The E4M Digital Report 2023 : An Analysis

Happy Tuesday Marketers!?

Wondering what’s happy this Tuesday? Well, it’s just the start of a new week, new opportunities, and a brand-new report!

I am Harshraj and today I am back here to dissect the? Dentsu e4m Digital Report 2023 that was released on 2 February 2023 for you.

Let’s see how this report attempts to capture the trends and media spends of the overall Indian Advertising Industry.

The e4m Digital Report 2023 captures the trends and media spends of the overall Indian Advertising Industry with a special focus on the Indian Digital Advertising Industry. It also puts forth the opportunities we could exploit to partake in the growth of the Digital Economy, by creating value.??

As per TAM (Total Addressable Market) estimates, India has 6 lakh advertisers in Print. If Digital can convert even a fraction of these, it can keep fuelling growth for years to come.?

The Market Size

At present, it has a market size of ?85,769 crores, growing at 18.1 % over 2021. The advertising industry is further expected to grow at a compounded rate of 15.07% to reach ?1,13,575 crore by the end of 2024.?

The digital advertising industry stood at a market size of ?29,784 crore, growing at 39.5% over 2021, and is forecasted to reach ?51,110 crores, with a compounded growth rate of 31 % by 2024.

The Spends

The digital media spends are expected to overtake that of television in 2023. Of the total advertising spends, 30% is contributed by the FMCG sector, followed by the e-commerce category with 18%.

The Largest Contributors to The Digital Media Industry

• FMCG - 38%
• E-commerce - 20%

Followed by?

• Consumer Durables?
• Pharmaceutical ?
• Automotive?

The telecom, FMCG, e-commerce, and pharmaceutical segments invest a large portion of their respective media budgets in digital media.

Digital media spends

The spend on online video is expected to grow at a rapid pace and be at par with social media spends by 2024. The FMCG category uses a large portion of its digital media budget on online video while pharmaceutical and e-commerce segments spend a large majority of their budgets on paid search.

The Indian Advertising Industry

The advertising spends of categories such as e-commerce, retail, consumer durables, pharmaceuticals, and BFSI have grown the most in the past year.?

The evolution and growth of the digital economy will further catapult the growth of the Indian advertising industry, making it the fastest growing market in the world over the next few years.

We expect the Indian advertising industry to grow by 14.7% to reach Rs 98,363 crore by the end of 2023.?

This growth can be attributed to major events such as the?

Furthermore, we estimate the Indian advertising industry to grow at a compounded rate of 15.07% to reach Rs 1,13,575 crores by the end of 2024.?

With digital media contributing the largest share of media spends, the share of television Is expected to come down from the current 40% to 37% in 2023 and further to 34% by 2024.

?Also, spends share of print media may drop from the current 21 % to 19% by the end of 2023.?

The telecom segment spends half of its media budget on digital media, while 42% of its media budget is spent on television media. Compared to the previous year, the telecom segment's spending on digital media has increased by four times.

This can be attributed to the growth of digital infrastructure and its adoption among consumers.?

Growth in the usage of digital transactions and e-commerce is also driving advertising spends on digital media.

In addition to these major factors, the growth of advertising opportunities on e-commerce and D2C platforms is pushing digital media to new heights.?

In addition to the development of the mass markets for digital media applications, there has been a strong push from the Indian government towards making digital media all-inclusive.?

The initiative of Digital India is driving the development of digital infrastructure, business transformation, and digital commerce through numerous applications viz. Unified Payments Interface (UPI), Aadhaar, Open Network for Digital Commerce (ONDC), and Government eMarketplace (GeM), among others.

Spends on Digital Advertising Formats

• Paid Search - 23% (?6,895Cr.)
• Social Media - 30% (?8,757Cr.)
• Online Video - 28% (?8,319Cr.)
• Display Banner - 16% (?4,816Cr.)?
• Others Including Classified - 3% (?997Cr.)

Social media and online video formats have consistently been the strongest and largest advertising formats on digital media.

The Three Most Significant Martech Developments Expected To Impact The Digital Marketing Industry In 2023

Audio and video advertising, Metaverse and Web 3.0 used in gaming to target audiences, and more were seen in 2022. These trends have changed how we live and accelerated market digital transformation faster than experts predicted.?

That means brands must be more transparent, think about their messaging, and tweak their strategy in the coming year. It also implies that marketers must be aware of upcoming trends in order to plan for and capitalise on any new developments.

The Most Preferred Way of Promoting a Brand - Video Advertising

According to WeareSocial's Feb 2022 India report6, 95% of Indians watch videos weekly, 97.2% stream TV content online, and 54.5% watch streaming TV as a percentage of total TV time. YouTube ads reached 71 % of India's internet users-31.2% female, and 68.8% male.?

A study by Bain and Company revealed India's online video user base had scaled to over 350 million people, growing 24% between 2018 and 2020, nearly twice as fast as China and Indonesia.?

The highest levels of engagement and increased personalised content have been observed on OTT and CTV platforms, which have helped brands reach their intended audience.

So, when it comes to scale, video is accelerating faster than we expect.

The New Opportunity - Mobile Commerce

A recent survey by Deloitte found that the average person checks their phone 47 times per day. This demonstrates how profoundly mobile and wireless technology have affected the general public.?

In 2023, marketers and consumers will maximise value. Consumers can use their purchasing power to get the most out of their money, and marketers can maximise their advertising ROI.

Digital Media Spends Across Industry Verticals

• FMCG - 38% (?11,403Cr.)
• E-commerce - 30% (?5,982 Cr.)
• Consumer Durables - 6% (?1,683 Cr.)
• Pharmaceutical - 5% (?1,517Cr.)?
• Auto - 5% (?1,329Cr.)
• Telecom - 4% (?1,148Cr.)
• Education - 3% (875Cr.)
• BFSI - 3% (?854Cr.)
• Media & Entertainment - 1% (?391Cr.)
• Retail - 1% (?353Cr.)
• Others - 14% (?4,260Cr.)

Opportunities in the Future Digital Economy

• E-commerce through the emergence of D2C platforms: Before the onset of hyperlocal and D2C services, manufacturers seldom connected directly with the customers who purchased their products. Through this model, brands can now interact with customers at every stage of their sales funnel.
• Evolution of Experiential Marketing Through Web3 and Extended Reality: With the advent of 5G in India, consumers are inching closer to a mixed reality experience very soon in the form of the metaverse. Even though actual users have been sparse so far, most people have a myriad of uses and expectations from XR in mind and are quite excited about the prospects of experiential media.

Creating Value In The Indian Digital Economy

Customer convenience acts as a solid bridge between the digital and the physical world, ensuring the enhancement of the customer experience and satisfaction. Convenience further becomes the backbone of e-commerce usage helping customers to discover the benefits along with the addition of dimensions such as decision convenience, availability convenience, and transactional convenience.?

Experiential media, marketing, and advertising provide consumers with an immersive, experiential, and spatial experience that enables advertisers and marketers to communicate and engage with their customers effectively with an additional touch of hyper-personalisation.

Opportunities in the Web3 economy will be tapped through the below marketing and digital developments.

• Ambient Intelligence - Using ambient Intelligence (Ami), marketers, and advertisers can now integrate information streams from diverse sources rather than relying on individual touchpoints, thus, building a multi-dimensional picture of their customers.?
• Hyper Personalization - With 'hyper-personalisation', brands can now communicate with each individual customer by offering personalized deals and offers.?
• Connected Homes - The trend of artificial intelligence in our homes is already ongoing and will only accelerate over the next few years. In fact, we have already become accustomed to Google's Nest and Amazon's Alexa being able to adjust the settings of smart objects within our houses to fit pre-set parameters. ?
• 6G and Wireless Future - 6G networks are expected to provide more diverse capabilities than their predecessors and are more than likely to support applications beyond current mobile applications. In the future, mobile network operators will adopt flexible, decentralised models for 6G, with local spectrum licensing, spectrum sharing, and infrastructure sharing.?
• Decentralized Local Commerce - The future of e-commerce in India will be in the form of open commerce marketplace which are decentralised networks driven by hyperlocal services and will benefit the local community.
• Immersive, Gamified, and Personalized Entertainment - The entertainment industry includes all forms of video content on different platforms and is well on its way to becoming immersive, gamified, and personalised.?
• Experiential Marketing and Advertising - The line between physical and virtual spaces will blur with the rise of the spatial web. It will revolutionise travel, workspace, retail, advertising, events, and experiences, and the customer experience will evolve exponentially. It will extend our reality to the virtual, mixed, and augmented.

Till next week, stay curious, stay updated, and most importantly, stay SUBSCRIBED!