Mumbai: While there is an increasing acceptance of the digital platform among advertisers, it is unlikely to make a major impact on the print and television advertising in the near term as India is still behind developed markets in terms of mobile technology and internet connectivity.
“Given its miniscule reach and slow Internet speed in India, digital is unlikely to emerge as a key advertising vehicle in the short-to-medium term. Television would continue to be the mainstay for advertisers, given limited fresh content and absence of certain key target audience groups such as adult females on digital. Although print is vulnerable, we do not see an imminent threat,” said Bijal Shah and Jaykumar Doshi, analysts at India Infoline.
Digital now accounts for 7 per cent of the total advertising spends, compared with 1 per cent in 2003. According to India Infoline, digital media would gain traction among advertisers in the coming years with super model growth in internet penetration. This is expected to materially harm the print industry in the long term though the advertising spends on Indian print media would continue to increase in the medium term.
“However, a larger audience base and diversified viewer profile make television advertising indispensable. Additionally television is a better suited medium for certain types of ads such as new product launches or brand building. Hence, the impact of the Internet on television would be lower as compared with print,” Mr Shah.
According to India Infoline, advertising spend in India is much below its potential and have ample room for acceleration in coming years. For instance, India’s advertising spend, which is 0.37 per cent of GDP is significantly lower as compared to some of the developed and developing economies like US, UK, Japan, Indonesia, Brazil, Russia and China. This according to India Infoline leaves ample scope for ad spends to grow meaningfully faster than the nominal GDP.
