The report outlines how Digital Advertising platforms are evolving and addressing the maturing demand of advertisers and puts forth 5 key trends that are expected to take shape over the next two years.

1. © 2024 RedSeer Consulting confidential and proprietary information
Bangalore. Delhi. Mumbai. Dubai. Singapore. New York
Solve. New
Breaking barriers: Rise of challenger platforms in
digital advertising landscape
February 2024
Media round table

2. 2
© RedSeer
India’s advertising market
USD Bn, FY19-24E
Advertising spend in FY24 to be USD 16-17 Bn, the year has seen a muted growth
at ~6% in the fiscal
Source(s): Company annual reports, Redseer research, Redseer analysis
FY19 FY20 FY21 FY22 FY23 FY24E
9.7-10.2
10.8-11.2
9.5-10.0
13.5-14.0
15.2-15.7
16-17
~8% ~-11%
~42%
~12%
5.5-6%
Reasons for muted growth
Funding dip in consumer internet
Slump in overall consumption
growth
Regulatory uncertainty and GST
implementation on RMG

3. 3
© RedSeer
-10%
-5%
0%
5%
10%
15%
20%
1.3 1.4 1.6 1.7 1.8 1.9
1.5 2.0
0.1 2.1
0.2 5.0
0.3 5.1
0.4 5.2
0.0 5.3
0.5 5.4
0.6 0.7 0.8 0.9 1.0 1.1 1.2
Education
Gaming
Healthcare
IT & Telecom
Media & Entertainment
Others1
Realty & Infrastructure
Travel & Hospitality
eCommerce
Expected
Growth
in
Ad
Ex
(In
%,
FY24)
Automobile
BFSI CPG & Retail
Advertisement Expenditure (FY23, In USD Bn)2
Consumer Durables
& Electronics3
Short-term impact in advertisement spends – by consumer sectors
USD Bn, %, FY23, FY24E
Growth in advertising spending reduced for most sectors in FY24, with
eCommerce being the only exception
Note(s): (1) Others include steel, mining, etc. (2) Data excludes celebrity endorsement and public relations cost but includes agency commission, (3). Consumer durables and electronics includes mobiles
and smartphones
Source(s): Company annual reports, Expert IDIs, Redseer research, Redseer analysis
High growth Ad Expense
Decline in Ad Expense
Advertising market
FY23 market growth
FY24 market growth

4. 4
© RedSeer
Advertiser sentiment over digital advertising spends – by sector
Descriptive
Despite muted growth in FY24, brands are optimistic in their digital advertising
spend
Source(s): Redseer research, Expert IDIs
Sectors
Advertiser’s sentiment for digital advertising
Drivers for changing digital spends
FY19-23 FY23-24E Next 3-4 years
Automobiles Targeting audiences effectively is leading to increasing spends
BFSI FinTech is leading spends to increase penetration of financial tools
CPG & Retail Legacy players are starting to advertise their own D2C platforms
Consumer Durables Dependence on digital conversion is going to increase further
eCommerce High spends are going to stay stable through the next few years
Education Low retention of students is leading to decreasing digital ad spends
Healthcare Promoting preventive healthcare solutions is increasing ad spends
Travel & Hospitality Capitalizing on rising travel and tourism by tapping customers online
IT & Telecom Capturing touchpoints across new platforms to boost brand visibility
Media & Entertainment Short-term reduction in spends due to dynamic regulatory environment
Realty & Infrastructure Spends could increase with rise of micro-market focused platforms
Overall sentiment
High Medium Low
Digital ad spend outlook

5. 5
© RedSeer
94-96%
4-6%
Traditional
65-70%
30-35%
Digital
77-82%
18-23%
Total
Large
Businesses1
MSMEs
6.8-7.3
8.2-8.7 15.2-15.7
Advertising spend in India
USD Bn, %, FY23
MSMEs accounts for 1/3rd of digital ad spending in India; growing digital savviness
of MSMEs and self-serve advertising solutions have been the primary driver
Note(s): 1. Refers to enterprises with turnover higher than INR 250 Cr p.a.
Source(s): Redseer research, Redseer analysis
Key highlights
The adoption of digital advertising by MSMEs has picked up in
recent years with increased awareness about digital tools such
as self-serves available to them
MSMEs are increasingly using digital advertising post
pandemic
MSMEs across sectors are leveraging varied online platforms
ranging from social media to classifieds to e-commerce for
promoting their offerings
MSMEs are leveraging diverse online platforms for
advertising
Digital advertising has helped MSMEs enhance their reach to
customers across India and achieve sales with good RoAS
Digital advertising help small businesses enhance their
reach and sales

6. 6
© RedSeer
Digital advertising spend to be muted at 6-7% in FY24, becoming USD 8.8-9.3 Bn in
FY24, retail media platforms for ads have grown faster
Notes: (1) Retail-media platforms refer to eCommerce, Hyperlocal platforms that are at the bottom of the consumer funnel, (2) Content-based media platforms refer to social media, web-search,
streaming, news etc.
Source(s): Company annual reports, Redseer research, Redseer analysis
Digital advertising market
~21% ~31% ~44% ~53% ~55% 55-56%
Digital advertising as % of overall advertising market
Digital advertising market – by supply-side advertising platforms
USD Bn, %, FY19-24E
15%
85%
FY21
15%
85%
FY22
18%
82%
FY23
~20%
~80%
3%
97%
FY19
4%
96%
FY20
2.0-2.5
3.2-3.7
4.0-4.5
7.0-7.5
8.2-8.7
8.8-9.3
FY24E
~57%
~26%
~70%
~15%
6-7%
Retail Media1 Content-based media2
~20%
~4%
CAGR
(FY2023-24)

7. 7
© RedSeer
India’s digital advertising market – by platforms
USD Bn, FY19-24E
In a market dominated by global media platforms, challenger platforms are the
fastest growing
Challenger ad platforms
3%
73%
FY19
25%
4%
71%
FY20
22%
15%
63%
FY21
18%
15%
67%
24%
20%
18%
62%
FY23
~20%
~20%
~60%
FY24E
2.0-2.5
3.2-3.7
4.0-4.5
7.0-7.5
8.2-8.7
8.8-9.3
FY22
Digital giants1
Retail media
Content
Source(s): Annual reports, Redseer IP, Redseer analysis
Note(s): (1) Digital giants refers to digital ad platforms from Alphabet and Meta ecosystem

8. 8
© RedSeer
Goal type eTailing Hyperlocal OTT Video OTT Audio News SFV Gaming
Awareness
Consideration
Conversion
Retention
Major sectors
• Electronics
• FMCG
• Fashion &
BPC
• FMCG
• BPC
• BFSI
• CPG
• Durables
• eCommerce
• CPG
• Media &
Entertainment
• eCommerce
• FMCG and BPC
• Automobiles
• Gaming
• BFSI
• Gaming
• Fashion and
BPC
• Electronics
• Gaming
• Media &
Entertainment
Brand goals pursued on advertising platforms – by type
Descriptive
Challenger platform compares differently across marketing funnel
Source(s): Redseer research
0
1
0
1
0
1
0
1
1: Most favorable 0: Least favorable

9. 9
© RedSeer
Sectoral case study – challenger platforms
Case studies: Hyperlocal and India SFV are seeing rapid adoption amongst
challenger advertising platforms, advertisers are embracing their unique value-prop
Shortform Video Hyperlocal apps
Massive userbase
~ 250 Mn (MAU Dec’23)
Access to inaccessible
~65% users in Tier-2+
High-value transacting userbase
~ 85 Mn (ATU CY23)
Brand/ product placement in
customer purchase journey
enabling direct conversions
Ad revenue
($ Mn)
FY23 FY24E
FY22
36-40
65-70
14-16
Major SFV platforms
introduced ad
monetization in
FY 23
FY23 FY24E
FY22
200-220
240-260
160-170
Key value
proposition

10. 10
© RedSeer
Growth of consumer facing sectors
CAGR %, FY23-28P
With recovery in consumption and growth across sectors bouncing back, we
expect advertising spend growing at CAGR 9-10% for next 4 years
Source(s): RBI, Redseer research
Note(s): (1) eCommerce calculation based on GMV (2) Automobile is only 4W passenger vehicle
GDP growth 8-9%
20-21%
17-18%
13-14%
13-14%
12-13%
10-11%
9-11%
Education
Gaming
Retail
Automobile2
Consumer Durables
& Electronics
eCommerce1
FMCG
Advertising spend in India – by channel type
USD Bn, %, FY23-28P
~55%
~45%
FY23
~55%
~45%
FY24E
~60%
~40%
FY28P
15.2-15.7
16-17
23-24
5.5-6%
9-10%
CAGR
11-12%
6-7%
Digital
Traditional

11. 11
© RedSeer
Trends to look forward to in digital advertising
Next 2 years
Next 2 years to witness five major trends in digital advertising market, shaping the
space in the long-run
Factors to look forward to in next 2 years
5. Application
of GenAI across
advertising
value-chain
• Generative AI is
being integrated
across platforms
• Easier ad content
generation
• Multiple functions
like targeting to be
positively impacted
2. Growing
advertising
spending toward
Tier-2+ users
• Increased language
inclusivity
• Rural digital
adoption led by
regional platforms
• Growing vernacular
content on SFV
platforms
1. Influencers’
growth as cost-
effective medium
• Influencers act as
cost-effective
celebrities
• Increasing
relatability of brand
content
• Allow micro-
targeting, acting as
advertiser channel
3. Performance
advertisements
to see faster
growth
• Shift of focus from
brand building to
performance
• Higher emphasis on
advanced analysis
tools
• Performance-led
platforms to see
growth
4. Maturing
Programmatic
Play in digital ad
• Higher focus on
contextual
advertising
• Ad spaces growth
prompting
aggregation
• Need for ad
marketplace for
advertisers

12. redseer.com
Solve. New
Disclaimer and confidentiality notice: This document contains
information that may be confidential and proprietary. Unless you are
the intended recipient (or authorized to receive this document for the
intended recipient), you may not use, copy, disseminate or disclose to
anyone the message or any information contained in the document.
© 2022 RedSeer Consulting confidential and proprietary information
Bangalore. Delhi. Mumbai. Dubai. Singapore. New York
Thank You
query@redseer.com
facebook.com/redseerconsulting
twitter.com/redseer
linkedin.com/company/redseer-consulting