Digital advertising in 2022 has surpassed all projections made at the beginning of this year, if GroupM’s year-end report is an indication.

According to the year-end report titled ‘This Year Next Year’ 2022 released on Monday, digital AdEx now accounts for a whopping 48.8% market share in advertising; TV represents just 36%. At the beginning of 2022, GroupM had estimated that digital will capture 45% share in advertising, while TV will remain at 39%, a unique proposition that surprised the advertising and media industry. Pitch Madison Annual Report 2022 had made similar predictions of digital advertising leaving behind TV in AdEx.

Despite dwindling market share, TV advertising has grown at 10.8% rate this year and is expected to grow at 13.8% in 2023. Digital advertising will see growth rise from 17.3% in 2022 to 21% in 2023.

Meanwhile, India’s total ad spends have reached $14.9 billion (approx Rs 122,000 crores) exhibiting nearly 15.8 percent growth and expected to grow at 16.8%, the media agency claimed.

TV Vs digital

TV has been losing its share of the ad pie over the last three years, while digital has been gaining. From 29 per cent market share in 2019, digital AdEx share grew to 38 per cent in 2020, 41 per cent in 2021 and touching 49 per cent in 2022.

Meanwhile, TV’s market share which remained above 40 per cent so far, has slid to 36 per cent in 2022, claims TYNY year-end report. It has added fuel to the ongoing debate on digital versus TV that has rocked the media and advertising industry for the last couple of years.

According to Mona Jain, CRO of ABP Network, the growing dominance of digital is a reality. “Well, this is a reality, and one can see that through the campaigns being released. Digital is taking dominance and many brands when planning campaigns are also looking at only digital communication - hence the forecast,” she noted.

Jain believes that television still works as a “reach generator” but increasingly digital is also being perceived as not only providing reach to campaigns but also providing enhanced frequency efficiently. “But I don’t know how effective it is and if the brand campaigns are able to create enough visibility and impact and create a sustained recall for the brands,” she quips.

Macroeconomic factors

One of the reasons for the shift to digital could be the stress on the economy and factors like the war and rising inflation leading to reduced margins for advertisers forcing them to be conservative and run only sustenance campaigns - where digital works better from an efficiency and outlay point of view, Jain explains.

Jain further adds, “The categories that are spending money like auto, pharma, e-commerce, and mobiles are redirecting money to digital. While FMCG is still spending on television and did report growth but with reduced margins, they too used television judiciously and focused on the efficiency of delivery and hence were limited on impact buys.”

According to Ashish Bhasin, Co-Founder and Chairman, RD&X Network, in adverse market conditions where advertisers are looking at conserving spends, brand spends are often delayed and curtailed. “Brands are undergoing a rationalization phase where every penny is accounted for,” he says.

Shift was inevitable

Marketers believe the shift towards digital video was inevitable as the number of connected users continues to rise across the length and breadth of India.

Rajiv Dubey, Media Head, Dabur India, shared, “With almost as many smartphone devices in hands of people as much as the TV universe, the change was bound to happen. This change will be felt across e-commerce platforms as well as unified payment systems become accessible to a wider population.”

The growth of digital has been consistent over the past decade with two big inflexion points. The first was in 2016 when Jio’s launch crashed data prices in India to amongst the lowest in the world. This together with the increase in smartphone penetration, estimated at over 600 million users, spiked digital consumption dramatically, shares Lloyd Mathias, Business Strategist and Investor.

To make matters worse, TV viewership shrank by 12% in 2022 with a sharp decline in consumption in major genres such as Hindi news channels (-21%), General Entertainment Channels (-23%), Movies (-11%) and Regional GECs (-3%).

Is a drop in viewership responsible for AdEx's shift to digital? Jain denies. “I don’t think it is essentially because of a drop in viewership- you do have programmes and genres of channels still delivering high numbers, nationally and regionally.”


Low cost, innovative formats

Digital advertising enables smaller advertisers with limited budgets to slice and dice consumers for their relevant segments, experts point out.

Mathias says, “SMEs can target consumers at a much lower cost than mass television buys where segregation of audiences to the level of personalisation is not possible.”

Mona Jain echoes the sentiments, saying, “Probably digital platform’s ability to innovate and create impactful communication at lower outlays to a targeted audience and also quantification of the same could be the reason for the shift.”

Besides, digital advertising moved beyond simplistic formats to more evolved formats like influencer marketing and social commerce. All these are contributing to moving the advertising pie toward digital.

TV plus digital

Bhasin insists that it is “digital plus TV '', not “digital versus TV”.

“Both TV and digital are growing in India. India is still in fact a fast growing market for TV. However, digital is growing faster than TV and its growth momentum will continue for two main reasons-5G network and addition of 250-300 million new internet users soon from small towns and rural India,” Bhasin says, adding that TV will continue to grow as it offers reach while digital helps in performance driven marketing.

Bhasin, however, clarifies that platforms that offer good content would grow, others won’t. “Content is not just king. Content is the emperor now. For users, channels or platforms are not important. They stick to good content. Going forward, channels offering good content will rise,” Bhasin opines.

New platforms

Decline of TV share is blamed on the rise of OTTs, short video platforms and social media platforms, all of which are competing for the share of time spent by the TV audience.

“Advent of CTV, as modern TV boxes are getting internet enabled, is opening the user to a plethora of quality content from the various OTTs.  Short video apps have also eaten into the share of time spent and eyeballs of the TV audience. This shift is also mirrored by the shift in ad spends on the medium,” said Sajal Gupta, Sajal Gupta - Chief Executive - Kiaos Marketing.

He added that CTV and OTTs also allow sharper targeting which makes the media reach out a lot more effectively and reduces wastages.

Matthias agrees. “The switch from linear TV to digital has accelerated significantly during the pandemic. Also, the growth of digital video – YouTube, Instagram Reels, and short format video such as Tik Tok clones like Moj, Josh, MX TakaTak, Chingari, and Roposo have attracted eyeballs in a short attention span world,” he shares.