Digital AdEx set to overtake TV: How are advertisers keeping pace? 

Industry predictions over the last few quarters about digital advertising surpassing TV are close to coming true this year. This has been further substantiated by numbers in the latest PMAR report that says digital AdEx will surpass TV in 2022 with 30% growth, adding Rs 33,070 crore to the total AdEx kitty of Rs 90,000 crore. On the other hand, TV AdEx is set to grow by 14% only and thus likely to add up to only Rs 32,100 crore, nearly Rs 1,000 crore less than digital. 

In 2021, digital grew by a phenomenal 50% taking the digital advertising expenditure to Rs 25,438 crore with a share of 34% in the total AdEx. Digital was just four percentage points lower than TV - the largest medium. 

While TV AdEx registered a higher spend of Rs 28,151 crore compared to digital, the overall growth in the segment was 25% in 2021, just half the rate of digital’s growth. 

Interestingly, the report shows that digital’s growth in 2021 stood at 50%. The percentage was the same for 2012 but the revenue added was considerably lower. While in 2021 almost Rs 8,500 crore was added to the AdEx kitty, in 2012 it was Rs 750 crore. In the last 10 years, digital has grown at a compounded annual growth rate of 27%. Although ad spends were slashed across mediums during the pandemic, digital has continued to grow by 10% contrary to the rest that saw a de-growth.

A vertical-wise break-up shows video has contributed highest with a total share of 29%, followed by social media and display at almost 20% each. E-commerce and search contribute 16% each to the overall digital pie. Almost all digital spends in India are on Mobile with the latter commanding a 96% share. 

Ecommerce advertising has also crossed Rs 4,100 crore in 2021, mainly on the back of Amazon and Flipkart. The report credits this growth to traditional brands that are adopting ECommerce as well as establishing their own online (D2C) systems. 

The report quotes Sam Balsara, Chairman of Madison Group, as saying: “I would advise the advertisers to take advantage of the evolved digital infrastructure for distribution and advertising to prepare for the future growth and to invest in building their own D2C channels.”

Is digital eating into other media?

Sharing key insights, Vishal Chinchankar, CEO - Madison Digital & Madison Alpha, told exchange4media: “Digital marketing is something that cannot be ignored. The pandemic has made people even more connected to their devices and obviously resulted in digital medium attracting more dollars.”

On the question of whether digital was eating into the share of other media or gaining new advertisers, Rahul Vengalil, Managing Partner of Isobar, a Dentsu group company, noted, “It’s actually a combination of both.” 

According to him, “During the pandemic we saw a huge increase in digital adoption from smaller brands in urban as well as semi-urban markets. They directly get onto Google and Facebook using their credit card to run ad campaigns. I personally know of a franchisee in Thrissur (Kerala) that has been advertising only on Google and Facebook for the past couple of years.”

Vengalil further said that traditional advertisers have also increased their digital spends over the past few years. “This is eating into the share of other traditional platforms like TV, Print and Outdoor. Therefore, while there is growth across mediums, digital is getting the highest share.”

As for Vishal Jacob, Chief Digital Officer, Wavemaker India, “Digital as a medium is well-suited to meet the needs of start-ups, SMBs & D2C companies as even the major digital platforms allow advertising at very low ad budgets. They have a huge pool of readily available and targetable digital users.”

“That’s why for each TV advertiser, there are 5 advertisers on digital. One should note that every medium has got its digital extension. Connected TV/OTT has become the preferred medium of entertainment for some consumers, reducing the dependence on TV or cinema. Similarly, audio streaming sites and podcasts for radio and news sites have grown considerably reducing the need for print etc,” Jacob noted. 

Advertisers tweaking media strategy? 

Print, Outdoor and Radio have turned into a primordial mode of advertising during the pandemic. Most advertisers and agencies are already investing in digital media strategies on top-funnel (branding), middle funnel (engagement) and bottom-funnel (performance).  

However, with a change in scenario they might take a fresh look at their overall media strategy to cash in on digital growth, industry leaders say. 

FMCG clients have been focusing a lot on videos for the past three-four years that suit both TV and digital, Vengalil says. “Influencer marketing has also gone up. So, there may not be any significant change in the media strategy of ad agencies. However, since digital advertising requires multiple levels of campaigns to attract and retain consumers, advertisers will have to deliver a bouquet of digital ads frequently.”

Another area where digital advertising has seen an exponential increase is Connected TV (CTV), mainly users among the urban population of the country. The user base of CTV has gone up to six to eight million in India. Experts see a corresponding growth in OTT advertising this year. 

“OTT ads will increase now. There may be a little shift in offline advertising as well that often takes place at cinema halls, malls and colleges due to increased digital activation in urban and rural areas,” Vengalil further added.

Lloyd Mathias, Business Strategist and Marketing Expert, says, “For a host of advertisers who were used to TV and Print as being the dominant mediums this represents a whole new reality.  For one they now have little choice but to think digital-first. Typically, many advertisers would use digital to amplify creative or for retargeting. Now with Digital AdEx expected to overtake Television, using digital as a secondary option may not work.”

Hinting at the need for corresponding changes, Mathias says, “For both advertisers and creative agencies, this means having your best teams working on the digital – unlike historically when the creative superstars were those who did the TV commercials.”

Now, advertisers prefer engaging with TV and Digital media. Even between the two, the choices are now being made on factors like audience composition, platform consumptions and investments where digital often wins, says Shradha Agarwal, COO & Strategy Head, Grapes. 

“The advertisers have started building media plans in a more coercive manner so that TV and Digital media are observed under ‘collaborative media planning’,” she said. 

Hybrid Planners: Need of the Hour

Industry leaders admit they may have to upskill their workforce to leverage the growth of digital and even might go for requisite talent hunt that is already in short supply due to a surge in demand. 

“Hybrid planners are the need of the hour. Agencies understand the need to build talent by retaining and upskilling them. Talent hunt continues to be ongoing due to demand in the digital medium,” says Vishal Chinchankar. 

Sharing more on this, Vengalil said. “We need experts who can work effectively on both - traditional and digital media. Many people are still not comfortable with the digital technology. Hence, upskilling the current workforce is a must. Since it is an evolving medium, leaders will have to upskill themselves with the help of online tutorials offered by Google, Facebook and YouTube to remain updated.”

Sarvesh Raikar, Regional Creative Officer, Lowe Lintas, says: “The state of readiness has to be 100%. The upskilling has to start now, it’s always better late than never. But at the same time there is so much talk about ‘let’s get young people for digital’, and it’s a bit biased because we are not reposing enough faith in the experienced folks. If our grandmas can rock insta reels, so can our agency folks. 70+ year-olds are paying bills online and updating their DPs with so much ease – it’s a matter of plain evolution. Yes, even in the world of advertising. So let’s stop overreacting and instead expose the creative teams to the best practices around the world.

More Churn on Cards

The rise of digital advertising during the pandemic had already led to a massive reshuffle in the advertising industry in India and abroad in the last two years. 

“More churn is expected now as there is a significant gap between the demand and supply,” Vengalil says. 

According to Chinchankar, “Digital has already led to poaching of talent at every level, leading to a high churn. This is mainly because digital-first businesses and start-ups attract huge funding and are hiring galore. Secondly, ad agencies have been poaching employees from other ad agencies due to demand.”