Mobile adoption to lead increase in digi ad spends over Rs 23,000 crore by 2020

An increase in the smartphone adoption of Indian consumers has spurt growth in the digital advertisement sector and is expected to reach Rs 23,795 crore by 2020, a report by Dentsu Aegis Network said on Tuesday.

Being a ‘harbinger’ of growth, the share of spends on digital media is expected to grow at 24% by 2020 from the current 12%, Collin Furtado reported from the scene.

Share of spends on digital media is expected to reach 24% by 2020 from th3 current 12%: DAN e4m report .@ZeeBusiness

— Collin Furtado (@C0llinFurtado) February 28, 2017

“A large proportion of this growth can be attributed to the increasing penetration of internet access and smartphone ownership in India,” the Dentsu report said.

The Dentsu report said that the digital advertising industry currently stands at Rs 6,825 crore.

Currently the total Indian ad spends industry was at Rs 56,398 crore, the report said, adding that it is expected to grow at a rate of 14% to reach Rs 64,488 crore by end 2017.

“…with a CAGR of 15% (the ad spends industry) to reach Rs 99,595 crore by the end of 2020,” the report said.

Collin Furtado reported that sector-wise e-commerce contributed the highest proportion of its marketing budget on digital at 25%.

Image Source: Dentsu report

E-commerce contributes highest proportion 25% of overall mkting budget towards digital media: DAN e4m Digital Report 2017 .@ZeeBusiness

— Collin Furtado (@C0llinFurtado) February 28, 2017

Among the total industry ad spends, e-commerce was the biggest spender on digital media, accounting for 19% of the total digital spends.

The segment spent Rs 1,309 crore on digital media while FMCG and telecom sector followed closely with Rs 935 crore spends respectively.

E-commerce spent Rs 1,309 cr on digital media, FMCG, Telecom were next with Rs 935 cr each: .@dentsuaegis .@e4mtweets report .@ZeeBusiness

— Collin Furtado (@C0llinFurtado) February 28, 2017

FMCG was the second highest in total digital spends at 14% while telecom was at 12%, the report said.

The report also pointed out that the FMCG sector spends the highest on TV i.e. 72% of its marketing budget followed by print which was at 18%.

“It (FMCG) spends 6% of its marketing budget on digital media. The automotive sector spends the highest on print (46%) followed by TV (33%). 10% of the marketing spends go to digital, followed by 6% on OOH. Among all industry verticals, e-commerce spends the highest proportion of its marketing budget on digital (25%). This is only next to their spends on TV (38%) and print (28%),” the report added.

Even retail sector much like the FMCG sector spends the highest on print at 49%, the report said, adding that its spends on TV and OOH were 17% and 15% respectively of its marketing budget.

Only 12% of marketing spends in the retail sector are made on digital, the report added.

“Telecom, BFSI and consumer durables sector spend the highest on TV and print, followed by digital. E-Commerce, telecom, BFSI and media & entertainment (M&E) spend nearly one fifth of their marketing budgets (19%) on digital media,” the report added.