The process of posting sponsored material on an online or offline site and then targeting new prospects or re-targeting those who have shown interest is referred to as e-commerce advertising. The growth of the online ad market in India has been aided by increasing digitization and higher internet usage during the last decade. As of August 2020, the number of internet connections in India reached 760 million, as a result of the ‘Digital India’ program, a campaign launched by the government to improve online infrastructure and increase internet connectivity. An improvement in the quality and range of broadband access in India continued to assist the growth of digital advertising.
Competition within the digital advertising market is intensified by a few large companies that dominate the market. Google and Meta combined represent over 70% of the global digital advertising market. The financial strength of the duopoly, combined with the large number of consumers who use their services daily, makes competition from other companies a difficult proposition. The rivalry could intensify as large digital platforms such as Amazon and mobile applications such as Snapchat and Instagram acquire a greater market share.
Ecommerce advertising market value defines the aggregated value of the ecommerce advertising expenditure across platforms. The ecommerce advertising market in India was valued at $133 million in 2020. The ecommerce global market recorded a historical growth (CAGR) of 92% during 2017–20 and grew 33% in 2021, reaching $202 million. GlobalData projects the figure to grow at a CAGR of 42% during 2021–25.
The online advertising market registered strong growth in 2021, complemented by delayed marketing spending, traditional seasonal uplift, the rollout of COVID-19 vaccines, and the recovery of the economy. This improved the financial power of consumers and boosted their confidence and spending, increasing advertising spending in the market. The COVID-19 pandemic also accelerated the shift from traditional to online advertising on an unprecedented scale.
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