Digital Advertising Boom: Anticipated 32% Growth to ?24,920 Crore by 2021, Reveals Report

The digital advertising industry is poised for remarkable growth, set to surge at an impressive rate of 31.96% to reach ?24,920 crore by 2021, according to a report by Dentsu Aegis Network (DAN).

This upward trajectory is fueled by the accessibility of affordable data and a surge in content consumption across digital platforms. Currently, digital ad spends are at ?10,819 crore, contributing 17% to the overall advertising expenditure. Projections indicate this figure will climb to ?14,281 crore by 2019, growing at a rate of 31.9%.

The Indian advertising industry as a whole stands at ?61,878 crore, expected to reach ?85,250 crore by 2021, boasting a Compound Annual Growth Rate (CAGR) of 10.62%. The surge in digital ad spends will be driven by several factors, including advancements in voice-based search technology, the popularity of vernacular and video content, and the incorporation of engaging mobile experiences through technologies like augmented reality (AR) and virtual reality (VR).

Ashish Bhasin, chairman and chief executive - South Asia, Dentsu Aegis Network, predicts a significant influx of internet users in the next few years, particularly those who speak regional languages, leading to a rise in digital advertising in regional languages.

Currently, social media leads in advertising expenditure at 29%, followed by search (25%), display (21%), and video (20%). Digital video is anticipated to experience the fastest growth, with a projected CAGR of 37%, reaching ?5,545 crore by 2021.

In terms of brand categories, the service industry, particularly banking, financial services, and insurance (BFSI), is leveraging digital media platforms like YouTube and Instagram Stories to connect with users, allocating 38% of their marketing budgets to digital media. Other leading spenders include consumer durables (36%), e-commerce (34%), and telecom (31%).

Mobile, with a user base second only to China, is a key driver of growth for content platforms and advertisers alike. The market size of advertising spending on mobile is expected to skyrocket from ?5,102 crore to ?16,718 crore by 2021. Currently, mobile advertising accounts for 47% of total digital advertising budgets, projected to rise to 67% by 2021.

In addition to video content, advertisers are focusing on creating engaging ads for mobile platforms, incorporating voice-based interactions, and exploring emerging technologies like virtual reality, artificial intelligence, and the Internet of Things to enhance storytelling on digital media.