Online ad market to reach Rs 9,700 cr by year-end: IAMAI-IMRB Kantar

The digital advertising spend in India was estimated to be around Rs 7,300 crore at the end of 2016, growing at a rate of 40 per cent over 2015. The growth in spends on digital advertising is expected to continue at a CAGR of 33 per cent to touch Rs 9,700 crore by December 2017. The digital advertising market was pegged at Rs 5,200 crore by the end of December 2015. These are the latest findings of the ‘Digital Advertising in India’ report, jointly published by the Internet and Mobile Association of India (IAMAI) and IMRB Kantar. 

The report finds that the digital advertising spend is about 14 per cent of the total advertising spends in the country. In terms of volume, e-commerce leads the digital advertising spends with around Rs 1,361 crore, followed by FMCG, Consumer Durables and BFSI. However, a comparison of these verticals in terms of share of spends on Traditional vs Digital show that BFSI organisations incurred the highest share on digital advertising spends. Forty per cent of their overall advertising spend was on Digital followed by E-commerce, Telecom and Travel. 

Share: Traditional vs Digital Advertising Spends by Verticals 

In 2016, it is estimated that Search ads (close to Rs 2,044 crore) constituted 28 per cent of the overall ad spends, followed by Video (close to Rs 1,387 crore), which contributes to around 19 per cent; Mobile and Social Media (close to Rs 1,314 crore) each are at around 18 per cent and Display ads (close to Rs 1,168 crore) at 16 per cent. Spends on Video ads have shown a significant increase and accounted for 19 per cent of the overall spends in digital advertising. In all likelihood, this has been driven by new online entertainment (movie, TV series) channel launches, by enhanced monetisation across various platforms and high CPMs on premium content. This category is estimated to witness significant growth till 2020. 

Spend on mobile advertising (SMS/in-app ads) also recorded high YoY growth of 58 per cent from Rs 832 crore in 2015 to around Rs 1,313 crore in 2016. Spending on email ads has reduced substantially (-53 per cent YoY) and is now estimated at only Rs 73 crore. 

Spend by Ad Avenues & CAGR (Rs crore) 

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