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Exploring the Rise of Digital Advertising: Understanding the Cost, Platforms, and Factors Driving Growth

Digital advertising has seen significant growth in recent years, with the industry in India growing by 29% in 2021 to reach INR 246 billion. This can be attributed to an increase in internet penetration, the number of smartphone users, and online video viewership. In this blog post, we will discuss the various forms of online advertising, the average costs of online advertising, and the factors driving the growth of the digital advertising industry.

Cost of Online Advertising

The cost of online advertising is never static or fixed, as it depends on a number of factors. One of the perks of advertising online is the ability to get real-time reports of ad performance and have control over delivery by filtering out unwanted audiences through targeting. This can increase the average cost of online advertising in terms of cost per reach as these ads are more accurate and work harder than offline ads to reach the intended customers.

The average CPC or cost per click for most platforms is Rs 5 – Rs 10. However, this can vary depending on the requirements of the advertiser. The pricing models that largely determine the cost of online advertising are CPM (cost per thousand), CPC (cost per click), CPA (cost per acquisition), and CPI (cost per install).

Online Advertising Rates:

  • Online advertising rate can be divided into two parts: banner ads and video ads.
  • The average online advertising rate for banner ads ranges from Rs 50 to Rs 150.
  • The average rate for video ads ranges anywhere from Rs 100 – Rs 400.
  • Different digital platforms have different advertising rates.
  • For example, Google search advertising has an average benchmark CPC of Rs 20.
  • Facebook’s online advertising rate can range from Rs 40 to Rs 20,000 per day.
  • Instagram and Twitter also have different rates,
  • Average cost per click for Instagram ads is Rs 8 and the average cost for impressions is Rs 50

Growth of the Digital Advertising Industry in India

The digital advertising industry in India grew by 29% in 2021 to INR 246 billion. The growth can be attributed to several factors such as internet penetration, the number of smartphone users, and online video viewership. Search and social platforms contributed the highest to the total digital advertising revenue, at 69%, while advertising on e-commerce platforms contributed 16%. OTT, short videos, news, and audio had a share of 7%, 4%, 3%, and 1% respectively. The industry is projected to reach INR 314 billion in 2022.

Factors driving growth:

  • Internet penetration in India reached 834 million with 795 million broadband connections (Sep 2021)
  • There were 503 million smartphone users and 10 million connected TVs in India in 2021.
  • An average Indian spends about 4.7 hours per day on their phone.
  • Online video viewership in India grew to 497 million in 2021.
  • An average Indian spends 52% more time on OTT apps than before the pandemic.

Conclusion

The growth of digital advertising is driven by several factors, including an increase in internet penetration, the number of smartphone users, and online video viewership. With digital advertising, users can get real-time reports of ad performance and have control over delivery by filtering out unwanted audiences through targeting. The average cost of online advertising can vary depending on the medium, platform, and pricing model used. The digital advertising industry in India is projected to continue growing in the coming years, reaching INR 314 billion in 2022.

Courtesy: themediaant.com
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