Social media to drive digital advertising growth in 2021: Dentsu

Advertising on social media platforms is expected to drive the growth of the country's digital advertising industry. The segment is expected to grow at 20% to reach a market size of ₹18,938 crore by 2021, said a report by Dentsu India.

With India expected to have over 760 million smartphone users in 2021, social media platforms will be an immediate beneficiary of the increased data adoption.

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As more users log onto Instagram, Facebook, Twitter, YouTube and Google, brands will find ways to target them through various formats of digital ads. This could include photos, videos, promoted posts and short format unskippable video ads that appear on digital video content.

Among ad formats on digital, currently, the highest proportion (29%) of overall spends on digital is contributed by social media which stands at Rs. 4,596 crore, registering a growth of 20% over 2019. It is expected to grow steadily in the next two years, said Dentsu in its Digital Advertising forecast report. The other key formats include online video, paid search and display banners.

E-commerce platforms have also emerged as a serious avenue for advertising during the pandemic as a majority of consumers have opened up to digital buying. E-commerce giants have been focusing on these consumers with initiatives like the use of local language and localized content and offers. In addition to that, higher focus on product search during the pandemic period has driven the evolution of e-commerce advertising in India.

By the end of 2020, the advertising spends on e-commerce platforms were Rs. 4,700 crore which is expected to grow at a compound annual growth rate (CAGR) of 40%. E-commerce advertising also results in greater sales conversions and personalised ads also helps in effective targeting of consumers.

"With increased digital consumption which accelerated last year, social media has picked up in a big way and it is driving the growth of digital advertising in India. The growth across key platforms is much sharper and faster than before. Last year, one entire quarter was steered through online buying and promotions. Therefore, e-commerce has started getting more traction and better share of ad spends. We expect more targeted and personalised ads to capture consumer mind space this year," said Anand Bhadkamkar, CEO, Dentsu India.