Indian digital ad sector saw 25% growth rate in 2019: IAMAI, Nielsen report

The Indian advertising sector recorded a growth rate of over 25% in digital spends in 2019, according to a research report. 

Additionally, the overall advertisement market grew to reach Rs 70,568 crore, the Internet and Mobile Association of India (IAMAI) and Nielsen Media said in the report.

In 2018-2019, the country spent Rs 14,819 crore on digital advertising, a sector that is expected to see sharp growth amid the Covid-19 pandemic, it said. More than 90% of the future expenditure in the segment will be directed towards mobile advertisements, it added. 

India has one of the largest internet user bases that is also at a nascent stage, which will allow digital advertisements to grow dramatically over the next few years, it said.

The country directed 21% of its total ad spends towards the digital medium in 2019, a 3% increase from the previous year. The general elections, cricket world cup and the Indian Premier League were the major drivers, the report said.

Norway topped the digital ad expenditure list at 69%, followed by China at 68% and the UK at 65%. Additionally, Denmark, Sweden and the US allotted 62%, 60% and 54% of their total ad spends to digital, respectively. 

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Additionally, fast moving consumer goods (FMCG), ecommerce, automotive, as well as travel and tourism are the key sectors contributing to India’s digital ad spends, it said. 

In terms of proportion, the banking, financial services and insurance (BFSI) and ecommerce sectors allocated 46% and 40% of their respective advertising budgets to digital, while the telecommunications industry spent 33% on the digital domain.

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Video was the preferred channel, taking 34% of the ad expenditure pie, followed by display ads at 31% and search advertising at 30%. Less than 1% of the funds were spent on email ads, while audio only saw 0.5% of the money. Traditional methods, such as classifieds and content sponsorship, accounted for 3.5% of the total expenditure, the report said.