25 June 2024 |
By - Sudha Mariappan
The advertising industry is a booming industry.
Since the 1780s, India has had a successful advertisement running over the years and is expected to grow at a strong double digit pace in 2024 to a volume of whopping Rs. 1.2 trillion ($14.6 billion).
The growth we will be noticing will be much stronger and abrupt compared to the previous year's Rs. 1.1 trillion ($13.1 billion), which is 50% higher than the pre-pandemic period.
According to storyboard18, India is estimated to be in the top 10 in markets by the year 2025.
India will continue to grow at a compound annual growth rate ( CAGR) of 10% and is estimated to be 1.7 trillion ($21.1 billion) by the year 2028.
The growth rate will be more than 11.8%.
It is also expected that India is going to become the world’s third largest economy by 2028, overtaking both Germany and Japan with a GDP of USD 5.0.
How India’s economy is handling currently:
The economy of India is bringing nothing but improvement.
The GDP of India has been greatly resilient and broadening over time. With an expected growth rate of about 6.8 percent in 2024 and 6.5 percent growth in 2025, India will remain the star performer in terms of economic strength in the Asia-Pacific region.
With consumer demand increasing and them having the opportunity to spend, advertising came to its peak, and now people can’t help but see advertisements everywhere.
With the ever evolving digital space and faster workforce environment, this is the perfect opportunity for advertising companies to gain profit based on per capita income and strong consumer confidence.
Brands have reshaped themselves according to economic and technological changes, continually connecting with the digitally savvy populace.
Let's delve into the unfolding narrative of India's advertising ascent in 2024, exploring the trends and challenges that define this transformative journey.
Initial Media Landscape:
The fast evolving Indian media landscape is also different.
While traditional formats like TV hold sway, digital advertising grows exponentially.
According to GroupM's report, expenditure on digital advertising in India is likely to cross Rs 40,000 crore ($5.8 billion) by 2024, emanating from rising internet usage and the use of smartphones.
In India, digital is expected to grow by 13%, contributing to 57% of the total ad spend. TV is expected to grow by 7% and contribute 29% of the total ad spend.
This becomes a story of shifting consumer behaviours, with more Indians consuming their content on digital platforms.
Growth of Print and Traditional Media:
Though digital media also makes major raids into the market, traditional media like print and radio have not become totally irrelevant.
For example, while print media circulation has increased from 402 million copies in 2023 to 408 million copies in 2024, the trajectory can be termed stable but slow growing.
Radio and cinema, down from their pre-pandemic levels, also see niche audiences engaged with the medium and the continued interest of a few advertisers.
Rising AI Trends and Innovations:
Innovation in ad formats is another area that is changing how things are done.
AR and VR are rapidly gaining ground as immersive ways to advertise, making it possible for brands to reach consumers in ways no other channel has ever managed.
Influencer marketing and personalized ads are increasingly one of the favorite routes that brands take to engage the modern consumer for conversion in a competitive marketplace.
How Advertising changed after covid:
The COVID-19 pandemic created profound changes in the advertising industry. By 2024 these changes will redefine the whole advertising industry.
Digital Acceleration: Due to the changing consumer behaviour, brands accelerated their advertising shift to digital platforms during the pandemic as people turned to online media for news, entertainment, and shopping throughout lockdowns.
Ad spend on digital rose from Rs 20,000 crore ($2.7 billion) in 2019 to Rs 32,000 crore ($4.7 billion) in 2021 on the back of a continued rise in internet and smartphone usage. It is estimated that it will cross Rs 50,000 crore by 2024.
E-commerce and direct-to-consumer brands were, and still are, in their prime. As stores closed or limited their operations, shoppers turned to e-commerce in crowds.
This giant shift in habits brought a flood of ad spend from Direct to Consumer (D2C) brands who invested heavily in digital advertising to reach their audiences. In turn, advertising spend via e-commerce grows 60% between 2020 and 2022, and further in 2024 to almost 25% of total digital ad spend.
Flexibility in advertising strategies: The ability to move quickly in advertising became the utmost priority due to COVID-19.
Brands started to show precautions regarding the virus, which made the public trust those brands and immediately buy the product. For example, Dettol was in its prime due to the increasing safety measures people had to take, for which this was the best suitable product.
Trends that still persist into 2024, here brands will be more flexible in terms of advertising strategies in response to socio-economic changes and shifts in consumer sentiment.
More Attention to ROI and Performance Metrics: The pandemic brought in lots of economic uncertainties that pushed the advertisers to maximize their ROI.
Therefore, this resulted in an increasing emphasis on performance metrics and data-driven decision-making. Advanced analytics and AI are increasingly used by advertisers while spending on marketing campaigns for measuring campaign effectiveness, optimizing ad spend, better targeting, and other such things.
Challenges and Future of Advertising:
While the advertising industry in India is poised to grow exponentially in the coming years, there are some challenges that loom ahead, forcing psychological changes and awareness building among advertisers and stakeholders alike.
Shifting Consumer Behaviors:
Consumer preferences are changing rapidly in India, driven by increased digital adoption and shifting socio-economic dynamics.
This shift to digital for content consumption has irrevocably transformed the way brands reach their target audiences.
Younger demographics, in particular are biased toward more interactive and personalized content experiences.
This shift demands shifting advertisers away from traditional formats and adopting innovative strategies through which messages can be passed, such as influencer marketing, native advertising, and other interactive formats like AR and VR.
It calls for agility and knowledge of fast-changing consumer behavior through various digital channels.
Digital Transformation:
The digital platforms have been fast-changing, and this may pose challenges as well as opportunities to the advertisers.
While digital advertising holds out the promise of an unprecedented level of targeting capability and measurable ROI, so too does it raise the rivalry to a new level and demand newer ways of creativity all the time for cutting through the digital noise.
Advertisers have to keep fine-tuning their digital strategies in an effort to engage diversified audience segments across social media, search engines, and newer digital platforms.
Furthermore, AI and Machine Learning in advertising technologies will help to transform campaign optimization and consumer insights into more personalized and more effective advertising campaigns for advertisers.
Added to this, while the Indian advertising industry does stand on strong prospects of growth, it has to swim through heaps of regulatory complexities and changing consumer preferences besides riding the wave of digital transformation.
In embracing innovation and data-driven strategies, advertisers can not only work past these challenges but also aim for long-term growth and relevance amidst the fiercely competitive global advertising landscape.
Needless to say, the advertising industry is on the rise, regardless of the struggles it faces.
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