Driven by digital boom, Indian ad industry poised to hit Rs 1.2 trillion in 2024

Continuing on its growth trajectory, the Indian advertising industry is likely to go from Rs 1.1 trillion ($13.1 billion) in 2023 to Rs 1.2 trillion ($14.6 billion) in 2024, which is 50% higher than the pre-pandemic period. According to the IPG Mediabrands' Magna Global Advertising Forecast 2024, the country is also likely to become one of the top 10 advertising markets in 2025 with its advertising revenue set to grow by over 11.8% in 2024, up from over 11.2% in 2023.

This progress echoes India’s fast growing economy status, with its GDP projected to remain strong at around 6.8% in 2024 and 6.5% in 2025. This robustness reflects the continuing strength in its domestic demand and a rising working-age population, according to International Monetary Fund.

With the per capita income increasing multifold, the overall consumer spending outlook remains positive. Its fast-growing economy is projected to surpass China’s growth rate by over 2% points and the country is expected to become the third largest economy worldwide by 2028, leaving behind Germany and Japan.

Traditional media is also experiencing growth year-over-year. Linear formats to grow at 8.4% in 2024, which is a dip from 8.7% in 2023. However, print, radio and cinema are lagging from 2019 levels.

The print media circulation in 2022-23 went from 391 million to 402 million copies. Advertisers’ belief in this consumption story led to a handsome growth of 7% last year.

Source: IPG Mediabrands' Magna Global Advertising Forecast 2024.

In 2024, ad sales revenue will grow of over 6.1% to Rs 188 billion ($2.2 billion), but it is still 11% below pre-Covid levels. Digital print revenue is estimated to be Rs 13 billion ($159 million).

There was a drop in social media referral traffic as Meta dissociated itself with news, which is hurting publishers. Print advertising growth will come on the back of national elections and local elections in right states.

Venkatesh S, SVP and director for intelligence practice at Magna India, said, "Traditional media formats are also growing, enduring the relevance of print, OOH and radio in addition to TV. The government’s emphasis on digital public infrastructure is propelling digital ad spend to nearly half of total revenues by 2026. Our forecast highlights social media's significant rise, overtaking search as the second largest media format after television."

TV reaches 778 million viewers, up 759 million in 2022, and the overall time spent has increased to 230 minutes, up from 218 minutes in 2022. Close to a third of homes do not have television and linear TV has potential to grow.

The probable launch of direct-to-mobile will increase TV’s reach, as trials for this home-grown technology would soon be planned across cities. Overall TV ad revenues in 2024 will grow 8.7% to reach an estimated Rs 393 billion ($4.7 billion).

Source: IPG Mediabrands' Magna Global Advertising Forecast 2024.

In 2024, digital ad spends will grow by around 15.9% to top Rs 580 billion ($6.9 billion). Digital formats or new media contributing over 60% to the incremental revenue.

The current digital share of total revenues, which stands at 47%, is expected to reach 50% by 2026. Social overtakes search to become the second largest media after TV standing at 34% and 33% respectively. The digital pie will then be driven by display and video at 19% and 14%, respectively.  

Consumption trends continue to favour digital media as the government’s policies have been instrumental in developing digital public goods. With the democratisation of content consumption, ad-supported video on demand platforms have transformed viewership by providing easy and affordable access to live sporting events.

Hema Malik, chief investment officer of IPG Mediabrands India, noted that India's advertising industry is gearing up for an impressive 2024, with significant growth driven by pivotal events like the general elections and ICC T20 World Cup. “We expect substantial ad spend increases across sectors such as auto, retail, and consumer packaged goods (CPG). The anticipated 11.8% growth in ad revenues highlights the market's resilience and potential. With rural demand expected to rise due to favorable monsoons and digital ad spend projected to reach Rs 580 billion, the convergence of traditional and digital media presents unique opportunities for advertisers," she added.

CPG, auto, retail, government and political advertising, and finance are expected to be the most dominant sectors contributing to India’s advertising execution growth in 2024, followed by pharma, education, real estate, media and entertainment and building materials making up the top ten sectors.

In 2023, listed companies’ average income and profits have grown in double digits. This is encouraging as private investment in capacity building and marketing activities will increase.

The auto sector demonstrated significant growth across all segments in 2023, this is expected to boost marketing and advertising budgets in 2024. CPG continues to rise as more people start to move up the economic ladder and the benefits of economic progress become accessible to the public.

Radio is still ailing from the slowdown caused during Covid, recovering only 86% of the 2019 levels. While there is enormous increase in volumes, ad rates have remained soft.

The long-standing challenge of audience measurement capabilities is hurting the medium. Increase in government ad rates will help growth considering this is an election year.

Government recommendations on news broadcast, reduction in license fee and mandatory FM tuner on mobiles will bring windfall to the industry. The revenue for 2024 is estimated to be Rs 19 billion ($231 million) reflecting a growth of over 9% over previous year.

OOH media is on a growth trajectory and is expected to cross 2019 levels this year. All three forms—traditional, transit and DOOH—is showing incremental revenues.

The government push on infrastructure and urbanisation will boost OOH inventory especially premium formats. In 2024, OOH revenue will increase by 16% to reach Rs 34 billion ($402 million). DOOH’s share to total OOH is at 6%, growing at a 33% CAGR and will touch 11% by 2028.

In-cinema advertising was the biggest casualty of Covid, which has recovered to the extent of 72%. Successive come back from all languages with box office hits in 2023 and good inflow of content in 2024 will drive both demand from advertisers as well as surge in audience foot falls. In 2024, the growth is estimated to be 19% to reach Rs 8 billion ($95 million).