Advertising to grow at 10.8% in 2021: Report

  • Digital advertising grew by 15.3% last year to touch Rs. 15,782 crore
  • In terms of brand categories, FMCG has the highest expenditure on advertising with a contribution of 20% followed by e-commerce (17%) and consumer durables (10%)

Saumya Tewari
First Published4 Feb 2021
Photo: iStockphoto
Photo: iStockphoto

The Indian advertising industry is expected to bounce back from pandemic disruption and will grow at 10.8% to reach 62,577 crore by 2021, said a report by Dentsu India. The industry currently stands at 56,490 crore having witnessed degrowth of 17.5% over 2019 due to the pandemic.

Barring digital, every other media vertical took a hit as the majority of brands cut down on offline advertising with outdoor taking the biggest hit. Digital advertising grew by 15.3% last year to touch Rs. 15,782 crore. It is expected to maintain the momentum growing at 20% to reach a market size of 18,938 crore by 2021. Currently, the highest proportion of spends on digital is being contributed by social media (29%) followed by online video (28%), paid search (24%) and display banners (16%).

Due to the pandemic, there has been a huge positive shift in the time spent on digital apart from an uptick in online shopping. Therefore, advertising on e-commerce platform touched Rs. 4,700 crore in 2020 which is expected to grow at a CAGR of 40% this year. This has increased advertising spends share on digital from 20% in 2019 to a whopping 28% in 2020.

The report said that this shift has impacted print, resulting in slower growth with its media share declining from 29% in 2019 to 25% in 2020.

However, television continued to hold lion's share of overall media spends owing to viewer loyalty and massive reach. In 2020, TV contributed to the largest share of media spends at 41% (Rs. 23,201 crore) followed by digital (28% at Rs. 15,782 crore) and print (25% at Rs. 13,970 crore). Out-of-home (OOH), radio and cinema have witnessed the media ad spends share decline compared to 2019. The festive season combined with Indian Premier League (IPL) and business activities resuming post lockdown allowed brands to liquidate their OOH inventory and reasonable proportions of spends came into this medium.

In terms of brand categories, fast moving consumer goods (FMCG) has the highest expenditure on advertising with a contribution of 20% followed by e-commerce (17%) and consumer durables (10%).

“The growth in traditional media will be largely led by television. While print is showing recovery it will take a while to reach the pre-covid levels with outdoor being the last medium to recover. Meanwhile, digital advertising is growing with mobile devices driving majority of the media spends ( 75% ). I expect spends on social media and e-commerce platforms, which grew significantly last year, to drive the digital advertising growth this year,” said Anand Bhadkamkar, CEO, Dentsu India.

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