Will India’s digital ad revenue surpass projections?

Google and Meta India's combined ad revenue alone has crossed Rs 41,000 crore in FY22, which is higher compared to the total revenue projections of Rs 33,000 crore, triggering speculations

by Team PITCH
Published - November 14, 2022
5 minutes To Read
Will India’s digital ad revenue surpass projections?

India’s digital ad revenue may surpass all projections and predictions this year, if the recently announced annual results of Google India and Facebook India are any indications.

The two tech giants alone have earned a whopping Rs 41,115 crore in 2021-22 through online advertisements, compared to Rs 23,212 crore that they pocketed a year ago. Google and Meta dominate the Indian digital sector with nearly 80 per cent market share.

The cumulative revenue of Meta and Google is much higher than what the Pitch Madison Annual Report (PMAR) 2022 speculated for the entire digital segment. PMAR predicted digital AdEx of India to cross Rs 33,070 crore, nearly one third of the total advertising spend. GroupM’s  ‘This Year Next Year’ 2022 report had projected digital ad spend to touch ?48,603 crore in 2022, with nearly 50 per cent share in the total AdEx.

“GroupM’s projection also looks off mark if you include ad revenues of the e-commerce giants Flipkart and Amazon”, industry experts say. 

Amazon India and Flipkart posted nearly ?4,170 crore and Rs 2,800 crore ad revenue in the fiscal 2022 respectively, clocking nearly Rs 7,000 crore together. The figures suggest that these four players pocket Adex worth Rs 48,000 crore.

Over the past few years, digital advertising has expanded to several new social media platforms like Snap, Twitter, Linkedin, Whatsapp Business. Besides, OTT, Connected TV and gaming, have also opened up new advertising streams. All these primarily are popular among young consumers with much spending power which is attracting advertisers.

Rajiv Dubey, Media head of Dabur India, says, “Tech and e-commerce giants’ results are a clear indication that digital advertising revenue will surpass the PMAR prediction. Digital has seen a phenomenal growth in 2022. The current festive season also had digital flavour as more and more advertisers are investing a large chunk of their ad money in digital marketing.”

Google and Facebook are expected to continue to dominate the digital advertising space in India, while other players like e-commerce, OTT and gaming platforms could dent their share going forward, Dubey added.

The latest TAM data procured by e4m shows a higher growth in the overall digital ad insertions in 2022 (till July), compared to 2020 and 2021. The growth though declined after July suggesting subdued festivals, according to TAM data.

Shashank Srivastava, Senior Executive Director, Sales and Marketing, Maruti Suzuki, says, “It is quite likely that the projections and predictions for this year will be exceeded. The growth figure for the Indian market will probably be 40% against the 30% projected earlier. The digital Adex though probably will be under Rs 33,000 crore.”

Srivastava also points out that Google and Meta India’s revenue of Rs 41k crore also includes ad spends across the world from India.

Rahul Vengalil, Executive Director of Everest, a Rediffusion Group, agrees with Srivastava. Vengalil however adds that the ad spends outside India is miniscule in comparison to what brands spend within the country.

Ahmed Aftab Naqvi, Global CEO & Co-founder, GOZOOP Group, opines that the PMAR 2022 prediction had a very high degree of upward risk and it is certain now with the results that have come out.

“Diwali has been fantastic for digital ad spends which indicates that digital ad revenue will increase and surpass the benchmarks set last year. This is the pattern we witnessed for brands across sectors, year on year basis,” says Naqvi.

Naqvi further adds, “The Meta’s FY22 financial result shows an upward trend in ad spends majorly calculating the variables we had to adapt to in the previous two years. Moreover, 2022 flagged off with lifting all restrictions and allowing establishments to open digital and retail stores in full capacity resulting in greater spends.”

With multiple global events that supplement the advertising capabilities of brands, the spending is only indicating better numbers, he opines.


Even as leading corporates increased their digital ad spend and categories such as travel and hospitality which were not spending during the pandemic have also started advertising in FY22, it's the small and medium size businesses (SMBs) that are supposed to have contributed a lot in boosting tech and ecommerce giants' ad revenues.

“AdEx projections are often done by agencies who don’t map advertising by SMBs,” senior media executives point out. Many of these businesses quickly transformed into D2C brands during the pandemic and their growth trajectory largely relied on digital marketing, experts say.

Rahul Vengalil says, “Facebook and Meta are two platforms where anyone with a credit card or Paytm wallet and an online ad tutorial can start running ads.  You don't need too much intervention from a third party agency to run ads on these two platforms. On the other hand, the AdEx reports, while I am not entirely sure of the methodology, most likely cover the corporates and others who are advertising in a structured manner. Hence, a big chunk of digital advertisers are left out in the survey.”

Apart from SMBs, influencers who advertise on their own on Google and Facebook would never be covered in any AdEx report. Mom-and-pop stores who advertise online - they will also not be covered in any AdEx report, Vengalil explains.


Global scene

The global digital advertising market reached a value of nearly $486 billion in 2021, having grown at a compound annual growth rate (CAGR) of 18.5% since 2016, as per the "Digital Advertising Global Market Opportunities And Strategies To 2031" report released recently.

The share of digital advertising globally has grown up to 50 per cent. The Indian digital market is still unsaturated and hence bound to grow further, experts say.

India has nearly 6.3 crore (63 million) SMBs that are the cornerstone of the economy and vital job creators, contributing approximately 30% to India’s GDP and providing employment to over 114 million people in the country, according to India Brand Equity Foundation, Ministry of Commerce. The digital pie is surely set to grow.