Advertising in India has come a long way in the last few years. The industry is one of the fastest-growing markets in the world, with India being the third largest contributor in the world of advertising, after China and the US, according to Statista 2023. As per a Dentsu report, India's ad revenue is expected to grow by 15.7% in 2024 to reach $13.8 billion. While several big economies may see single-digit growth in ad revenue, such as China (7.9%), UK (4.8%) and US (5.1%), India is expected to see a whopping 12% growth in ad revenue in 2023, as per the recent GroupM: This year, Next year report. As per the report, India is the only country among the top 10 nations that is poised to see a double-digit growth in ad revenue again this year. The country has also seen a massive boost in digital advertising, and with the economy going strong, that growth is here to stay. Spending is set to take sharper growth and Indian brands are expected to invest higher on advertising this year.
e4m reached out to experts to talk about how the Indian market is unique and what we should expect from the country’s A&M market in the coming months.
What is driving India’s ad market?
Dentsu in its report said that growing by 36.6% and totaling $5.0 billion, digital is the primary driving force of the Indian ad market. “In 2023, digital is set to overtake TV to become the largest media in India for the first time. This surge is attributed to the increased penetration of smart devices and internet connectivity. Robust e-commerce activities have also pushed digital to new heights, especially performance outcome-based media including search, social and video. Meanwhile, TV is forecast to experience moderate growth of 5.1% in 2023 (35.5% share of spend), mainly invested by e-commerce brands.
Despite its effectiveness and brand safety benefits, limited TV inventory leads advertisers to shift their investments to online video. Looking ahead, the Indian ad market is expected to grow by 15.7% in 2024 to reach $13.8 billion.”
Says Hareesh Tibrewala, joint CEO of Mirum India, “Even though the mood is cautious on account of global headwinds, we continue to see healthy advertising spends in the Indian market. Our GDP growth seems to be good, which basically means that we are adding more consumers every month and there is increased consumption of goods and services. All of this is driving brand growth and thus advertising growth.”
Comparing the Indian market with that of the world, Kumar Awanish, Chief Growth officer, Cheil India, mentions, “India probably, as of now, has 0.5% of the overall GDP in an advertising industry, in comparison to the other markets like US, UK, where it is roughly in the range of 1.5% to 2.5%. So, in comparison to overall GDP, we are slightly on the lower side. But that has nothing to do with the growth perspective. India’s ad market will grow to anywhere between 12% and 18%.”
Talking about the rapid pace of digital advertising growth in India, Mitesh Kothari, Co-founder and CCO, White Rivers Media, says “In the global slowdown, the performance of our ad market may likely be affected by the overall economic conditions of the country along with industry-specific trends. We have many multinational companies deciding their ad budgets on the basis of global trends, because of which it is possible that a global slump in ad spends could have an impact on our ad market. However, it is necessary to note that the rise of digital advertising has opened up multiple new doors for us to reach Indian consumers. Owing to our domestic market dynamics like the large population, increasing internet penetration, and expanding digital infrastructure, we may safely expect a growing momentum of ad spends within the country.”
India’s ad industry uniqueness
Awanish opines that D2C space in India has created a lot of buzz, and is hence driving growth for the market. “What is unique about the Indian advertising industry is that after the pandemic, there have been a lot of new entrants, and the way marketing used to be seen has changed. D2C is the new toy everyone has and all the advertisers have started focusing much upon their D2C space. There are some of them who are trying to use slightly advanced solutions, while the startups are just trying to get a sense of it. So, because of that reason, I think in the advertising space, this D2C phenomena is growing fast and because this is a new thing to adopt, there is a lot of activity in the entire advertising domain. That is grabbing the attention of the market at this point in time.”
Kothari speaks about how India is different from other markets in the world. “India has seen massive growth in terms of technology in recent years. The nationwide expansion of 5G along with affordable smartphones has changed the game of the digital ecosystem in the country. Over INR 20,000 crores of incremental ad spends are predicted in the year 2023 compared to the previous year. Within the rapidly evolving digital advertising industry, India now ranks eighth globally in ad spends.
India is a country with diverse cultures and an efficient understanding of these regional nuances makes a huge difference in terms of engagement with the consumers. Trends have drastically changed with an increasing preference towards online shopping, sports engagements, content consumption, and content creation. Our ad markets are also known for their creativity and diverse ad formats that employ a range of techniques and emotions.
With a deep understanding of the country’s massive population’s cultural diversity and varying preferences, we stand in a proud position in this exciting and challenging landscape.”
