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Business News/ Industry / Digital media fuels growth
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Digital media fuels growth

Digital media advertising grew by 44.5% in 2014 over the year-ago period

The growth of digital advertising is fuelled by low cost smartphones and cheaper data plans, according to a joint report published by industry lobby Federation of Indian Chambers of Commerce and Industry (Ficci) and consultancy firm KPMG India. Photo: BloombergPremium
The growth of digital advertising is fuelled by low cost smartphones and cheaper data plans, according to a joint report published by industry lobby Federation of Indian Chambers of Commerce and Industry (Ficci) and consultancy firm KPMG India. Photo: Bloomberg

Mumbai: The growth in popularity of digital media continued to surge in 2014, pushing digital media advertising to grow by 44.5% in 2014 over the year-ago period and driving the broader advertising industry growth.

Digital advertising spends account for 10.5% of the total advertising spends at 4,350 crore in India in 2014. The total advertising market in India is pegged at 41,400 crore and it grew at 11.7% in 2014 over the year-ago period, according to a joint report published by industry lobby Federation of Indian Chambers of Commerce and Industry (Ficci) and consultancy firm KPMG India.

“Digital advertising currently accounts for 5-8% of our overall advertising revenues and is growing exponentially. We are seeing maximum growth across displays which include mediums like YouTube. Content is also becoming big," said Sameer Satpathy, chief marketing officer, Marico Ltd, a consumer goods firm.

Likewise for L’Oreal, the cosmetics firm. Depending on the brand, digital advertising could be 8% or 10% of the overall advertising spends, said Satyaki Ghosh, director-consumer product division at L’Oreal India Pvt. Ltd. He said the medium is one of the fastest growing advertising channels for the company, growing at over 100%. “In 2-3 years, the medium can account for a quarter of the overall advertising spends for some of the brands," said Ghosh.

The Garnier men’s lip balm Absolute launched only with digital support fetched sales above expectations, said Ghosh.

In September, Coca-Cola India announced the launch of Coke Zero on Twitter and made it available on Amazon.in instead of retail stores.

Companies are also creating content for engaging with consumers online. In 2014, Marico launched Saffola Fit Foodie, a food website.

In areas with low mass media reach, the maker of Parachute and Saffola oils launched mobile tutorials under Nihar Shanti Amla hair oil. Last year, Coke Studio, a property of Coca-Cola India, released a sufi music video online. In two weeks, it received 200,000 views.

“The outlook in terms of products and penetration looks fabulous and exciting but infrastructure issues continue to plague us and act as deterrent to growth," said Praseed Prasad, national trading director for digital at advertising agency Group M.

The growth of digital advertising is fuelled by low cost smartphones and cheaper data plans, said the report.

To be sure, it is the traditional media which provides advertisers with the critical mass, reach and scale of audiences and constitutes a significant part of the overall pie, said the report.

However, this could change. The compounded average growth rate of Internet users is much higher than that of TV viewers. Between 2014 and 2019, the number of television viewers in India is expected to grow at a rate of 3% whereas Internet users may grow at 18% in the same period, albeit on a smaller base. In 2014, there were 825 million television viewers and 281 million Internet users in the country.

Meanwhile, traditional media companies are moving towards integrated newsrooms. For instance, In 2013, Zee News operated by Zee Media Corporation Ltd merged with DNA newspaper. India Today moved to a new office with the aim to integrate its TV, print, radio and online arms.

Shuchi Bansal in New Delhi contributed to this story.

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Published: 26 Mar 2015, 01:02 AM IST
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