Digital ad growth stumbles in India in 2023, startups and regulations play spoilsport: Reports
As per Madison report, digital AdEx grew only 15 percent in 2023, compared to 50 percent in 2021 and 35 percent in 2022.
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Digital AdEx (advertising expenditure) in 2023 stood at Rs. 39,714 crores, a mere 15 percent increase over previous year.
Digital AdEx grew 50 percent in 2021 and 35 percent in 2022.
According to the Madison Advertising Report 2024 released on Thursday, after a significant growth which took digital AdEx from Rs. 3,970 crores in 2014 to Rs. 34,405 crores in 2022, digital AdEx seems to have hit a speed breaker.
“Inspite of this slowing down in growth, digital has again increased its share of AdEx to 40 percent. As is widely known, a lot of startups who earlier focused only on top line, thanks to easy availability of funding at inflated valuations, are now in distress to find further investments to keep their business afloat. In the meanwhile, many businesses within the startups like EdTech have stopped their huge spends. Real money gaming has crippled because of the government’s 28 percent GST imposition, while crypto currencies are not considered legitimate,” said the report.
However, it must be noted that in global AdEx, digital accounts for 73 percent of AdEx, whereas, in India it’s only 40 percent.
“When one looks at the digital figures by quarter, digital AdEx reflects a story similar to that of total AdEx and the strength of Digital AdEx increased dramatically with each quarter - Rs 7,148 crores in Q1 gradually moving up to Rs. 12,708 in Q4,” said the report.
Whilst growth in Q1 and Q2 has been at just 4 percent and 6 percent, growth rate in Q4 is a robust 27 percent.
“E-Commerce platforms have now seen high traction amongst advertisers and we expect advertising on E-Commerce to be Rs. 6,895 crore, registering a growth of 25 percent over the previous year, which in turn saw a growth of 35 percent over 2021,” the report added.
With this growth, E-commerce stands with a share of 17 percent in digital ADEX. Video spends continue to be the largest category within digital with a share of 33 percent.
