• Digital advertising refers to marketing through online channels, such as websites, streaming content, and more. Digital ads span media formats, including text, image, audio, and video. They can help you achieve a variety of business goals across the marketing funnel, ranging from brand awareness to customer engagement, to launching new products and driving repeat sales.
• The digital advertising market (also known as online marketing, Internet advertising, or web advertising) consists of revenues gained by any advertising activities performed by the means of the internet using mobile devices and personal computers.
• Online advertising offers exposure to the mass markets at affordable prices. In addition, technologies such as mobile ID matching, geolocation, passive metering, and AI facilitate new ways to measure consumer trends and behaviors and improve advertising effectiveness. 

Market Overview:

• The global digital advertising market was valued at nearly USD 486 billion in FY21, growing at a CAGR of 18.5% from FY16. By FY26, the digital ad market is predicted to grow at a rate of 15.1%, reaching USD 980.2 billion. Between FY26 and FY31, the market is forecast to grow at a CAGR of 12.8% to surge to USD 1793.6 billion in value.
  
• The Indian advertising market size reached INR 667 Billion (USD 8.1 billion) in FY21. The market is expected to reach INR 1,272 Billion (USD 15.5 billion) by FY27, exhibiting a growth rate CAGR of 11.3% during FY22-FY27.
• The Indian digital advertising market experienced very strong growth during 2017–21, with a CAGR of 19.4% over the 4 years. The Indian digital advertising market grew by 20% in 2021 to reach a value of Rs. 1,89,380 million. India accounts for 2.1% of the Asia-Pacific digital advertising market value.
• Mobile is the largest segment of the digital advertising market in India, accounting for 83.5% of the market's total value. The desktop segment accounts for the remaining 16.5% of the market. 
• The digital ad market has largely been driven by increasing digitization and higher internet usage during the last decade. As of August 2020, the number of internet connections in India significantly increased to 760 million, driven by the ‘Digital India’ program, a campaign launched by the government to improve online infrastructure and increase internet connectivity.

Key Drivers:

• The advertising technology industry saw a surge in M&A activity in 2021, and opportunities continue to grow within the sector. In 2020 and 2021, ad tech saw more than 3,500 rounds of financing and almost 1,500 M&A deals valued between $125 and $130 billion.
• Mobile phone usage has increased significantly during the historic period. According to MarketLine, the Indian mobile penetration rate was 88.34% in 2020. The widespread availability of 3G/4G/5G mobile services and a surge in internet penetration have fueled digital ad spending, especially mobile advertising.
• Technology has disrupted the digital advertising landscape, and the COVID-19 pandemic has hastened the process of digitization. Technology redefines the digital advertising space by boosting efficiency, precise targeting, and personalization, maximizing customer experience, encouraging customer retention, fostering innovation, and maximizing ROI. 
• The digital subscription also grew 29% to reach INR 56 billion. 80 million paid video subscriptions across almost 40 million Indian households generated INR 54 billion.
• Television segment revenues are expected to grow at a CAGR of 4-5% to reach INR 826 billion by FY24. Television advertising grew by 25% in FY21 to INR 313 billion and is expected to reach INR 394 billion by FY24. Television households are expected to grow at 1% till FY25.

Key Trends:

• Incorporating augmented and virtual reality in advertising campaigns plays well with users' desire to prioritize the shopping experience over the product’s price. Besides, these technologies in marketing can be used to appeal to a younger audience.
• Digital’s share of spend is forecast to increase more slowly moving forwards, at 55.3% in FY22, it is predicted to reach 57.1% in FY23 and 58.2% in FY24.
  
• Digital is now firmly established as the largest and most adaptable medium, capable of building brands and selling products. Global digital ad spending stood at USD 347 billion in FY21 and it continued to grow by 13.7% in FY22. It is expected to grow by 7.2% in FY23 and by 6.9% in FY24.
• Omnichannel marketing is believed to be one of the most effective ways to reach the target audience. It is an approach that stands true to the definition of digital marketing – using different digital mediums to promote, engage, and serve customers. 
• Social media platforms have offered a new space for companies to promote their products or services to their target audience. Video marketing is a potent digital marketing tool popular among businesses trying to increase their customer base. Experts believe that videos are more effective than any other form of content; that’s why many brands are shifting their focus to developing content-rich and enthralling videos to promote their products or services.
  

Competitive Landscape:

• Rivalry within India’s digital advertising is intensified by a small number of huge companies that dominate the market. Group M, Adscery, Kinnect, DDB Mudra Group, and Dentsu Aegis Network is the leading players in the segment.