Digital to drive growth in ad spendings this year, GroupM says

The general election is expected to contribute to the 10.2% bump-up in advertisement spendings to $19 billion (₹1.55 trillion) this year, media investment firm GroupM said.

The forecasted growth for 2024, however, is lower than last year’s 11.2% expansion, the projections by global advertising giant WPP’s arm showed.

“Despite facing macroeconomic challenges, we remain optimistic about the industry. At 10.2%, India will be the fastest growing top market. 2024 will also see an upside from the spends leading to the general election. Digital particularly retail media and digital extensions of TV are expected to drive growth, in addition to small and medium businesses,” Prasanth Kumar, chief executive of GroupM South Asia, said.

Advertisement spending on the digital medium will account for more than half of overall media expenditure at ₹88,500 crore, followed by television, and print, respectively, GroupM’s latest ‘This Year, Next Year’ report showed.

“The advertising landscape is evolving with the fragmentation of search, rapid rise of influencer marketing and retail media. Reflecting this, digital will contribute to 57% of all ad revenue,” Ashwin Padmanabhan, president of investments, trading, and partnerships at GroupM–India, said.

Media spends in the digital medium this year is also expected to expand by 13% year-on-year against a 6.8% growth in all other media combined, the report said.

Apart from the general election, the other key sectors that will bolster spendings on advertisements are auto, real estate, retail and small and medium businesses, the report said, adding that India continues to be among the top 10 fastest growing markets at the 8th spot in a ranking that is led by the US, China and the United Kingdom.

Globally, the media buyer sees ad revenues growing by 5.3% to $936 billion, excluding US election spendings. Global ad revenues last year grew 5.8% from the previous year to $889 billion, it said.

Similar to the situation in India, much of the ad spending will be on digital media.

“Globally, digital will lead the charge, commanding 79% share of all ad revenue. Adaptability is key to navigating an evolving advertising landscape amidst inflation and geopolitical tensions,” Parveen Sheik, head of business intelligence at GroupM India, said.