Spends on digital media to reach 24% by 2020: Report

With digital advertising gaining momentum, the share of digital media spends is likely to be 24 percent of the total advertising pie by 2020 from 12 percent at present, says a report.

The digital advertising industry currently stands at Rs 6,825 crore and is expected to grow at a CAGR of 37 percent to reach Rs 23,795 crore by 2020, according to the digital advertising report by Dentsu Aegis Network India.

"Increase in consumer adoption of mobile phones as an important medium of communication along with increased Internet usage will act as the key catalysts in taking this growth forward, spurred by falling data prices," it said.

It noted that social media and search take the lion's share of digital ad spends in India. While 28 percent of the total digital ad spends (Rs 1,911 crore) is made on social media, spends on search follows next with a 27 percent share (Rs 1,843 crore). Spends on display stand at 20 percent (Rs 1,345 crore) while that on video is at 18 percent (Rs 1,249 crore).

E-commerce is the biggest spender on digital media, accounting for 19 percent or Rs 1,309 crore of the total digital spends.

This is followed by FMCG, which accounts for 14 percent, telecom 12 percent and banking and financial services insurance accounting for 11 percent.

The other significant contributors are consumer durables with 9 percent, automotive sector with 8 percent , media and entertainment with 8 percent and retail with 6 percent.

It observed that a large majority of Internet users in India view content and interact in their respective local language, hence, the growth in digital will also be propelled by the opportunity that marketers will see in attracting a diverse set of audiences by including local language content within their portfolio.

Richer audience engagement, inclusion of the rural consumer, automation and data analytics are going to be the focus areas for advertisers and agencies in the next three years, it noted.

"The next big wave of Internet users is going to come from rural India, presenting an elaborate opportunity to advertisers to tap that market. Foray into richer audience engagement has already begun with the advent of native advertising and is going to evolve more with the higher adoption of programmatic and data analytics," it said.