A report released on Tuesday predicted that digital ad spending in India will reach $21 billion by 2028, due to the increasing use of mobile devices and the internet. The growth of user-generated content (UGC) will allow creators and influencers to establish their digital identity, which can be utilized by brands for digital advertisements.
According to the report by Redseer Strategy Consultants, this ecosystem of 2.5 to 3 million creators is expected to drive marketing spending of $2.8 billion to $3.5 billion by 2028. The digital ad spend in India is expected to see a slow growth in the fiscal year 2023 due to macroeconomic factors, after which it is predicted to make up 65-70% of overall ad spend in the country, with a compound annual growth rate of 19-21%.
“Upon mapping market sizing across media agencies, we observe a significant under-reporting of digital ad spend in India. However, our projection has considered enterprise spends, SMB spends, influencer marketing, affiliate marketing and gaming,” IANS quoted Mukesh Kumar, engagement manager, Redseer, as saying.
Digital platforms have high engagement rates as users spend around seven hours a day on their smartphones. E-commerce, short videos, OTT, social media, long-form videos, and news outlets are among the top performers driving digital advertising platforms.
The global economic slowdown, caused by rising interest rates and energy crises, has led new-age companies to prioritize profitability and control their ad spending, resulting in slower growth projections for the fiscal year 2023. The ad market is estimated to grow by 6-8% in the fiscal year 2023 under the current economic conditions, according to the report.
“We expect macroeconomic engines to pick up momentum again by FY24 since, after every economic downturn, eventually, consumer morale returns,” it added.
As the creator economy grows, it is essential to bridge the gap between brands and influencers through a centralized platform such as the creator marketplace, the report mentioned.