Google bets on strong ad revenue growth in India

“I think India will explode in terms of revenues because the ad-to-GDP (gross domestic product) ratio in India is still very low. It’s 0.4%,” Gupta told ET. “Globally, it goes up 0.6 to 1%. So, I think it (India ad revenue) is in a growth phase. I think if we deliver to our customers, hopefully our revenue should also grow as the advertisement expenditure grows in this country.”

Google India has tailored its advertisement offerings in such a way that it is able to serve both small and big customers, which has served well in increasing the ad sales in the country, the senior executive said.

For the financial year 2021-22,
Google India had posted revenue of Rs 24,926.5 crore, a jump of nearly 80% from the previous year. Competitor Facebook India’s online services had clocked gross ad revenue of Rs 16,189 crore, up 74% on-year during the same period.

But, according to global forecasts, the growth of advertising space sales online will slow down in 2023 on the back of a cut down in discretionary spending by big tech companies due to the global economic uncertainty.

Among major markets, however, India is likely to remain the outlier. Most experts expect the country’s advertising market to grow between 14% and 17% in 2023.

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Global advertising and marketing agency Dentsu believes that the Indian ad market will grow 18.1% in 2022, after a 39.4% expansion in the first half of the year.
Overall, digital ad sales will continue to remain a key driver of the Indian advertising market with nearly 32% growth, and may also overtake television advertisement growth, the agency said in a report.

Advertising conglomerate WPP’s media investment arm GroupM has in a report said the Indian
advertising market is likely to grow 16.8% in 2023.

Globally, GroupM expects “advertising to grow 5.9%, with strong gains in connected TV, retail media and fast-growing markets like India”.

“This figure represents a slight downgrade from the 6.4% estimate we shared in June, but barring an escalation to the war in Ukraine or another pandemic-sized global disaster, we expect growth to climb in 2024 to 6.2% before returning to a trend of decelerating mid-single-digit growth through 2027,” the agency’s December 5 report said.