Digital ad market to reach Rs 12,046 Cr by December 2018, FMCG, consumer durables and ecommerce form top 3 verticals

The digital advertising spends in India was estimated to be around Rs 9,266 crore at the end of 2017, growing at a rate of 27 percent over 2016. The growth in spends on digital advertising is expected to continue at a CAGR of 30 percent to touch Rs 12,046 crore by December 2018. These are the latest findings of the Digital Advertising in India 2017 report, jointly published by the Internet and Mobile Association of India (IAMAI) and Kantar IMRB, on Thursday. According to the report, digital advertising spend is about 16 percent of the total ad spends in the country (estimated to be Rs 59,000 crore).

The report finds that Search takes the lion’s share of digital ad spending. Twenty-seven percent of total digital ad spends (Rs 2,502 crore) is made on search. This is followed closely by spends on video and mobile, which is around 19 percent with ad spend being Rs 1,779 crore and Rs 1,761 crore respectively. Spends on social media stand at 18 percent, with ad spend around Rs 1,668 crore, and least being display ads with only 16 percent with a total ad spend of only Rs 1,483 crore. Spend on mobile advertising (SMS/in-app ads) also recorded high year-on-year growth of 34 percent from Rs 1,314 crore in 2016 to around Rs 1,761 crore in 2017. This is because advertising on mobile is considered to be innovative and conveys the message clearly. Also, in-app advertising avenue is currently being explored and used across various industry sectors since it is believed to fetch better monetisation.

In terms of total spend, BFSI leads the digital ad spend, with spends around Rs 2022 crore, followed by ecommerce. A comparison of these verticals in terms of share of spends on traditional versus digital show that BFSI brands incurred the highest share of advertising on digital media with 46 percent of their overall advertising spends are digital, followed by ecommerce, telecom and travel. 

Another interesting trend is the growth of ‘native ads’ as a popular option. These ads operate as a connector between advertisers and publishers. It solves a problem for them by providing consumers with content that does not disrupt their online experience, and is more likely to be seen by them.

Moreover, from a consumer’s perspective, the proportion of internet users who believe that online ads are informative and that they help them in finding the right product/service they were searching for is greater than in 2016. More importantly, there has been an increase in the number of consumers who feel that the relevance of digital advertising has increased.