‘Digital ad growth gets a Covid push, to take lion’s share of the pie in 2022’

In its report titled ‘This Year, Next Year’ 2022, GroupM has projected that in 2022, digital will overtake television to become the largest medium and grow at around 33 per cent during the calendar year.

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“The pandemic has pushed the envelope towards digital and has hence topped the pie, with advertisers keen to explore more of it. E-commerce and telco will drive the economy,” Prasanth Kumar, chief executive officer of GroupM South Asia, said.

The total expenditure likely to be undertaken by various companies on advertisements in India are likely to cross the Rs 1 lakh crore mark and digital mediums are likely to grow faster than other traditional channels, global media investment company GroupM said in a report on Tuesday.

“The pandemic has pushed the envelope towards digital and has hence topped the pie, with advertisers keen to explore more of it. E-commerce and telco will drive the economy. We also expect FMCG and auto to slowly catch up and contribute towards this growth,” Prasanth Kumar, chief executive officer of GroupM South Asia, said.

In its report titled ‘This Year, Next Year’ 2022, the company has projected that in 2022, digital will overtake television to become the largest medium and grow at around 33 per cent during the calendar year. Overall, share of digital mediums will grow to 45 per cent from 41 per cent, as far as the expenditure on advertisement is concerned, the report said.

Last year, The Indian Express had reported that in 2020, the advertisement revenues from the India operations of BigTech companies Facebook and Google was higher than the combined ad revenues of the top 10 listed traditional media companies at Rs 8,396 crore.

While Facebook and Google combined earned Rs 23,213 crore in advertisement revenues, the top 10 media companies earned Rs 8,396 crore, which was nearly one-third. Both Facebook India and Google India, however, lag on aspects such as net revenue and net profit, when compared to traditional media companies. For example, while Facebook India reported a net revenue of Rs 1,481 crore, and Google India reported a net revenue of Rs 6,386 crore, Zee Entertainment Enterprises reported a net revenue of Rs 7,729 crore.

The main reason for this is that Facebook India and Google India operate on an advertisement reseller model in India, which means that they buy inventory from a global subsidiary of the firm’s US headquarters and then re-sell that ad space to their client in India. For this, they pay a share of their gross advertisement revenue to the global arm from whom they purchase ad space.

“… we are expecting a noteworthy revival for OOH (out-of-home) & cinema too after a tough period. Advertising on e-commerce, the rise of influencers and short format videos, along with OTT, has seen growth in 2021, which would continue in 2022,” Sidharth Parashar, president of investments and pricing, GroupM India, said.