Mobile-led digital advertising growth in India likely to remain high
The share of mobile in India’s digital media spends jumped to 76% in FY21 from 45% in FY19, growing at a compounded annual growth rate of 45% to $1.9 billion.
In emerging markets like India, the overall share of digital advertising is relatively lower – at about 30% – against the global average of 50%. Therefore, this space is pegged to grow at about 25% going forward as against 9% globally.
Companies like mobile marketing firm , among the few listed firms in this space in the country, are likely to grow rapidly as a result of this.
Over 95% of the company’s revenue currently comes from mobile advertising, said Aniket Pande and Aditi Patil in the report.
Digital ad spends in India will remain high in certain verticals like ecommerce, food-tech,
and travel tech, since the primary mode through which companies engage with their end consumers is via mobile apps. All of these are areas where Affle currently has a significant presence, it said.
In India, spending on digital media was led by social media with the largest share of 29% (Rs 4,600 crore) closely followed by online video (28%, Rs 4,400 crore). Online video has seen the fastest growth, from a share of 22% in 2019 to 28% in 2020.
On average, Indians consumed 14.6 GB data per smartphone per month, and this is expected to triple in the next five years, according to Ericsson mobility report 2021.
Further, over 70% of internet users will access the internet only though their smartphones by 2025. India has emerged the fastest growing country with a 29% year-on-year rise in app downloads in 2020.
Indian e-commerce digital advertising spends totalled $656 million in FY21.
With e-commerce shoppers estimated to grow at 13.8% CAGR over FY21-FY25, digital ad spends by e-commerce businesses are expected to grow at 33.7% CAGR over the same period, said the report.
India is, however, a highly fragmented market, making it challenging to develop deep insights on the online shopping behaviour of a culturally diverse population.
Conversion rates are also lower by 40-70% compared to other developed markets.
“We believe that 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.