₹ 1 trillion industry: Indian advertising

Indian advertising crossed ₹ 1 trillion for the first time.

The Indian advertising market has been ever-growing.

The only year when it did not grow was 2020 courtesy of COVID.

Because of digital adoption, the media mix has seen a dramatic shift in the last 5 years.

2022, and the estimated advertising numbers for 2023 look like this:

Digital is clearly eating away the spending from traditional media and the trend is expected to continue.

Digital is now about 48% of overall advertising spending in India, which is massive.

Television has its own role to play in the Indian advertising context however print share has shrunk and flown into Digital largely.

And digital share is expected to reach 54% by 2025.

Digital advertising will continue to take away a substantial share of overall advertising spending till the foreseeable future.

But How will this impact you as a Digital professional?

Here is my take on it:

While the spending will increase there are many factors that will influence the content, the mediums, and the objectives with which the spending is done on different digital mediums.

Businesses are getting smarter and more efficient with digital spending now and most businesses, as well as individuals, have a basic to intermediate understanding of how different digital mediums work and how to accelerate the spending.

This was not the case till 2018-19, businesses were largely dependent on agencies and their recommendations and these businesses were never sure of what questions to ask from media agencies to understand the efficacy.

But, with most businesses, that is not the case anymore.

Individuals at all levels are getting smarter and now look at digital from a very ROI lens.

Any business that does substantial spending on Digital faces either of these three challenges:

• High CAC

• Low RoAS

• Unable to scale

Mostly, if your business is spending substantially on digital, you are likely facing one of the above challenges already.

Plus there are 2 major developments happening in the digital space that will also change the way businesses look at digital spending:

• Increase focus on user privacy

• Entry of AI at the front end of digital

Apple’s iOS 14 update or Google taking away 3rd party cookies are major steps in the efficacy of digital mediums.

Hence for most of the CMOs, one of the top concerns today is creating first-party data.

Businesses want to reduce their dependency on other platforms to reach users.

According to a survey by EY top priorities of CMOs in 2023 are:

I loved the clarity the CMOs have on the second challenge:

‘D2C: shortening the distance from discovery to conversions’

I feel this challenge is connected to the 3rd challenge of creating first-party data.

The faster businesses are able to convert the customer who is discovering your brand today to first-party data, the shorter will be the discovery-to-conversion distance.

The businesses that do not focus on creating first-party data today, for them, this distance will be longer and in the coming times because of limited retargeting capabilities on Facebook or Google, this distance will become longer.

If you as a marketing professional, keep a laser-sharp focus on creating first-party data and doing meaningful conversations with the acquired data and driving them to sale, you will be a prized marketing professional in the coming times.

Secondly, AI will bring a superstorm in marketing.

AI was there in marketing for a long time now.

But it was always at the back end, Google and Facebook ads have been using AI at the back end to make their ads smarter.

However, now we see AI making an entry to the front end (user-facing) as well.

In case you missed out on Google’s I/O event last week, generative AI is coming to Google search sooner than you expect.

ChatGPT has been the talk of the town for months now.

Last week Meta also announced the introduction of ‘Meta Lattice‘ which is an ad delivery program which will use multiple data points to better predict likely ad responses, through AI and other predictive technology.

All these developments will mean changes in the marketing, content, format, targeting and retargeting strategy for brands.

Without going into too much detail; these tools will pose both challenges and opportunities for marketers to think more holistically about providing solutions to their customers or potential customers.

For ex., with Google generative AI, users will see a summary of search results with every search they make, Google will continue to show organic results and search ads but my sense is Google will use E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness) factor more strongly and will prioritise the results that have more holistic solutions in the form of text, image, video results.

Hence, while digital spending is on the rise, complexity is on the rise too.

Digital marketers who continue to operate the way they used to till 2019 will face more challenges & will struggle.

Marketers who adopt these latest developments, build their business acumen and look to leverage their content using the latest tools, and capabilities and keep their undivided attention on customer experience will go on to become some of the best leaders in the coming 5 years.

That’s it for today folks.

Hope you have a lot more clarity about where digital is heading and how to navigate your career.

Have an awesome Sunday ahead.

Cheers,

Apurv

INdi