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Digital may overtake TV ad spends by 2024

Ad revenue in India is forecast to rebound strongly by 2025, following a 27% plunge in 2020, with ad spends on digital media overtaking those on television (TV) by 2024, according to a Media Partners Asia (MPA) report.

Overall, ad revenue is expected to grow at a compound annual growth rate (CAGR) of 13% to touch $13.3 billion by 2025, said the Asia Pacific Advertising Trends 2021 report from MPA, an independent provider of research, advisory, and consulting services in the Asia Pacific.

In India, advertisers made a strong comeback in the fourth quarter of 2020 as restrictions imposed across the country to contain the spread of coronavirus were lifted and consumer spends surged, driven in part by pent-up demand. However, the second wave of the pandemic will remain a drag. Despite this, MPA estimates that India’s advertising market will expand by 20.5% in 2021 to $8.7 billion, given the low base last year.

Digital advertising is expected to benefit from India’s expanding digital economy, the report said.

The internet, which was a major beneficiary of the lockdown, will continue to grow steadily and expand its share of advertising from 36.6% in 2021 to 40.1% in 2025. This includes fast growing categories such as online gaming, ed-tech, and food and delivery platforms, which will outpace TV to become the largest advertising segment by 2024, said the report, which covers Asian markets such as India, China, Korea, Indonesia, Vietnam, and Thailand.

The gap between ad spends on TV and digital is narrowing every year. Digital, at 35% market share, has overtaken print (16%) and is closing the gap with television (45%), according to 2021 estimates by media agency GroupM.

The MPA report reflects a similar trend with TV remaining important in key markets, including India, where it retains its position as the largest ad segment as of 2020-end. TV advertising will grow in double digits for the next three years, given the low-base effect and strong industry fundamentals. It will grow at 13.1% CAGR between 2020 to 2025 to reach $5.1 billion.

Nobody can deny that eventually digital will overtake TV, said Sandeep Goyal, chairman, Mogae Media, a Mumbai-based marketing and communications agency. But the gap is still too large for it to happen by 2024, he said.

“Digital is still one third of the overall television ad industry which stands at around 50,000 crore. I feel digital will topple TV but only by 2027-28,” he said.

Ed-tech platform upGrad stated that it leverages a mix of digital and offline advertising to reach out to the relevant audience and capture their mindshare. Digital takes up the majority of its marketing spends, followed by TV, said Arjun Mohan, chief executive, upGrad. The firm leverages Google, Facebook, Instagram, and LinkedIn as preferred mediums for digital advertising, as well as emailers, push notifications, he said.

“We also leverage affiliate marketing on digital channels to drive brand awareness and performance. Content marketing on YouTube and Instagram has been a great medium for upGrad’s brand marketing and storytelling efforts,” he said.

TV broadcasters are growing online video ad market share through catch up and ad-based video-on-demand (AVOD) streaming services. Online video advertising is forecast to grow to $33.3 billion in 2025, representing 20% of the APAC digital ad pie. Live Mint

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