are growing more confident about Programmatic and more implementation will happen in the near future. AI will continue to be the biggest game-changer in 2018.
Currently, e-commerce followed by telecom and BFSI spend the highest proportion of ad budget on digital media.
Ad spends on digital Video is expected to see the highest growth rate followed by display and social media. OTT and an engaging mobile experience will drive the growth of the digital Industry, the report added.
Dentsu Aegis Network chairman, CEO South Asia Ashish Bhasin noted, “Digital is no longer a medium – it’s a way of doing business. It is how consumers interact with brands. The digital transformation is affecting every business and agencies and marketers who don’t recognize this will be left behind. Digital is a behavioral change taking place with the consumers, not just a way of building a brand. This is a critical difference many don’t understand.
“Dentsu Aegis Network is over-weight on digital. Of our 3500 people, more than 1570 are in our digital agencies. Nearly 40% revenue comes from digital at a time when the market average in India is still 12-15%. Last year, we recognized a need for an industry level research report which not only covers the market size but also gives a direction towards which this industry is moving. The lack of detailed and accurate Digital Advertising Spends is surprising for a medium that lends itself to measurement. It is in order to fulfill this gap that all the 8 agencies of the Dentsu Aegis Network i.e. Isobar, iProspect, Merkle Sokrati, WatConsult, Dentsu Webchutney, SVG Media/Columbus, Fractal and Amnet, collaborated with E4M again this year, for the 2nd edition of our Digital Report that extensively covers Digital trends, spends and insights across all sectors.”