IN INDIA 2021 DIGITAL ADVERTISING - e4m Events
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PRESENTS PRESENTS CO-POWERED BY CO-POWERED BY CO-GOLD PARTNER CO-GOLD PARTNER DIGITAL ADVERTISING IN INDIA 2021 1
PRESENTS CO-POWERED BY CO-GOLD PARTNER Foreword 2 020 presented a monumental challenge to us – as individuals, business and society. It made us the elderly, meanwhile, gradually moved to using cashless digital payment methods instead of cash witness time and space in ways transactions. Result? The pandemic that many generations had only began to aggressively fuel digital read about in textbooks or had adoption across the country leading heard of from aging bystanders of to a 15.3% growth over the previous yester-history. Yet, I must reiterate year. that despite all the aching that this hailstorm of a year introduced into Digital has been the largest and only our lives, 2020 was also maleficently medium to grow amid this global unique. It forced us into depths of pandemic in India and we will persist insights that we could never have to work with our clients on this comprehended otherwise. It also transformational journey. Also, it’s reminded us of what the human the 3 Vs (voice, video and vernacular) spirit could eventually endure and that will continue to remain at the the magnificent resilience that it is epicentre of all our focus areas. capable of! We, at dentsu, expect 2021 to witness The year was extremely tough on all a colossal rise in digital advertising. of us and scarred the economy and We also recognise the need for a businesses alike. In fact, every little business intelligence report that aspect of advertising had to take the can give directions toward which bearing as the industry slipped by a this industry is moving with ever- massive 17.5% over 2019 due to the changing client demands and market pandemic. Categories such as events, scenarios. The lack of detailed and seminars and sports – areas that are accurate Digital Advertising Spends chiefly reliant on physical human is surprising for a medium that lends interactions - took the steepest fall. itself to measurement. It is to fulfil this gap that the digital agencies at Nevertheless, the pandemic also dentsu have collaborated with e4m fostered something new. It created once again to launch the 5th edition demand for e-commerce purchases of our Digital Report that extensively in tier-II and tier-III cities and covers Digital trends, spends and brought in a behavioural shift in insights across all sectors. elderly consumers. Customers from tier-II and tier-III cities began to We look forward to your thoughts prefer buying from online retailers and opinions to help sharpen our offering delivery at flexible timings approach towards this fast-growing while being cautious about safety industry as we strive to expand, and health during the pandemic; together. 3
PRESENTS CO-POWERED BY CO-GOLD PARTNER The shape of Recovery is DIGITAL C OVID-19 without a doubt provided the much required boost for digital adoption in India. Digital translations level of TV spends today, something that might have otherwise happened only by 2025. clocked 100 million a day, and as per RBI estimates, it could touch a jaw Scale brings with it a demand for dropping 1.5 billion per day, totalling greater accountability and with Rs 1.5 trillion by 2025. What would digital ad spends look set to equal have otherwise taken another five those on TV, a larger number of CMOs years of effort by the government will seek increased transparency and and private players, was delivered ROI. Thus far, the medium has been by COVID in one year! used largely as a lead generation platform, heavily funded by big Not surprisingly, the media and national advertisers. Social media advertising sector witnessed a platforms have been under immense renaissance of sorts too. OTT content scrutiny for content and with major consumption, already growing on the brands across western markets back of the Reliance Jio disruption taking a stand against toxic content, in the telecom space, went truly these companies will in all likelihood mainstream, with growth touching no longer have a free run without exponential rates. Surveys estimate taking the onus for the content on that there has been a 5x increase their platforms. in consumers spending 16+ hours weekly and a 4x increase in those With India deeply integrated into spending 12-16 hours weekly on OTT the global digital ecosystem, all of platforms. this will also have a bigger impact in India. The chorus for third party Digital advertising growth too data measurement, which Digital naturally followed. In a year when currently lacks, is growing, as are overall ad spends shrunk by 17%, demands for more transparency. A spends on Digital grew by a healthy brand spending a quarter of its ad 15%, thus widening the growth budget on digital platforms is unlikely gap between traditional and digital to do so as an experiment anymore. advertising even further. As our Reliable data, better measurement, report says, by the end of 2022, lesser fraud and more ROI will be the digitaladvertising is likely to touch the name of the game. 5
PRESENTS CO-POWERED BY CO-GOLD PARTNER To be able to attract a larger share of As video consumption grows, and the advertisers’ wallet, digital will also social media provides the fuel for have to prove itself to be a platform that growth, the digital content useful enough for building brands, economy has reached an inflection something that only TV can deliver point. Over the next three years (five right now. On the flip side, as digital years being too long to make any penetration spreads deeper into reliable predictions about the future), languages, it will attract attention significant money will be pumped into and money from regional brands, content curation. A large majority who heavily depend on language TV of that money will be sought to be for reach, further fuelling the growth recovered through advertising, thus of ad spends. making the competition between digital and legacy media businesses, As video consumption has led digital especially TV even fiercer. India is growth, it has left a lasting impact on uniquely placed in the sense that key the creative side of the business too. leading ad-driven OTT platforms are Where 60 and 30 second ads were owned by TV companies and how they previously the norm, they have now re-focus their businesses in the post- been taken over by six seconders COVID era will determine which way thereby creating an ecosystem of this battle goes. If Star’s integration content curators who specialise in of Disney and the focus on Hotstar short video content. Tik Tok’s loss is any indication, TV companies see has been the gain for YouTube, Daily their future as digital streaming Hunt, Facebook, Zee5, MX Player, behemoths. And that future is full of InMobi and many others. The digital exponential growth possibilities. advertising ecosystem also saw its first unicorn in the form of InMobi in 2019, truly establishing content and thereby advertising as a primary integrated service on mobile devices. 6
PRESENTS CO-POWERED BY CO-GOLD PARTNER 1 The Indian Advertising Industry • Ad spends on media • Media spends across industry verticals 2 The Indian Digital Advertising Industry • Spends on digital ad formats • Growth of E-commerce advertising in India • Digital media spends acros industry verticals • Digital Media Spends across devices 3 • Trends in digital media buying Changes in Indian consumer behaviour • Growth in the usage of voice technology in India • Drive towards vocal for local language • Transition towards digital news media • Boost in online gaming in India due to the pandemic • Shift in consumer spends • Adoption of online education in India 4 Research methodology 7
PRESENTS CO-POWERED BY CO-GOLD PARTNER Executive Summary The global outbreak of the pandemic transformation. Thus, businesses sent shockwaves across the global have reshaped their functioning by economy. Various industries and diversifying, adapting to the market verticals experienced the impact of situations. This has catalysed the the pandemic, including the media changing consumer habits towards and advertising sector. The pandemic digital and the advent of the new era accelerated the process of digital for the Indian economy. Indian Ad Industry as of 2020 Advertising Digital Advertising Industry Industry 20 `56,490 Cr. `15,782 Cr. 20 ($7.74 Bn) ($2.16 Bn) 20 `62,577 Cr. `18,938 Cr. 21 ($8.57 Bn) ($2.59 Bn) 20 `70,343 Cr. `23,673 Cr. 22 ($9.64 Bn) ($3.24 Bn) 11.59% 22.47% CAGR CAGR The Indian advertising industry 10.8% to reach Rs 62,577 crore by the currently stands at Rs 56,490 crore end of the year 2021. Furthermore, and it has witnessed de-growth of it is expected to grow with a CAGR 17.5% over 2019 due to the pandemic. of 11.59% to reach Rs. 70,343 crore The advertising industry is expected by 2022. The digital advertising to make a come-back and will grow by 8
PRESENTS CO-POWERED BY CO-GOLD PARTNER industry has witnessed growth in followed by online video (28%, market size from Rs. 13,683 crore Rs. 4,366 crore) and paid search by 2019 to Rs. 15,782 crore by 2020, (24%, Rs. 3,725 crore). Online video growing by 15.3% from the previous has seen the fastest growth from a year. Digital media will grow at 20% share of 22% in 2019 to 28% in 2020. to reach a market size of Rs. 18,938 The FMCG and media & entertainment crore by 2021 and with a CAGR verticals spend the largest share of of 22.47% to reach Rs. 23,673 crore digital media budget on online video, by 2022. while e-commerce spends the most on paid search. Television has an unparalleled reach in the media market and contributes The rapid increase in mobile usage the largest share of media spends and internet penetration has led to at 41% (Rs. 23,201 crore) in 2020. 75% (Rs. 11,836 crore) of digital media Followed by spends on digital spends on mobile devices. Majority (28%, Rs. 15,782 crore) and print of the online expenditure on mobile (25%, Rs. 13,970 crore). Currently, devices goes to online video for 29% FMCG has the highest expenditure (Rs. 3,458 crore) and social media on advertising with a contribution accounts for 29% (Rs. 3,429 crore). of 21% (Rs. 11,554 crore) closely followed by e-commerce (17%, People belonging to tier-II and tier-III Rs. 9,788 crore) and consumer cities have contributed the most to durables (10%, Rs. 5,751 crore). the growth of the digital advertising FMCG spends a large majority of market. The pandemic fostered the its advertising budget on television demand for e-commerce purchases (64%) while retail, automotive and in these cities. Consumers have media & entertainment segments preferred to purchase from online spend a large share of their retailers offering delivery at flexible advertising budget on print. The timings while being cautious biggest spenders on digital media about safety and health during the are BFSI (57%), consumer durables pandemic. The shift in habits and (45%), telecommunications (40%) behaviour is evolving as the elder and e-commerce (39%). consumers are preferring to use cashless digital payment methods Digital is growing rapidly and the instead of cash transactions. The pandemic has propelled the adoption. pandemic fuelled the adoption rate Advertising spends on digital media of digital in India, coupled with the has increased from a share of 20% high consumption of digital video and in 2019 to 28% in 2020. It is further the growth of regional content. The expected to reach 34% by the end businesses have been future-proofing of 2022. Spends on digital media are by being adaptive to transformation, led by social media with the largest merging different types of business share of 29% (Rs. 4,596 crore) closely models and implementing it during the pandemic crisis. 9
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PRESENTS CO-POWERED BY CO-GOLD PARTNER T he Indian advertising industry currently stands at Rs. 56,490 crore. Due to the coronavirus for AdEx growth for the year. Some brands decided to pause the advertising spends and utilise pandemic it has witnessed a it more judiciously in the coming de-growth by 17.5% over 2019 quarters, while others adjusted their leading to a reduction in advertising advertising spending across the spends compared to the previous lockdown period. Even during the year. Most of the sectors like lockdown, many businesses tried to manufacturing, trade, tourism, reach their audience using digital transportation, real estate and marketing tools. automobile were impacted during the initial phase of the lockdown in India. The most drastic change has been the With the unlocking of the economy widespread digital transformation in phases, the economic activities and adoption of digital technology began and businesses were able to Growth of the Indian Ad Industry (Rs crore) 12.4% 70,343 10.8% 68,475 10.8% 8.9% 9.4% 62,564 62,577 56,471 56,490 51,851 -17.5% 2016 2017 2018 2019 2020 2021f 2022f Ad Industry Growth function to a limited capacity. In the across various sectors. The pandemic third and fourth quarters of 2020, shifted the consumers to online businesses started to show uptake and digital solutions with increased and were returning to normalcy. emphasis on contact-less delivery of goods and services. It has been a Media and advertising sector transitioning phase and consumers witnessed that many brands/clients across the spectrum are becoming wanted to delay and reschedule accustomed to online shopping. This campaigns, which led to a revision resulted in a boost in online shopping during the lockdown period. 11
PRESENTS CO-POWERED BY CO-GOLD PARTNER The audience’s content consumption media sector. In 2021, the advertising patterns and choice of the medium industry will recover strongly to changed during the pandemic. reach a market size of Rs. 62,577 For entertainment, consumers crore with a growth of 10.8% over moved to OTT platforms like Netflix, 2020. We expect it to grow with a Amazon Prime, Sony Liv, etc. Indian CAGR of 11.59% to reach Rs. 70,343 classic content like Ramayan, crore by the end of 2022. Mahabharta, etc. garnered huge traction and television viewership Indian Ad Industry (Rs. crore) sky-rocketed. It was able to hold the . 59% 70,343 attention of audiences belonging to 11 R CAG any age group. 56,490 The advertising revenues picked up steadily month-on-month. The IPL and the festive season during the second and third quarters of the year certainly gave a boost to the 2020 2022f 1.1 Ad Spends on Media Television contributes the largest is unprecedented and accounts for a share (41%, Rs. 23,201 crore) to majority share of advertising spends the Indian advertising market. in India. It has been a leader in terms This is followed by digital (28%, of media spends thanks to strong Rs. 15,782 crore) and print (25%, audience loyalty. Rs. 13,970 crore). Television’s reach Ad spends on different media (Rs. crore) 1,617 3% 288 1,632 0.5% 3% Telvision 13,970 Digital 25% 23,201 Print 41% OOH Radio 15,782 Cinema 28% 12 12
PRESENTS CO-POWERED BY CO-GOLD PARTNER Due to the pandemic, there has Out-of-home (OOH), radio and cinema been a huge positive shift in the have also witnessed the media ad time audiences spend on digital. The spends share decline compared to advertising spends on digital have 2019. The festive season combined increased from 20% in 2019 to a with IPL and business activities whopping 28% in 2020. This shift has in the economy post lockdown impacted print, resulting in slower allowed brands to liquidate their growth with its media share declining OOH inventory and reasonable from 29% in 2019 to 25% in 2020. proportions of spends came into There is a drop in the readership of this medium. print due to the availability of content on digital platforms. Ad Spends across various media: forecast 12% 15% 17% 20% 6% 28% 30% 6% 34% 2% 6% 4% 2% 6% 4% 2% 2% 3% 4% 1% 3% 4% 3% 1% 3% 3% 1% 3% 35% 34% 31% 29% 25% 23% 21% 40% 40% 40% 39% 41% 40% 39% 2016 2017 2018 2019 2020 2021f 2022f TV Print Radio Cinema OOH Digital 13 13
PRESENTS CO-POWERED BY CO-GOLD PARTNER Digital makes a substantial print during the lockdown. They contribution to the advertising market preferred to consume news on news in India. The reasons for this have websites, mobile news applications, been attributed to the adoption of social media, etc. internet, local language options and usage of internet-enabled phones. The lockdown has had a severe Digital is expected to grow at a rate impact on the businesses and it of 20% to reach the media spends certainly affected the reach of print, share of 30% in 2021. English and OOH and cinema. Measures were other local language news readers / taken to contain the pandemic and audiences are shifting to digital news people were confined to their homes. publications. The lines between print, There were no footfalls in the cinema digital, pay TV, OTT and traditional halls in the initial lockdown phase. media are blurring with the rapid Print readers preferred to consume digitization of media. At an overall news online rather than print due to level, digital advertising in India is the fear of COVID-19, which resulted expected to grow at a consistent rate in a change in consumption habits. in the coming years. It is furthermore This resulted in the contraction of the expected to have a CAGR of 22.47% media spends share for print, OOH to reach a spend share of 34% by and cinema compared to 2019. Print, the end of 2022. OOH, radio and cinema are expected to maintain the same market spends The reach of print declined due share as that in the year 2020. to the lockdown and shift in news The online audio-streaming services consumption by readers. Middle- have begun to give a stiff competition aged readers preferred digital over to radio. 1.2 Media spends across industry verticals FMCG segment spends the segment with a contribution of 10% highest share on advertisements, (Rs. 5,751 crore) to the advertising contributing 21% (Rs. 11,554 crore) pie. Telecom segment contributes to the industry. This is closely 9% (Rs. 5,121 crore) to the ad followed by e-commerce with a expenditures followed by automotive contribution of 17% (Rs. 9,788 (7%, Rs. 4,092 crore) and BFSI crore) and the consumer durables segments (5%, Rs. 2,836 crore). 14
PRESENTS CO-POWERED BY CO-GOLD PARTNER Ad spends by Industry Verticals (Rs. crore) 13,143 11,554 23% 21% 1,662 | 3% 9,788 2,542 | 5% 17% 2,836 | 5% 4,092 5,121 5,751 7% 9% 10% FMCG E-Commerce Consumer Durables Telecom Auto BFSI Media & Entertainment Retail Others India is rapidly moving towards FMCG spends the largest share of its becoming a digitally empowered media budget on television (64%) country. Digital is being seen as the as the medium has the widest reach. catalyst towards booming digital This is followed by spends on digital payments, an exponential rise in (19%) and print (11%). e-commerce spends, and overall economic growth in India. The The automobile sector spends the expenditure share in the advertising majority of its media budgets on spends pie for e-commerce has print (39%) followed by television increased from 10% in 2019 to and digital. Share of digital spends by 17% in 2020. During the lockdown the automobile sector has increased and unlock phases when people were from 16% in 2019 to 25% in 2020. restricted to remain indoors, the e-commerce industry fostered online E-commerce sector spends the demand and change in consumption highest share of its media budget on patterns in turn benefiting the television (45%) followed by digital economy and the consumers. (39%). Retail segment spends the maximum budget on print followed by digital. 15
PRESENTS CO-POWERED BY CO-GOLD PARTNER Ad Spends on various media by vertical 10% 19% 25% 23% 0.1% 2% 32% 6% 4% 39% 40% 2% 1% 45% 3% 5% 11% 3% 1% 1% 57% 8% 5% 1% 1% 1% 3% 0.3% 6% 48% 1% 14% 6% 4% 39% 1% 1% 4% 15% 47% 3% 1% 37% 64% 50% 19% 45% 35% 34% 29% 15% 16% 19% FMCG Auto E-Commerce Retail Telecom BFSI Media & Consumer Others Entertainment Durables TV Print Radio Cinema OOH Digital The telecom segment spends the followed by print (19%). From 2019, largest share of its media budget on BFSI segment’s spend share on television (50%), followed by digital digital has increased from 42% to (40%). The telecom segment’s 57% in 2020. advertising expenditure share on digital increased from 35% in 2019 Media & entertainment segment to 40% in 2020. This is mainly spends most of its budget on print because Vodafone-Idea (Vi) launched (37%) followed by digital (32%). The its new branding campaign and other segment has increased its share of telecom companies were heavily spends on digital from 23% in 2019 active with new launches during the to 32% in 2020. second quarter. Consumer durables spend the BFSI segment spends the largest majority of their shares on digital share of its budget on digital (57%) (45%) followed by television (35%). 16
PRESENTS CO-POWERED BY CO-GOLD PARTNER Innovations shaping the new normal Tanay Kumar CEO, Co-Founder & Chief Creative Officer, Fractal Ink Design Studio linked by Isobar 17 17
PRESENTS CO-POWERED BY CO-GOLD PARTNER I t’s heartening to see the industry adopting new terms to remain upbeat on the future. Entrepreneurs powered by the adoption of digital and smooth information flow. No longer we wanted to stand in long and businesses are now moving on queues or battle weather and get into and rather than seeing this as an crowded buses and trains to reach abnormal, we are now terming it as the workplace. This enlightenment “the new normal”. While the focus was positive in every way. of governments and regulatory bodies around the world still remains Some sectors took advantage of this around containing the pandemic, situation and gave an extra boost the businesses have already both financially and physically to started showing movement towards make innovation for the new world acceptance of the new normal and a priority. Let’s look specifically are ready to adapt and innovate. into some sectors where we feel movement will be faster than others: We are far from being free of this pandemic and the truth is that the Education and technology: impact of these last six months has These are one of the biggest sectors changed our course steeply. Along which will wipe off a large portion with the huge loss of human lives, of the old norm. Online education many businesses have been wiped and its viability got proven almost out, which definitely is a big set back immediately and with time all aspects to the overall financial health of the of schooling got covered. Technology countries. Many great start-ups are lived up to quickly innovating on all either struggling to find a ground online classroom teaching, discipline, or looking for quick exit strategies. monitoring and evaluation and gave rise to some areas which were On the good side of this, we also sluggish due to dominance of physical saw the market getting filtered. The presence of schools. toughest ones survived and some even thrived. The legitimacy of Management costs, infrastructure companies was tested and proven, costs, expansion plans all will see and the progress was fast forwarded getting diverted towards ways of due to acceptance of the new norm improving online infrastructure to in a few sectors. What traditionally ease out home education. We will would have taken years to drive also see governments moving fast through behaviour change strategies to make policies that will enforce came into being almost immediately. this change. Evidence of this we saw in huge investments being bid by a Behaviours around jobs, shopping, leader in online education into just a entertainment, health and education year old start-up. moved swiftly towards recognising the new rules and norms primarily 18
PRESENTS CO-POWERED BY CO-GOLD PARTNER Health and medicine: The Traditional banks will face a challenge exposure to the weakness of the in adopting the new need due to the current infrastructure during this strict government policies but overall outbreak showed a lot of policymakers it will push governments to ease out to look into this sector closely. With policies. biowarfare being a viable medium, it will become more and more important Personal insurance both in the life to invest heavily in monitoring and health sector is going to see a and developing systems to curtail rise. The current sentiment will play outbreaks. China already has started a big role in getting a large population placing and showcasing monitoring of India which was otherwise not technologies to build stronger walls insured into the circle of insurance. in case of further outbreaks. E-commerce: This one probably While both investments in physical was already seeing movement much infrastructure as well as infusion before the pandemic hit. While curve of tech in healthcare will rise in the was already steep, the acceleration coming years, there is consciousness with COVID took businesses through among individuals to strengthen the roof. The most heartening thing immunity from within. This has given was to see the readiness of businesses a boost to an otherwise dormant or to jump straight in. sluggish category - alternate medicine and personal well-being. Areas such This, in some approach, gave way to as Ayurveda, Naturopathy, Yoga are stuck management of large legacy gaining prominence and people are organisations who were reluctant realising the importance of wellness in to make the jump. The logistics and a bigger way. Spends from consumers delivery services quickly ramped up are already on the rise on wellness to cater to the larger need. The fear products and programs. of going out made even local Kirana stores take lead. With big malls shut, Banking, finance and it gave an opportunity to the local insurance industry: Economies markets to quickly move into online have seen a new low and pressures ordering channels. on businesses have grown many folds. Most businesses in the SME Also, e-commerce passed the litmus and MSME category are today in test when festival season got fulfilled requirement of cash to grow or even online. People got bolder in their survive. NBFCs will see a rise in the spends and also went onto the need for unsecured loans and lending purchase of high-value items such as overall will be in the rise. jewellery, expensive fashion online. All this helped companies to innovate on their door-to-door services and come up with models that put people safety at the forefront. 19
PRESENTS CO-POWERED BY CO-GOLD PARTNER Entertainment industry: remotely, to medical consultancy are There are two parts to this industry, now relying on these platforms to one is the production and the other conduct their activities with minimum is consumption. While production disruption. While the adoption was saw a downfall and we saw a slump great, it also surfaced a lot of issues in new releases, consumption saw in a short period of time. an astronomical increase in the viewership of OTT platforms. With This gave rise to heavy investments strengthened internet speeds, people by companies such as Google, were more openly ready to spend on Microsoft, Facebook etc. to jump into paid OTT channels. innovating on it. Facebook live and Instagram live services saw close to Going out specifically for a 300% rise in a short span of time. entertainment, parties are still Instagram is working on upping the some time away. People will be Instagram live time from 60min to abstaining from getting into closed 4 hours. crowded spaces. Online gaming and collaborative gaming platforms In the coming days, we will see new are coming up steeply. Games like platforms innovating on various “Among us” in a short time gained aspects of remote working and huge popularity. We will keep seeing bringing specialisation to the table. growth in these sectors and large Events, office work, education, investments are going to go into the entertainment all will see some development and design of these. innovation in the coming days. Remote working tools: Overall, the new norm will push all Wanted to bring this up last, as these of us to the edge and innovation is tools have become the backbone of inevitable. The sooner we realise this our current survival mechanics. All the better we would be in this race to sectors from education to working adapt to the new norm. “ In the coming days, we will see new platforms innovating on various aspects of remote working and bringing specialisation to the table. Events, office work, education, entertainment “ all will see some innovation in the coming days. 20
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PRESENTS CO-POWERED BY CO-GOLD PARTNER T he digital advertising industry has seen a growth at Rs. 15,782 crore by the end of 2020, which was The growth of digital media can be attributed to factors like internet penetration, availability of affordable at Rs. 13,683 crore by the end of phones with internet connectivity, 2019. Owing to the widespread digital and change in consumer behaviour. transformation during the pandemic, The internet user base has and changing consumer habits and been increasing rapidly and has behaviour, digital is the only media contributed to the growth of digital. that has witnessed a positive growth During the lockdown, the dependence rate of 15.3%, whereas traditional on digital increased and people media has seen a decline with started spending more time online. a negative growth rate of 25.7% On digital payments, transactions over 2019. from mobile wallets like Paytm and PhonePe exceeded those of credit Digital media is expected to have the and debit cards. Individuals in highest growth rate of 20% to reach non-metros started accessing these a market size of Rs. 18,938 crore and utility apps more. traditional media will have a growth rate of 7.2% by the end of 2021. Indian Digital Ad Industry (Rs. crore) 32.4% 23,673 31.7% 26% 18,938 25% 15,782 13,683 20% 10,859 15.3% 8,202 6,228 2016 2017 2018 2019 2020 2021f 2022f Digital Media Growth 22
PRESENTS CO-POWERED BY CO-GOLD PARTNER The audience has started spending The digital advertising industry is more time on streaming video expected to grow at 22.47% CAGR platforms like YouTube, Hotstar and to reach Rs. 23,673 crore by the Amazon Prime, and are consuming end of 2022. The pandemic has local language content. 73% of the setback the reach and revenues for audience belonging to the age group the traditional media. On the flip of 45 years to 54 years use YouTube side, digital content consumption to watch online content. The younger and time spent on smartphones (under 18 years) audience use video have increased considerably. Video streaming apps like Hotstar, Amazon streaming has penetrated into the Prime and YouTube to consume small metros and towns in India. content in the local language. Digital has consistently been the fastest-growing advertising media in India for the last few years and this trend is expected to continue in Digital Media (Rs. crore) the future. Even amid the pandemic, digital media has seen growth of 47% 23,673 2. R its market size where all other 2 AG C traditional media avenues have seen 15,782 a decline. New technology and tools have been aiding the advancement of the digital advertising industry and mobile advertising has become more prominent in the current times. It 2020 2022f offers brands and marketers the new opportunity to target the audiences precisely with personalised content. 2.1 Spends on digital ad formats The highest proportion of spends video (28%, Rs. 4,366 crore), and on digital is contributed by social paid search (24%, Rs. 3,725 crore). media (29%, Rs. 4,596 crore). This Spends on display banners stand at is followed very closely by online 16% (Rs. 2,528 crore). 23
PRESENTS CO-POWERED BY CO-GOLD PARTNER Ad Spends on digital media by formats (Rs. crore) 568 | 3% 2,528 4,596 Social Media 16% 29% Online Video 9,788 Paid Search 17% 3,725 Display Banners 24% 4,366 Other including Classifieds 28% Social media remains the strongest It is expected that the digital digital ad platform and has advertising market will grow at a constantly grown by leaps and rate of 20% to reach Rs. 18,938 crore bounds. Indian consumers spend by 2021. Spends on online video around 2-3 hours on social media have increased from 22% in 2019 a day, hence, resulting in higher to 28% in 2020 and will continue to spends on social media platforms. grow steadily. Online video spends have seen the highest growth rate of 46% The pandemic accelerated the digital in 2020 compared to the previous trends and businesses moved online year. This is followed by the growth during the lockdown period. The of spends on social media at 20% media and advertising industry is over 2019. 24
PRESENTS CO-POWERED BY CO-GOLD PARTNER shifting at a rapid speed and digital needs and build trust. The pandemic is taking the lead. Digital media pushed more and more businesses saw the quickest recovery and to go online and engage with their digital advertising spends returned customers directly and create to pre-lockdown levels by the end avenues to cement brand recall. The of 2020. rapid growth of online video has shown that digital has evolved as a For brands, it has always been strong branding and creative medium imperative to have an active social in addition to being the performance media presence to communicate behemoth historically. with consumers, understand their Ad spends across various digital formats - forecast 27% 26% 25% 25% 24% 24% 24% 5% 4% 4% 4% 4% 7% 6% 29% 28% 29% 29% 29% 28% 28% 18% 19% 21% 22% 28% 28% 28% 20% 21% 21% 20% 16% 16% 16% 2016 2017 2018 2019 2020 2021f 2022f Display Banners Online Video Social Media Other Incl. Classifieds Paid Search 25 25
PRESENTS CO-POWERED BY CO-GOLD PARTNER 2.2 Growth of E-commerce advertising in India The pandemic has disrupted language and localized content and consumer’s purchase behaviour as offers. In addition to that, the advent we have known so far and has helped of DSPs by e-commerce platforms to form a positive perception towards and higher focus on product search e-commerce across the customer during the pandemic period has base. Marketers and e-tailers have driven the evolution of e-commerce identified and adopted the trends to advertising in India. By the end reach out to a larger audience with of 2020, the advertising spends e-commerce advertising, blending it on e-commerce platforms were seamlessly with merchandising and Rs. 4,700 crore. Based on the current other formats of digital advertising, trajectory, the advertising spends on resulting in rich customer experience. these platforms is expected to grow E-commerce advertising results at a CAGR of 40%. in greater sales conversions and personalization helps in avoid dilution of the marketing messages. 2020 has witnessed accelerated Ad Spends on E-Commerce 20 growth of e-commerce usage and people belonging to different age group now shop online more platforms 20 frequently than before. The adoption of the digital-first approach was one of the significant drivers towards this Rs. 4,700 change. There is also a growing trend crore of online shoppers coming from the Tier II and Tier III cities and beyond, thus truly widening the reach of this Expected growth platform. E-commerce giants have been focusing on these consumers 40% CAGR with initiatives like the use of local 26
PRESENTS CO-POWERED BY CO-GOLD PARTNER Digital marketing in the post COVID-19 era Gurjot Singh Shah Senior VP & National Media Head, Dentsu WebChutney 27
PRESENTS CO-POWERED BY CO-GOLD PARTNER T here are essential lessons to learn from brands, which have emerged from the pandemic even There are examples of such change and shifts historically during big events. The power of radio came stronger than before. All the brands alive when the US government that have succeeded have quietly successfully persuaded citizens to invested more in transforming join the army through radio during their businesses to meet new needs World War I. Print media really came and they have shown the rest of to the forefront when the Spanish the brands and marketing world Flu pandemic was contained with how to make digital core to their successful public health posters businesses. In fact, we think of our or ads in newspapers. It is time for work in very simple terms: imagine digital to see a big uptick. life without Dentsu Webchutney’s clients such as Google, YouTube, The web is becoming the new Twitter, Flipkart, Whirlpool during grocery mart - Big Basket and the pandemic. Life would be Grofers saw up to 3X the traffic, immeasurably different without cab companies have tied up with digital technologies our brand grocery brands for deliveries. partners are building. Dining-in is the new dine out. With over 55% increase in-game Inevitably, if digital was the future, downloads, gaming has become the time for it has certainly arrived. the virtual playground for all ages. Now, as we look forward, there will Over the top content consumption be some short term pains in the has become mainstream, audiences advertising model we have known have turned to digital like never and loved for a while, i.e., mainline before and it is only natural for advertising. There might be a brands to follow shortfall in advertising growth in India – but the long-term prospects On the other side, there is major for digital advertising have never evolution in how brands are going been better. This shift isn’t just market themselves in this new era, new for brands. It’s borne out of a majority of brands have found customer-centricity. ways to start selling online and existing ones have strengthened We are headed to a new normal. Born digital businesses by going out of compulsion, consumers are direct to customer also reducing acquiring new skills, and have new dependencies on marketplaces. expectations from categories that This shift has called for a mix would have been taken for granted of brand and performance-lead until now. The new normal will digital marketing, which is radically revolve around technology, going different than the pre COVID-19 virtual, becoming contactless and era. Some key focus areas include hence, will be built on click more immediate translation of views than bricks. and impression to clicks and 28
PRESENTS CO-POWERED BY CO-GOLD PARTNER quality visits. Techniques like consumers across touch points. programmatic is assisting in Leading consumer electronics achieving the same and we are brands like Samsung, Sony and actively exploring relevant solutions Haier are assisting their customer for our advertiser client partners with servicing and troubleshooting like Federal Bank. virtually. Car brands like Skoda and BMW are launching their cars Brands are adopting digital not online and have migrated FAQs to only as a preferred medium to voice assistants. advertise but also to address Salil Sadanandan President, South Asia & EMEA Kohler “ We have been early adopters of digital platforms in the home décor space and it has helped us remain in touch with consumers and engage with our customers even during the pandemic. Digital initiatives will remain “ intrinsic to our strategy going forward. 29 29
PRESENTS CO-POWERED BY CO-GOLD PARTNER On the ecommerce front, with a 100 Let’s take a few examples from this percent rise in online orders from year to validate the hypothesis of Tier 2 and 3 cities, Myntra got over brand building and performance 5 lakh shoppers over a 4 days end of marketing becoming seamless. season sale, over 15 lakh products were sold during the 12 hours of IPL has been the biggest bet so far EORS. It also registered the highest in 2020, and advertisers have been ever number of app downloads and bold enough to take these bets and new customer acquisitions on day we believe this opportunity will help one of EORS. in driving meaningful customer adoption. With 229 million viewers Nestle reported ecommerce is 4% tuned in on day one of IPL 2020, of revenue, double YoY. 28% growth was witnessed in comparison to last year and it is E-commerce companies including only increasing. Flipkart and Amazon sold $4.1 billion (Rs. 29,000 crore) worth of goods What is even better this year is the during the October 15-21 period this tenacity of viewers. More time spent year, up from $2.7 billion in 2019. at home leading to more active time spent on watching and celebrating All of this will result in an exponential IPL has offered more immersive increase in investments on digital partnership opportunities for both, in products for enablement advertisers. ESPN CricInfo has and platforms for marketing. The come up with many customisable Indian digital advertising industry opportunities, which have been is expected to grow at CAGR of adopted by our client partner 32% to reach Rs. 18,986 crore Whirlpool and we are seeing healthy ($2.93 Bn) by 2020. results. Indians have really gone through a flood of emotions over With greater dependency will come the last 6 months, and the IPL has even greater responsibility on presented temporary relief in many digital mediums Digital will take ways, to brands and audiences. the responsibility of sales alongside marketing increasingly, as a result With conviction, we see in these of that the media mix is going opportunities and brands willing to to change with performance / ROI sustain momentum. Investments driving mediums taking a major are going to be heavy in the share. approaching festive season too, making the period longer and brighter for advertising this year. 30
PRESENTS CO-POWERED BY CO-GOLD PARTNER Strong brands get even stronger share stories of what they do. All in during periods of downturns and all, COVID-19 has given newfound depressed advertiser sentiment resilience to brand managers and and this period is no different. We the C-Suite in adopting holistic are excited in how this newfound thinking when it comes to managing momentum sustains throughout their presence on digital platforms. the IPL & festive seasons, and even They are no longer just allocating beyond for the new year. small parts of their spends online – they are building with digital as the The biggest shift that we are epicentre of the brand experience. witnessing is an overhaul in how This has implications on their brands overturn their marketing balance sheet, the competition, teams. Today, marketing is not their marketing spends, and more just about the 4Ps. It’s about excitingly in the long run, how they truly adapting to your customers’ develop products to be even more needs, as quickly as possible, and customer-centric going forward. meeting them where they are present. Brands are not outliers to culture and society but a part of it. It matters how they adapt and how they give back, and then ultimately “ Today, marketing is not just about the 4Ps. It’s about truly adapting to your customers’ needs, as quickly as possible, and meeting them where they are present. Brands are not outliers to culture and society but a part of it. “ 31
PRESENTS CO-POWERED BY CO-GOLD PARTNER Building efficiency in Digital Marketing using Data and Technology Rubeena Singh CEO, iProspect India 32
PRESENTS CO-POWERED BY CO-GOLD PARTNER T he pandemic has changed our lives in many ways - our approach to health, interactions experience to their users and also market themselves better. with our friends, the way we work, Here are 5 areas where technology the way we run our homes, and can help scaling and building most definitely, the way we shop! efficiencies in digital marketing. We see many first-time consumers 1. Use machine learning have adopted digital commerce (ML) to create customer channels. More and more people experiences that earn are shopping for everyday needs loyalty and trust. and luxury items online. From groceries to sanitisers and from Customer experience can be difficult clothes to washing machines, the to perceive, manage, measure, and need to physically visit a store to support as it is dynamic, contextual, shop continues to fade. and offers a mammoth amount of data to mine. ML can leverage Even post the lockdown, consumers customer data and interactions hunkered down at home to avoid to fuel CX strategy; automate the contracting coronavirus are turning repetitive and mundane tasks of to online shopping for products that data cleansing, structuring, and they traditionally bought in stores. maintenance; and help companies Going forward, one can expect these understand customer opinion for new digital interactions to remain crafting targeted and engaging sticky and gain at the expense of experiences. offline commerce at physical stores. 2.Using technology to And, as the behaviour of the create content consumer changes, with it, change the marketing trends. • Today, with the availability to Brands will need to build digital faster connectivity, many doors experiences for the consumer are opening for VR or AR where & getting customer love in the advertisers can build surreal digital world. Data, technology experiences for customers and artificial intelligence can digitally, to showcase their products and services. This will enable companies gather more enable a lower bounce rate and insight into their audience by increased CTR & ROI. offering recommendation engines, predictive search, chatbots, etc. • Machines can make automated Use of these technologies and tools content creation possible! Banner will help companies offer a better ads, email campaigns, or social 33
PRESENTS CO-POWERED BY CO-GOLD PARTNER media posts can be generated and 3.As consumers continue applied into different formats shopping from their for native to every channel. sofas without going out This is a big stride in the area to the physical stores, of personalisation of content at conversational commerce scale. Content can be created is the need of the hour. for hundreds of segments of customers based on their Personalization and warmth in demographics and interests. Based on performance, messages can the shopping experience in a automatically be changed to match conversational style needs to the content that is performing be built in the digital consumer well. journeys. Buyers tend to prefer the more direct and human (or human- • Video currently accounts for like) contact, and companies that approximately 75% of all internet adopt conversational commerce traffic. With the help of ML, video soon notice the improvement. marketing strategy can scale This technology provides up to 4 greater heights. AI can help you times more sales conversion than provide tailor-made content traditional buying channels. The rapid to potential customers. Video development of Natural Language developers can use AI data as a tool Processing (NLP) technology and to understand customer interest and base their future videos on artificial intelligence (AI) systems the same information. Insights have made it easier for conversational from AI prevent the marketer from trade to rely on more sophisticated producing redundant videos. There and advanced services. can help marketers in rationalising production, interconnecting Also, Voice Search is growing videos based on the watch history, rapidly. Marketers will need to focus improving personalisation and on creating content for voice and creating socially relevant content. optimizing keywords for voice- based queries, which are more • Analytics can make it possible for conversational than a typed-up companies to get feedback on their query. Voice has the potential to video and product and that too in upend paid search and organic real-time. When the video content content strategy practices. on social media is live, AI can tap data, which can be used for future content inputs. If the past videos were successful, it would give information about viewers who liked points. AI will help marketers develop powerfully social content that also is personalised. 34
PRESENTS CO-POWERED BY CO-GOLD PARTNER 4. A common problem 5. By using data, marketers statement for marketers can track customers along is how to target users who the journey from initial have abandoned the journey interest to final purchase. with offers? Building a multi-touch attribution Data, Analytics and Machine model will allow marketers to have Learning can help re-engaging with a much clearer picture of what’s such users effectively. A Machine working and what isn’t and make Learning Model, which will self-learn data-driven decisions, allowing on the closure data with previous them to prioritize expenditure in offers using Analytics and create the right channels. classification based on personas, can be built. The data then, can be churned daily, to optimize for the recommended offers. Digital marketing and technology go hand in hand. You need technology to be able to provide innovative digital marketing solutions. At iProspect Solution Labs, we provide bespoke marketing solutions driven by tech and data to our clients. Our array of advanced tools can help in creating personalised experiences at scale for customers; at the same time enable measuring, managing and analyzing business performance to maximize its effectiveness and optimize return on investment (ROI). This allows marketers to be more efficient at their jobs and minimize wasted digital marketing dollars. “ Brands will need to build digital experiences for the consumer and get customer love in “ the digital world. 35
PRESENTS CO-POWERED BY CO-GOLD PARTNER 2.3 Digital media spends across industry verticals E-commerce makes the highest increased from 19% to 24% to contribution of 24% (Rs. 3,782 crore) be the highest contributor to the to the digital media industry. This digital media spends pie. The key is followed by consumer durables drivers in these sectors are young (17%, Rs. 2,609 crore), FMCG demographic profile, improving (14%, Rs. 2,163 crore) and Telecom internet penetration, government (13%, Rs. 2,046 crore). Compared initiatives and improving economic to the previous year, the share performance. of e-commerce segment has Ad spends on digital media by verticals (Rs. crore) 388 | 2% 1,362 809 | 5% 9% 3,782 1,004 | 6% 24% 1,618 10% 2,609 17% 2,046 13% 2,163 14% E-Commerce Consumer Durables FMCG Telecom BFSI Auto Media & Entertainment Retail Others 36 36
PRESENTS CO-POWERED BY CO-GOLD PARTNER Ad Spends on Digital Media by Formats and Verticals 23% 26% 24% 27% 32% 34% 31% 34% 45% 9% 1% 1% 13% 3% 13% 3% 31% 21% 15% 42% 2% 18% 24% 19% 49% 34% 20% 41% 32% 26% 16% 17% 21% 25% 15% 18% 17% 15% 19% 18% 14% 10% FMCG Auto E-Commerce Retail Telecom BFSI Media & Consumer Others Entertainment Durables Display Banners Online Video Paid Search Other incl. Classified Social Media FMCG spends the highest share of Telecommunications sector spends its digital media budget on online 34% of its digital media budget video (49%) followed by social on social media and online video media (32%) and display banners respectively. BFSI sector spends (14%). Automotive segment spends a maximum of their digital media the largest share of its digital media budgets on paid search (31%), then budget on online video (32%) on display banners (25%) and social followed by social media (23%), media (24%). paid search (21%) and display banners (15%). Media and entertainment segment spends the largest share of digital E-commerce segments spend the media budget on online video (41%) most with 42% of their digital media followed by social media (31%) and budget allocated for paid search. It is display banners (15%). Consumer followed by social media with 26% and durables segment spends 27% of its online video at 21%. The e-commerce digital media budgets on social media segment spent their digital media followed by 24% on paid search and budgets on online videos more this 19% on online video. year compared to the previous year. Retail segment majorly spends its Digital video has seen unprecedented digital media budget on social media growth in spends across almost all (45%) followed by paid search (19%) industry verticals this year over the and display banners (18%). previous year. This shows that digital media is evolving as a robust creative, branding and awareness medium in addition to being a performance medium. 37
PRESENTS CO-POWERED BY CO-GOLD PARTNER Evolution of Digital Marketing in the Never Normal World Gopa Kumar COO, Isobar 38
PRESENTS CO-POWERED BY CO-GOLD PARTNER A s we entered 2020, who would have known the year would turn out like it has, amidst the pandemic new users across sectors like entertainment, where consumption of content and screen time has and lockdowns. In February 2020, gone through the roof during these when all of news around the pandemic times. The pandemic has potentially was developing, everybody hoped changed the digital landscape, an it to be a tiny wave that would pass era that is driven by a rapid increase in no time but how wrong we were. in digital reach coupled with a rapid The COVID-19 pandemic hit us hard increase in the width of usage and severely impacted our lives amongst current internet users. and livelihood. It has changed the According to many reports, the usage world and the way people interacted will propel the growth of the internet with each other before. The New to higher levels. Normal, Now Normal or Never Normal, whatever terminology Kantar’s I-Cube Study estimates that you may want to give, the world India will have more than 900 million has changed and will never be the internet users by 2025. That’s an same again. addition of about 350 million users over the next five years. The growth It has now become the biggest will be driven by segments that have global challenge of our lifetime, till recently been underrepresented leading a change in our attitude – the rural population, school-going and behaviour, and forcing brands, children and women. marketers to respond accordingly. However, the need to respond won’t The pandemic will also change the end when the virus’ immediate threat way we think, how these changes eventually recedes. The pandemic will affect the way we design, build has forever changed the experience experiences that people will seek, and of being a consumer. We expect to in turn how we will communicate with see behavioural change at scale for them. All of this will be answered in some time to come. the way people react to all source of creative innovations and new hacks. For all the hardships that COVID-19 Every marketer and brand needs to brought in, it has also turned out to be actively heard and be ready to be a Black Swan event for the digital respond in real-time if the situation industry, which has accelerated the demands so. There will be massive adoption and usage of the Internet behaviour change at a scale and further. Work from home and all speed that we’ve never seen before, other restrictions have created sparked by fear and encouraged by new services and models across government policies. sectors like healthcare, education and e-commerce. This also added 39
PRESENTS CO-POWERED BY CO-GOLD PARTNER Here are some of the key behavioural Another trend one will see is the changes of people which could be emergence of health economy. As observed include- health will become an essential factor, everybody will be willing to invest Trust will become a necessity This in health-related activities. Every means, for brands to be effective, they business will require to understand would need to be trustworthy. In some how it can be part of a new health cases, to rebuild trust quickly, the ecosystem that will dominate focus should be on building confidence consumer thinking. through every channel. Optimism will sell more than fear. The familiar Some of the other behavioural will be more valuable. Established actions happening around the world brands that handle the crisis well and in India are people postponing will rise in value and acceptance. purchase decisions in many The risk will be less tolerable to most categories due to uncertainty. This people. Individualism may rise with will be expected to continue even more people adopting a look-after- after COVID threat reduces. People yourself-first policy. will continue to wait and watch, which will result in broken marketing Virtual world becomes a reality calendars for brands as demands will The enforced shift during the worst continue to fluctuate. of the pandemic to virtual working, consuming and socializing will fuel a This will also mean that digital massive and further shift to virtual will become a necessity. It will be activity for anything. But it is growing a solution for all requirements fast. Microsoft teams experienced a of consumers, whether its 500+ percent increase in calls and entertainment, commerce or utilities. conferences worldwide. Anything that can be done virtually will be While it’s tough to wear a future- preferred. Brands & organisations gazing hat in this ever-changing that will win are those who test and dynamic and fluid world around us, explore all the associated creative there are definitely certain trends possibilities. While everything which are shaping in the post-COVID is moving virtual, a craving for world and where digital will be the “real” will also build and things will key driver. explode when everything opens up or comes back to normal. But virtual Day to day essentials, groceries and experiences and content will continue medicines will massively be driven to grow and expand like virtual gym, by digital and will see huge growth. virtual commerce, virtual arts, etc. 40
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