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Experts believe digital growth of 25 per cent upwards as programmatic advertising takes centrestage in 2017

22-March-2017
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Experts believe digital growth of 25 per cent upwards as programmatic advertising takes centrestage in 2017

Digital advertising has continued its impressive growth through 2016 and there seems to be no indication of this pace slowing down in 2017. The Pitch Madison Advertising Outlook expects digital to grow at 25 per cent in 2017, though industry experts we spoke with feel that the growth rate could be even higher.

The government’s demonetization drive has affected almost every medium, but what has been the others’ loss has been the digital medium’s gain. This is not to say that the medium has remained completely unaffected, but conversations with digital players reveal that digital advertising was largely immune to the effects of demonetization.

One side effect of the paucity of liquid cash in the market was to drive people to start using digital payment methods. It remains to be seen whether this will continue now that the economy has stabilized, but this is a welcome positive for the digital medium.

“The post-demonetization period has clearly shown how the country is set to leapfrog a few stages to embrace the power of digital. Mobile is being rapidly adopted and marketers have an unbelievable opportunity to improve the game of digital communication and deliver great customer experiences at each point of the journey,” said Ashish Shah, CEO and Founder of Vertoz.

Going forward, video advertising is expected to be one area which will see very aggressive spending. The reasons for this are manifold, but primarily centre on an increased appetite for online content consumption and rapidly falling data prices. The penetration of smartphones in rural areas will also feed the explosion of video content.

With digital expected to grow at around 25 per cent as per the Pitch Madison report, mobile advertising is pegged to grow at an even higher rate. According to experts, this will be driven by increased consumption of not only video, but also social content.

“Mobile advertising has been on an upswing and will continue on the same trajectory. With mobile becoming the primary device for the majority of the population, its importance cannot be overstated. More and more e-commerce players will move towards ancillary revenues (read advertising revenues), thereby providing an impetus to digital advertising. At the rate at which things are progressing in India, these estimates (Pitch Madison) are well within reach. From Rs 5,200 crores in 2015, the 2016 spends were pegged at over Rs 7,000 crores, which is a CAGR of approximately 35 per cent. It wouldn't be surprising at all if the current growth estimates are surpassed, given the momentum,” said Sunil Punjabi, Head of Business (South Asia) at C1X.

Programmatic advertising is also expected to continue its growth, entry barriers notwithstanding. However, though this might mean more efficient marketing for advertisers, publishers, especially the smaller ones, might feel the pinch of reduced ad rates.

 “What is happening with display inventory is that it is increasingly being sold via programmatic. As supply of inventory is increasing, brands are direct buying with few, top publishers and going programmatic for the remaining inventory. Unfortunately, yields through programmatic for publishers are lower. Programmatic advertising itself should grow by 50 per cent, while native advertising should increase by 30-35 per cent,” explained Anurag Gupta, MD (India) at SVG Media.

As advertisers start to understand the need of data-driven marketing and to become smarter with their targeting, formats that allow them to engage with the right consumer at the right time are gaining in importance. Native advertising, social media advertising, etc., are the buzzwords that are fast beginning to gain prominence in an industry that leans heavily towards performance-oriented marketing.

However, with the growth there are also new challenges that marketers and agencies will need to contend with. Consumers are increasingly wary of advertising that is distracting. Viewability of digital ads is something every brand is now trying to figure out.

“As digital advertising matures, challenges are only matched with the opportunities which tech-led innovations present. One of the biggest challenges which has troubled advertisers for a very long time and continues to do so is attribution mapping – brand to campaign. What does a million video views on YouTube do to my brand? Are we mapping these views to tangible brand metric? What are we doing with all the data created and how are we looping the insights back in to add value to the next campaign? These and many more such questions will largely define the way advertisers explore the way forward with their strategies and advertising,” opined Bhartesh Salian, VP and Head (Strategy) at Razorfish Digital.

Though digital might continue to be a relatively small piece of the advertising pie, the rate of growth over the last few years has been astonishing and 2017, it is expected, will be a key point in India’s digital journey. 

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