The world is going digital through digital media
Everything has changed since the introduction of the internet and digital media. From movies to advertisements, everything has gone digital. With the advance of the COVID-19 pandemic, Indian economy has taken a bigger step towards online economy and digital media. Talking about digital media, Media Partners Asia(MPA) reported that there will be a rise in digital advertising’s share by the year 2025. It is estimated to rise from 59% in the year 2020 to 67% by the year 2025. It is only 2021 and we are already witnessing the high-paced growth of the digital advertising sector.
What the situation is like, currently?
Digital advertisement currently acts as the major source of Ad revenue. Wait, we’re explaining. Ad revenue is the income that is earned by individuals and businesses by displaying advertisements on their websites or apps. Even after witnessing a 27 percent fall in ad revenues last year, the Ad revenue is expected to bounce back by the year 2025. The major reason behind this bounce back is the shift to digital media from other sources like Television.
It is expected that digital media will take over all other means of showing ads by the year 2024, as per the Media Partners Asia(MPA) report. The growth of the digital economy is directly contributing to the growth of digital advertising sectors across online gaming, edu-tech, food, and delivery platforms and it is said that the digital advertisement sector will become the largest advertisement segment by the year 2024.
The annual report generated by MPA contained a comprehensive analysis of advertising media across 14 markets in the Asia Pacific with a focus on TV and digital sectors. According to the report, it is said that the ad revenue will grow at a compound annual growth rate of 13 percent and will reach nearly $13.3 billion by the year 2025.
Ad revenue last year:
The ad revenue was struggling to maintain a stable level during the first three quarters of the year 2020, majorly because of the advent of the pandemic and the imposed lockdown. However, advertisers made a strong comeback in the fourth quarter of the year 2020 after the restrictions imposed on the country earlier were lifted and consumer spends surged. However, the rise in COVID-19 cases during the second wave of virus might act as a threat. Nevertheless, it is reported that India’s advertising sector will expand by 20.5 percent in 2021, keeping in mind the slow-paced growth last year.
But how is digital advertising growing this fast?
Well, the reason behind this is the rising growth of the digital economy. The rise of the internet and its usage, majorly due to the lockdown will continue to grow steadily and will expand its share of advertising from 36.6 percent in 2021 to nearly 40 percent by the year 2025. The growth includes various categories like the online gaming platform, e-business, edu-tech, and food & delivery platform. Digital advertising is said to outpace Television to become the largest advertising segment by 2024, as per the reports.
The digital advertisement segment currently has a market share of 35 percent and has already overtaken the print advertising segment which has a market share of 16 percent. The market share of the television segment is 45 percent but the fast pace growth of digital advertising shows that it will overtake the Television segment very soon. For now, the Television segment holds the highest importance in the country and is currently at the position of largest ad segment as of 2020 end.
Sandeep Goyal, the chairman of Mogae Media, a Mumbai-based marketing and communications agency, also said in a report that the day is not far when digital media will overtake Television. It will eventually take over the Television segment, but for now, the gap is too large and might not overtake the TV segment by 2024. “Digital is currently one-third of the overall television ad industry which stands at around 50,000 crores. I feel digital will topple TV but only by 2027-28” he said.
A popular edu-tech platform Upgrad also stated that they use a mixture of digital and offline advertising to reach out to people and capture their mindshare. Digital advertising takes major of its advertising process with Google, Facebook, Instagram, and LinkedIn being the major digital media platforms. The TV segment plays a secondary role in advertising, said the chief executive of the company, Arjun Mohan. The use of affiliate marketing on digital channels to drive brand awareness and performance is another source of digital marketing for the company.
Content marketing on YouTube and Instagram has been a successful medium for them too. A huge number of companies, just like Upgrad have started relying on digital media as the major source of their advertisement.
With the rise in digital marketing, you might be wondering how is it beneficial for all companies, to rely more on the digital segment of advertising, rather than any other segment? Well, the answer is simple. Now, everyone is using the internet. For work or entertainment purposes, everyone uses it. By using the digital segment of advertising, a company can reach an enormous audience in a cost-effective and efficient way. The group of potential customers that a company can attract using digital advertising is far more than what it can by using traditional ways of advertising.
Other than cost-cutting, it is beneficial in many other ways too. Through digital marketing, companies are able to connect more with their customers, which enhances customer loyalty, the most important thing for any business. Other than that, digital advertising allows a company to track its advertising and marketing efforts immediately. The company also gains the ability to reach a global audience at a comparatively low cost.
Eventually, the online advertising segment is expected to rise at a very fast pace in the next three years and is forecasted to reach a worth of $33.3 billion by the end of the year 2025, representing 20% of the digital ad pie. The race between the digital advertisement segment and TV segment will go on for a long time but with the current rise in the digital segment, it is quite clear that it will overtake the TV segment in the upcoming years.