Overall ad spending in India is estimated at 1.32 lakh Crores (USD 16 Bn) in FY2024, growing at ~6% in the fiscal. Digital Advertising which accounts for ~55% of total spends is set to grow at 6-7% in FY 24-25. These and many other interesting statistics were released in a comprehensive report released by Redseer Strategy Consultants.
Despite slowdown in ad spending, Advertisers increased their ad spending on Challenger Platforms like retail media (ecommerce, quick-commerce etc.), and content platforms (OTT Audio, SFV, etc.) owing to high conversion potential and wider reach among Tier-2 audiences respectively.
With consumption to rebound in the next 4-5 years, advertising spend is projected to grow at 9- 10% CAGR over the course of the next 4 years, with digital advertising growing at 11-12% in the same period, notes Red Seer.
Mukesh Kumar, Associate Partner at Redseer said, “Retail Media platforms are set to increase their market share from ~18% in FY 23-24 to ~20% in FY 24-25 and content formats to maintain their share at 20%”.
“The Digital Advertising market in FY2024 is expected to remain muted at a ~6-7% growth rate and reach US$ 8.8 – 9.3 bn in the fiscal, with Digital giants set to moderate their market share from ~62% in FY 23-24 to ~60% in FY 24-25”, he added.
Content-based platforms are set to continue retaining their ~20% share this Fiscal, with growth driven by Shortform Video and OTT Video, according to the Report.
Key reasons why Advertisers are increasing spending on Challenger platforms include specific targeting of high intent users, greater reach within Tier-2 audiences and increased attention span on the platforms.
Some of the other key trends expected to take shape over the course of the period include the growth in MSME advertising spend in tandem with their growing digital maturity, increasing investments towards building video-based and interactive advertising and a focus on boosting the measurability of ads on challenger platforms.
While the BFSI sector is expected to increase advertising spends to accelerate the uptake of financial tools, sectors such as healthcare invest in digital advertising to accelerate the promotion of preventive healthcare solutions. In the CPG & Retail sector, legacy players are utilizing the medium to advertise their own D2C platforms.
Five key trends that are expected to take shape in the next 2 years include;
- Growing interest in Influencer advertising due to lower cost+efficiency of the format
- Tier 2/3 audiences are the Aadvertisers favourites
- Growth of Performance ads with trackable tools
- Programatic advertising coupled with contextual Ads
- Integration of GenAI across the entire advertising value chain
“With digital natives shaping the future of advertising at large, brands have a never-before opportunity to address a much-larger and diverse consumer pool. The rise of challenger platforms has defined the growth in digital advertising in FY 24-25 and is expected to remain so in the next years or so”, summarises Mukesh Kumar.
Discover more from Retail Updates
Subscribe to get the latest posts sent to your email.
