Mobile-driven digital advertising growth in India expected to remain high

According to a report by Prabhudas Lilladher, digital advertising businesses are expected to grow rapidly in the future due to the emergence of mobile advertising as the default consumer channel.

The share of mobile in India’s digital media spend increased from 45% in FY2019 to 76% in FY21, growing at a compound annual growth rate of 45% to 1 , $ 9 billion.

In emerging markets like India, the overall share of digital advertising is relatively lower – around 30% – compared to the global average of 50%. Therefore, this space is expected to grow by around 25% in the future compared to 9% globally.

Companies like the mobile marketing company, among the few companies listed in this space in the country, are expected to grow rapidly as a result.

More than 95% of the company’s revenue currently comes from mobile advertising, Aniket Pande and Aditi Patil said in the report.

Digital ad spending in India will remain high in some sectors like e-commerce, food technology,

and travel technology, since the primary mode by which businesses interact with their end consumers is through mobile applications. These are all areas where Affle currently has a significant presence, he said.

In India, spending on digital media was dominated by social media with the largest share at 29% (Rs 4,600 crore), followed closely by online video (28%, Rs 4,400 crore). Online video has grown the fastest, growing from a share of 22% in 2019 to 28% in 2020.

As the Covid-19 pandemic has accelerated the digital switchover, Pande said that pace will continue given low data costs and falling smartphone prices.

On average, Indians consumed 14.6 GB of data per smartphone per month, and this is expected to triple over the next five years, according to the Ericsson 2021 Mobility Report.

In addition, over 70% of Internet users will only access the Internet through their smartphones by 2025. India has become the fastest growing country with a 29% year-on-year increase in app downloads. in 2020.

Indian e-commerce digital advertising spending totaled $ 656 million in FY21.

With an estimated growth of online shoppers of 13.8% CAGR in fiscal year 21-FY25, digital ad spending by e-commerce companies is expected to increase by 33.7% CAGR during the same period, according to the report.

India is, however, a highly fragmented market, making it difficult to develop in-depth knowledge about the online shopping behavior of a culturally diverse population.

Conversion rates are also 40-70% lower compared to other developed markets.

“We believe digital advertising is here to stay because connected digital devices / experiences have become an inseparable part of a consumer’s life,” according to the report.

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