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Digital adspend to surpass $1bn

News, 11 April 2016

MUMBAI: Digital advertising expenditure in India is forecast to surpass the $1bn mark in 2017 when it will account for 14.3% of total media ad outlay, according to the latest estimates from eMarketer.

The New York-based research company forecast that advertisers in India would allocate almost $1.2bn of their budgets to digital in 2017, representing growth of 27% on 2016.

Similar levels of growth over the next few years are expected to propel digital adspend to $2.39bn by 2020 when digital will amount to a fifth (20.2%) of total advertising expenditure.

However, one of the standout predictions in the eMarketer report is the rapid growth of mobile adspend, which this year was worth a relatively modest $242m.

But that means mobile adspend in India will have doubled in just a year from $121m in 2015 and huge growth over the next four years is expected to take total mobile adspend to $1.2bn by 2020, or around half (50.2%) of all digital adspend in the country.

It also means that mobile's share of total ad spending is expected to rise from just 3.3% in 2016 to 10.2% in 2020.

While the report focused on the rapid growth of digital adspend, it also confirmed that the overall media market in India is "growing robustly" with most expenditure still being allocated to traditional media.

"This year, eMarketer estimates advertisers in India will spend about $7.41bn on paid placements in all media, up 11.3% over 2015 spending levels. By 2020, spending will hit $11.82bn," the report said.

eMarketer's findings chime with Warc's own research, which predicted in December that digital adspend in India would surpass the $1bn mark in 2016.

Further, data from Warc's survey of mobile marketers in India, conducted on behalf of the Mobile Marketing Association, show that most (46%) expect their budgets to grow by up to a quarter this year, while a further 38% believe budgets could near double.

However, respondents also highlighted a lack of technological understanding and skills within the industry as a prime headwind to growth prospects.

Data sourced from eMarketer; additional content by Warc staff