National elections & sports propelled ad spending by +2% in H1 2024: Venkatesh S

According to the recently released IPG Mediabrands’ Magna Global Advertising Forecast 2024, the Indian advertising industry is continuing on its growth trajectory. The industry is expected to grow from Rs 1.1 trillion (US$13.1 billion) in 2023 to Rs 1.2 trillion (US$14.6 billion) in 2024. This growth represents a significant increase of 50% compared to the pre-pandemic period.

Venkatesh, Senior Vice President and Director of Intelligence Practice at MAGNA India, highlighted that advertising expenditure is expected to outpace GDP growth, consistent with past trends. He also pointed out specific factors driving growth in the first half of 2024, including national elections and sports events, which are projected to contribute an additional +2% to year-on-year ad spends.

In conversation with exchange4media, Venkatesh S, SVP, Director- Intelligence Practice, MAGNA India spoke about the advertising trends for 2024 and much more. 

Edited excerpts: 

What factors are driving the growth of India's advertising industry in 2024?

AdEx in 2023 grew by +11.2%,  and in 2024, growth is estimated at +11.8%. Economic headwinds have been softening, and inflation pressure is declining. The robustness in the economy is reflected in strong domestic demand and consumer spending. Increasing per capita income and growing the middle class will fuel the advertising economy.  

Pro people policies will put more money in consumers’ pockets, which will flow back into the consumption economy. Monsoon is expected to be normal, and this will help demand to pick up in rural pockets. AdEx growth which typically follows Nominal GDP growth, is forecast at +10.5% for 2024 by the IMF. 

Advertising is expected to outpace GDP growth, as in the past. The growth story for H1 2024 will be driven by national elections and sports events, with these two factors expected to add +2% to year-on-year ad spends.  Growth will be seen across all formats, digital and linear. IPL has already seen increased participation from advertisers compared to the previous year. 

How is the digital media landscape expected to evolve in India by 2026, and what role does government policy play in this transformation?

The Government’s digital thrust has been instrumental in developing digital public goods. As of 2023, the wireless base stood at 1.15 billion subscribers, with 95% of the data consumed coming from 4G connections. The digital landscape is on its way to amassing a significant user base of 900 million internet users, and is set to surpass television viewership. The rise in mobile penetration and declining data costs are key drivers of this growth. Time spent on digital at 4+ Hrs is equivalent to that of TV. Long form video viewing universe Increased, especially with premium sports inventory moving in front of the paywall thanks to Jio and subsequently on Disney.  

The digital ecosystem will have navigated temporary challenges and setbacks in a cookie free world. Programmatic will flourish by leveraging 1p data and targeting based on content preferences rather than people based. Contextual advertising will regain focus as performance advertising scales up supported by technology. OTT and Retail media platforms will thrive as advertisers target high intent users, greater reach among Tier-2 audiences and increased attention spans. ONDC will expand its net to cover many categories, including digital products like Gaming, as current platforms like Playstore become unviable for content distribution. 

The integration of GenAI will be seen across the advertising value chain. In AdEx terms, digital will lead the media category with 51% share by 2026, overtaking television revenues. Social, the second largest format after TV, will widen its lead over other digital formats. Social and search together will surpass television.  

Which sectors are expected to dominate India's adex growth in 2024, and why?

Corporate India had a good run last year and is expected to continue their investments. FMCG had a good first quarter this year. Auto grew in all segments in 2023 and is expected to boost its marketing activities. E-commerce will continue with efforts to penetrate further into lower strata markets. In addition, Infrastructure, Finance and Consumer Durables sectors are expected to increase their acquisition efforts. SMEs, the long tail of the digital advertising ecosystem, which contributes close to 1/3rd of digital AdEx will continue to invest in performance marketing.               

What are the projected growth rates for traditional media formats like television, print, radio, and cinema in 2024 compared to pre-pandemic levels? 

While Television recovered quickly over the past three years, OOH is expected to cross pre-pandemic levels this year. Print, Radio & Cinema should return to pre-covid levels between 2026-28.