Advertising industry witnessed a de-growth of 17.5% in 2020: dentsu

The digital advertising industry has witnessed growth in market size from Rs 13,683 crore by 2019 to Rs 15,782 crore by 2020, growing by 15.3%

With the country coming to a standstill amidst the Covid-19 induced lockdown, the Indian advertising industry witnessed a de-growth of 17.5% over 2019, a study conducted by dentsu international revealed. The advertising industry, which currently stands at Rs 56,490 crore, is expected to make a come-back and will grow by 10.8% to reach Rs 62,577 crore by the end of the year 2021. Furthermore, it is expected to grow with a CAGR of 11.59% to reach Rs 70,343 crore by 2022.

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As per the report, the digital advertising industry has witnessed growth in market size from Rs 13,683 crore by 2019 to Rs 15,782 crore by 2020, growing by 15.3% from the previous year. Digital media will grow at 20% to reach a market size of Rs 18,938 crore by 2021 and with a CAGR of 22.47% to reach Rs. 23,673 crore by 2022, the study said. “2020 presented a monumental challenge to us – as individuals, business and society. We, at dentsu, expect 2021 to witness a colossal rise in digital advertising,” Anand Bhadkamkar, CEO India, dentsu, added. The biggest spenders on digital media are BFSI (57%), consumer durables (45%), telecommunications (40%) and e-commerce (39%).

The study highlighted that television has an unparalleled reach in the media market and contributes to the largest share of media spends at 41% (Rs 23,201 crore) in 2020. Followed by spends on digital (28%, Rs 15,782 crore) and print (25%, Rs 13,970 crore).

Furthermore, FMCG has the highest expenditure on advertising with a contribution of 20% at Rs 11,554 crore closely followed by e-commerce of 17% at Rs 9,788 crore and consumer durables of 10% at Rs 5,751 crore. FMCG spends a large majority of their advertising budget on television (64%) while retail, automotive and media and entertainment segments spend a large share of their advertising budget on print.

The report also stated that the rapid increase in mobile usage and internet penetration has led to 75% (Rs 11,836 crore) of digital media spends on mobile devices. Majority of the online expenditure on mobile devices goes to online video 29% (Rs 3,458 crore) and social media accounts for 29% (Rs 3,429 crore). People belonging to tier-II and tier-III cities have contributed the most to the growth of the digital advertising market, the study noted.

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