Despite economic headwinds and record inflation, digital advertising in India recorded decent growth in FY23 withGoogleand Meta together reporting Rs 48,300 Cr ofadrevenue,which is bigger than the entire TV industry’s (Rs 40,000 Cr).
If we includeAmazon's(Rs 5,380 Cr) and Flipkart’sadrevenues in this, the four tech firms garnered a whopping Rs 55,000 Cr in the last fiscal year.
As per the Pitch Madison Annual Report (PMAR 2023), the digital adex was expected to touch Rs 43,000 crore in 2023, commanding nearly 40 percent share in the total advertisingrevenue.
Small and Medium Businesses (SMBs), creators and influencers are driving theadgrowth of the tech platforms, where the entry barrier is low, targeting is focused and return on investment (ROI) is high.
In contrast, TV channels' majorrevenuesource is large advertisers, many of which had either tightened their purse strings last fiscal to negate the inflationary pressures or shifted moreaddollars to digital for better ROI and sales conversions.
“Digital advertising overall grew faster than TV, as has been the trend for the past few years but this was further magnified because of SMBs who can directly advertise onGoogleandMetawithout necessarily going through anyadagency”, says Ashish Bhasin, Founder The Bhasin Consulting Group, and Former CEO APAC and Chairman India, Dentsu, said.
According to Bhasin, digital is expected to grow at an 18-20 percent rate in 2024 while TV growth will be around 8 percent.
Several reasons are leading to the consistent growth of digital over TV, experts say. “Indian consumers are spending more time on social media platforms, many of them are buying directly from YouTube, Instagram or Facebook. Advertisers will put their money where consumers are. Besides, these platforms offer better engagement and conversions compared to TV,”, says Shradha Agarwal, Co-Founder and CEO of Grapes.
The entire consumer buying funnel for almost everything can now be mapped on digital, according to Hareesh Tibrewala, joint CEO of Mirum India, explaining why advertisers prefer digital over TV.
While TV channels rely on a small number of advertisers, digital platforms have a very large bouquet of clients, says Rahul Vengalil, Executive Director of Everest Solutions, a Rediffusion group company. “Meta, for instance, has 6 million advertisers on its platform globally. Let's take education as a category. If there are a few 100 advertisers on TV, there are a few 1000s of them onGoogleand Meta.”
India's digital advertising market witnessed a 54 percent growth in 2023 compared to 2022 and 100 percent since 2021 in terms ofadimpressions, according to statistics obtained from TAM.
However, the picture will be clear once the agencies release their annual reports, experts point out.
