Notwithstanding, the macroeconomic headwinds compelling most consumer sectors to control their ad spending, the country’s ecommerce platforms continue to spend in FY2024, which is expected to grow at nearly 15 per cent this fiscal. The rising popularity of digital-first brands since foraying into the market is shaping the course of ‘advertising’ due to program-backed advertising and evolving offerings of digital ad platforms. Digital advertising is poised to amass a significant user base of 800 million internet users, which will surpass television viewership in the next couple of years. In more concrete terms, if a recent study by Redseer Strategy Consultants is a pointer, then, amid consumption slowdown, overall advertising spend in FY2024 will see muted growth at close to six per cent and reach $16-17 billion, with challenger advertising platforms as the driving force. Digital advertising, which accounts for nearly 55 per cent of total spend, is set to grow at 6-7 per cent in FY2024. Moreover, besides the slow-down in consumption, the muted growth in ad spend can also be attributed to a dip in PE/VC funding and the levy of 28% GST on the real money gaming format.
The other significant trend is that despite slowdown in ad spending, advertisers have increased their ad spending on challenger platforms like retail media (ecommerce and quick-commerce), and content platforms (OTT audio and SFV), thanks to high conversion potential and wider reach among Tier-2 audiences, respectively. Digital advertising market in FY2024 is expected to remain muted at around 6-7 per cent growth rate and reach $8.8 - 9.3 billion in the fiscal. Lest one forgets, retail media and challenger platforms are zooming in digital advertising, while content formats are shifting more towards video and interactive mode. Retail media platforms like eTailing and Hyperlocal are expected to grow at nearly 20 per cent in FY2024 and increase its market share from close to 18% in FY2023 to almost 20 per cent. Content-based platforms are likely to retain their 20% share. Experts opine that with consumption to rebound in the next 4-5 years, advertising spend is projected to grow at 9- 10 per cent CAGR over the course of four 4 years, with digital advertising growing at 11-12 per cent in the same period.
They affirm that as digital natives have been shaping consumption patterns across the nation, brands have a never-before opportunity to address a much-larger and diverse consumer pool using the advertising mode. The rebound in consumption and growth across sectors will be driven by a rise in urban demand and the gradual recovery in rural demand, over the next 12-18 months, thereby catalyzing advertorial spending at a CAGR of 9-10 per cent over the next four years to scale up to $23-24 billion in FY2028. And that’s not without reasons. The rise of challenger platforms has defined the digital advertising growth in FY2024, which will be further consolidated in the coming years. It will be fascinating to witness cutting-edge creative strategies dominating various platforms, especially given the potential of programmatic advertising and GenAI.
