Digital Push helps Indian Advertising Space Overcome 2020s Degrowth; Slated to grow exponentially through 2021

The Indian advertising space has come very far. From being a traditional industry dominated largely by print and then television advertising, the ingress of Internet and smartphones has ushered in a new digital era that has taken the entire industry by storm.

Let's look at some absolute figures. Touted to be valued at Rs 56,490 crore in 2020, a Dentsu report concluded that it will grow at a CAGR of 11.59 percent to reach Rs 70,343 crore by 2022. Although the pandemic caused a degrowth during 2020, the industry is slated to bounce back swiftly at a healthy growth rate of 10.8 percent and reach Rs 62,577 crore by the end of 2021.

Unsurprisingly, this impending growth will be powered by the digital advertising. Despite the pandemic, the digital advertising space grew at 15.3 percent in 2020 and is expected to expand at a CAGR of 22.47 percent to reach a market value of Rs 23,673 crore by 2022. For the past 4-5 years, digital advertising has consistently been growing by 26-27 percent according to stats presented by a DAN digital growth.

This steady growth has been hand in hand with the massive digital push across India. As consumers' consumption patterns have evolved, so have the advertising strategies followed by brands. Through the digital medium it becomes easier for brands to really understand their consumers' behaviors and patterns. It also defies the bounds of location and time.

With the internet penetrating across India and going deeper into semi urban and even rural areas, there has been a rise in vernacular advertising. In the coming years, this trend will only strengthen and amplify. Similarly consumers have also gravitated largely towards video based advertising. With the average watch time going up, there has also been a subsequent rise in online transactions and purchases or brand engagement activities after viewing the ads. Similarly, influencer based advertising has also been on the rise.

Consequently adtech has come forth as a burgeoning sector. Helping companies advertise smarter and more effectively, there has been a rise in the number of startups coming up with innovations in the advertising space.

As the market matures, it will be interesting to watch how young startups leverage cutting edge tech such AI, automation, data analytics etc to redefine the Indian advertising space.

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