The Meteoric Rise of Digital Marketing in India

India is undergoing a transformation with digital marketing emerging as a key player in the economy. Using strategies across social media, search engines and emails, companies can effectively engage with vast audiences. India is poised to become the world’s second-biggest online market with over 900 million active internet users by 2025, as per a report published in Business Standard. This growth not only impacts commercial development but also drives economic development and societal changes. Forecasts predict that India’s e-commerce market will reach US$ 200 billion by 2027 due to this shift towards digitisation. According to an article by the Financial Express, digital media now represents 44% of total advertising spending.

The current trend not only mirrors the changing behaviours of consumers but also highlights how digital marketing is reshaping economic growth and fostering better connections, across different sectors of Indian society. Digital marketing in India goes beyond a short-term trend; it signals a significant change that is reshaping the way businesses and communities interact.

Current landscape of Digital Marketing in India

The world of digital marketing in India is quickly evolving, presenting a mix of statistics and new trends that mirror the country's increasing digital footprint. While exploring this landscape of digital marketing in India, it's crucial to emphasize important data points that highlight this shift as well as the changing trends, in advertising expenditure.

• Critical trends in India's Digital Marketing landscape
  •  
  • Influencer Marketing
    In the age of social media, influencer marketing has emerged as a game-changer. Businesses are leveraging individuals with a significant social media following to advertise their products and services. According to a report by EY, the influencer marketing industry is set to grow to approximately US$ 400 million in 2026. In India, this trend is on a meteoric rise with influencers playing a key role in shaping consumer behavior.
  • Omnichannel Marketing
    Omnichannel marketing is ensuring a seamless and consistent interaction between customers and businesses across channels. A Harvard Business Review survey revealed that 73% of shoppers use multiple channels during their shopping journey. This strategy is crucial in the Indian market where consumers are spread across various digital platforms.
  • Artificial Intelligence (AI)
    The advent of AI in digital marketing is revolutionizing the way businesses understand and cater to their customers’ needs. AI and Machine Learning (ML) are helping businesses automate processes and gain a competitive edge. According to a PWC report, 77% of Indian businesses recorded tangible improvements in customer satisfaction after implementing AI.
  • Video Marketing
    Video marketing is a powerful digital marketing strategy, especially when businesses aim to expand their consumer base on video-led platforms like YouTube and TikTok. As per a CISCO study, video is projected to surpass all other content forms in terms of consumption. In India, with the increasing internet penetration and data usage, video content is gaining unprecedented traction.

Source: Statista

The growth of digital marketing in India has been marvellous. This is driven by the increase in internet users and the wide-spread usage of smartphones. On this basis, the digital marketing industry grew from US$ 2.39 billion in FY20 to US$ 6.46 billion in FY24 at a CAGR of approximately 28.5%. This rapid expansion underlines how much consumer behaviour has changed over the years and emphasizes the importance of online channels for businesses.

• Key statistics and trends
  India’s digital advertising industry has demonstrated resilience and flexibility despite a slowdown in growth rates. As per a report from Pitch Madison, the digital advertising expenditure increased by 15% in 2023 totalling Rs. 39,714 crores (US$ 4.76 billion). Looking ahead to 2024, this growth rate is tipped to level out at 17%. A change of pace, influenced by increased scrutiny around data privacy and a knock-on effect from Google's plans for a cookie-less future. Despite these challenges, the portion of digital advertising in total advertising is predicted to increase from 40% in 2023 to 42% in 2024. Already, this uptrend exemplifies the gauge for social media platforms in reaching and engaging consumers.

Source: Pitch Madison

• Growth of internet users and mobile penetration
  A major factor driving digital marketing in India is the increase, in internet users and mobile usage. It is estimated that by 2025, the active count of internet users will exceed 900 million, making India one of the largest markets across the globe. The digital revolution is coupled with growth in smartphone adoption; it is estimated that by the same year, there will be 1.1 billion smartphone users, according to Inc42. The more Indians join the online community, the more businesses are capitalizing on the opportunity to reach out to customers with tailored marketing tactics. Social media, e-commerce, and video content have created an environment where brands can engage with their target audiences with the help of various approaches.
• Shift in advertising budgets
  Digital marketing is significantly advancing in the allocation of advertising budgets. The traditional stronghold of print and TV ads is slowly being taken over by digital platforms. Notably, while print ads are expected to remain stable for the first time in 13 years, digital media has now taken the lead claiming a sizeable portion of ad budgets. In 2024, spending on print ads is predicted to increase 7% surpassing COVID levels and reaching Rs. 20,000 crore (US$ 2.40 billion) mainly due to political campaigns leading up to the parliamentary elections. Digital advertising spending is expected to grow at around 17% in 2024 reflecting a change in how businesses prioritize their marketing efforts. Television, which still commands a market share is projected to see single digit growth at 8% signalling a shift in consumer focus, towards content.
  With the ever-changing and evolving landscape, companies are adjusting their allocations to leverage the most of their marketings capabilities. This shift, in strategy emphasizes the rising importance of social-media platforms.

Impact of Digital Marketing on Businesses

The landscape of business, in India has been transformed by digital marketing. It allows companies to connect with a larger audience and nurture relationships with their clientele. With over 800 million internet users in the country, having a presence on social media and utilizing SEO techniques are crucial for enhancing brand visibility. Research indicates that a significant 78% of consumers turn to the internet to gather information, about products they intend to buy underscoring the importance of maintaining an online presence. Leveraging these platforms empowers businesses to boost brand recognition and actively engage with their desired customer base.

Other advantages that come with digital marketing are targeted advertisement and cost-effectiveness. Companies can always tune their campaigns to groups, ensuring that the information they convey goes to targeted human beings. For example, companies that use customized ads experience a tenfold conversion rate compared to those using traditional methods. Also, digital marketing could be less expensive, as it is reported that 61% of marketers claimed a better ROI through digital marketing compared to traditional marketing activities.

The future of Digital Marketing in India

The outlook on digital marketing for India seems exceptional and filled with potential. The industry's rapid expansion, fuelled by the growing adoption of cutting-edge technologies, such as AI and ML, sets the stage for businesses to revolutionize their marketing tactics. An active internet user base of 800 million, plus the quickly growing e-commerce industry, which is likely to reach US$ 200 billion by 2027. Ample opportunities are lying ahead for digital marketers. Noteworthy trends that stand out in this space are personalization, voice search optimization, omnichannel marketing, and data-driven decision-making. As more and more people and businesses adopt digital technology, the door for exciting new marketing strategies is widely open. Such innovations will not only help businesses realize their goals but also give consumers more choices and information to make better decisions.