New Delhi: The digital advertising industry is estimated to grow at a compound annual growth rate (CAGR) of 31.96% to reach ₹ 24,920 crore by 2021 , on the back of affordable data and increased content consumption, said a report from Dentsu Aegis Network (DAN).
Digital will contribute 29% of the ad market size by 2021.
Digital ad spends currently stand at ₹ 10,819 crore, contributing 17% to the total expenditure of the advertising industry. This is expected to touch ₹ 14,281 crore by 2019 growing at 31.9%, said the digital ad spend forecast report published by DAN in association with trade portal exchange4media
. The Indian ad industry stands at ₹ 61,878 crore and is expected to touch ₹ 85,250 crore by 2021 growing at a CAGR of 10.62%.
The report clearly stated that the surge in digital ad spends will be led by three main factors including voice-based search technology, vernacular as well as video content. This growth will be further enhanced by engaging mobile experiences based on augmented reality (AR) and virtual reality (VR) technologies.
“We have about 500 million people on the internet today and in the next three to four years, another 300-400 million people will join in. Concurrently, the next phase of internet users will speak regional languages and as a result, you will probably see a lot more advertising in regional languages on digital in the years to come," said Ashish Bhasin, chairman and chief executive - South Asia, Dentsu Aegis Network.
Currently, the advertising expenditure on the digital advertising formats is led by social media (29%) followed by search (25%), display (21%) and video (20%). Digital Video is expected to have the fastest growth, with CAGR of 37% that will touch ₹ 5,545 crore by 2021.
In terms of brand categories, the service industry has embraced digital media for scaling businesses. Industries such as banking, financial services, and insurance (BFSI) are experimenting with non-traditional media platforms such as YouTube and Instagram Stories to connect with users.
BFSI is the biggest spender on digital media with a contribution of 38% of all their marketing budgets. This is followed by consumer durables (36%), e-commerce (34%) and telecom (31%). Meanwhile, fast moving consumer goods (FMCG) continues to spend heavily on the television (63%) while retail sector spends largely on print (54%).
With a user base second only to China, mobile is driving growth for content platforms as well as advertisers who are experimenting with different ad formats to connect with users. The market size of advertising spending on mobile is expected to grow from the current ₹ 5,102 crore to ₹ 16,718 crores by 2021.Currently, spending on the mobile advertising is 47% of the total digital advertising budget which is predicted to be 67% by 2021.
Apart from video content, engaging ads on mobile, voice based interactions and emerging technologies such as virtual reality, artificial intelligence and internet of things will make story telling engaging on digital media.