What lies ahead for digital advertising in 2023

Considering the economic scenario, advertising budgets will be cut marginally, but digital AdEx will not be impacted much, say experts

e4m by Kanchan Srivastava
Published: Nov 28, 2022 8:35 AM  | 9 min read
digital marketing

After being a flagbearer of advertising for a couple of years, digital media giants are going through a rough patch now. The second half of 2022 has been particularly difficult for giants like Google, Meta, Twitter and Amazon--which are major digital advertising platforms. Google is reportedly planning to let go of 6 per cent of its employees which is roughly about 10,000 people out of 1.8 lakh employees. Meta laid off over 11,000 employees, Twitter is left with less than a third of its entire workforce, and Amazon is also expected to continue layoffs well into 2023. 

The sudden slowdown at the big techs has come at a time when their Indian counterparts are reporting a jump in revenue. Google India and Meta India, which dominate the Indian digital market with over 80 per cent share, have posted Rs 25,000 and Rs 16,000 crore of ad revenues respectively in FY22 that amounts to Rs 41,000 crores compared to over Rs 23,000 crore that they pocketed together a year ago. Amazon India too collected nearly Rs 7,000 crores of ad revenue in FY22. 

How will the churn at these giants impact digital media and the Indian digital advertising ecosystem as a whole in 2023? Will digital ad spend continue to grow? exchange4media sought to find the answers: 

Rajiv dubey, head of media, Dabur India, says, “Barely two months ago, there were intense debates on moonlighting in the tech industry which suggested a shortage of workers. Now, suddenly tech workers are being laid off. I feel, tech companies are in a rationalization phase at the moment. Perhaps they overinvested in some categories, like Meta invested a lot in metaverse, but after losses, is focussing back on the main platform. Twitter was also losing money and Elon Musk is putting the house in order; hence the rationalization.”

This is a temporary phenomenon and hence its impact on digital AdEx would be limited, says Dubey, adding, “The digital AdEx will not come down but its rate of growth may be stunted. Digital will have a double digit growth but the CAGR for next three years may remain below 30 per cent.” 

“Macroeconomic situation across the world is not very positive which may negatively impact the advertising spend in 2023”, says Paras Mehta, Business Head, Matterkind, an IPG group company. 

“The brands headquartered in the US will reduce the ad spending. Indian brands may also tighten their purse strings. However, digital AdEx will not decline. It will continue to grow though its growth may come down to a single digit. We are expecting a shift in offline money to online one,” Mehta speculates. 

Mehta explains that digital will grow for many reasons; such as it offers a complete measurement of customer journey, there is no entry barrier to be present in digital platforms, it's a lot easier to create an online campaign compared to traditional campaigns.  

“While there are job losses in that part of the world, it won’t impact India. In fact, India will be hiring a lot more in 2023 and India’s growth story is poised as predicted,” says Rammohan Sundaram, Country Head & Managing Partner – Integrated Media, DDB Mudra Group. 

Sundaram explains, “Our economy is robust and does not get impacted because of the issues that are being faced by the west and while sentiments in the US are low on consumerism, it is more to do with how their story is panning out and our dependency is largely human capital-driven.”

Rahul Vengalil, Executive Director, Everest Solutions, a Rediffusion group company, feels that considering the economic scenario, advertising budgets will be cut marginally, but digital AdEx will not be impacted much. 

“Most brands have realized that traditional media is costly. They are focussing a lot on video advertising which is getting a major share of their ad budget pie. Hence, digital Adex will not contract in 2023. However, we may not be having as many campaigns as we used to have before. Reduction in ad production budget is also likely. Instead of large scale shoots, brands may opt for rehashing some campaigns,” Vengalil says. 

Adds Ahmed Aftab Naqvi, Global CEO & Co-founder, GOZOOP Group, “Given the boost of super-fast network protocols like 5G and AI, digital media will see the continuation of innovations and developments in transformative technologies. Programmatic advertising and industry-specific social engagement actions will witness a positive growth. Categories like FMCG and Tech hold the potential to bring about the delta increase in media spends.”

Naqvi insists that digital advertising will continue to grow and increase its share of the overall advertising bucket.

Sundaram echoes the sentiments, “In 2023, digital advertising will be the flagbearer of AdEx growth in India. In December 2022, digital advertising would have overtaken television advertising spends, however, there is a shift is in consumption and device changes. Cable and satellite (C&S) consumption on television will decrease but family viewing is not stalling. Television as a device will continue to beam content but the source of those beams are changing. C&S is dropping and 4G streaming is increasing. With 5G round the corner, digital advertising is only going to dramatically increase in 2023.”

 Consumer sentiments are positive 

Anil Suryavamshi, Associate Vice President, Planning, Carat India, recalls the 2001 recession when the “lipstick index” phenomenon was born. 

“Estée Lauder observed an increase in lipstick sales during that recession. In 2023, we can expect to see a similar story. We have seen beauty and cosmetics sales going up as young women are more inclined to prioritizing buying skincare and beauty as treats when on a budget. Ulta Beauty smashed its Q2 earnings expectations across all major categories. Coty’s cosmetics sales are up, with “prestige” sales rising by 20 per cent during the beauty brand’s financial year. Meanwhile, Target and Walmart are both refreshing their beauty departments, with Walmart offering a more affordable display called Beauty Finds,” Suryavamshi points out.  

He explains further, “Revenge travel is back with a bang - the number of people purchasing vacations or travel tickets has increased by 19% since mid-2021(outside China). People have been cooped up for so long, so many aren’t willing to scrap getaways again. According to the survey done by GWI, upon asking what would bring them joy in the future, 55% said travel/taking vacations – ranking second behind spending time with their family.”

Hence, even as financial confidence is starting to dip, clothing and ordering delivery tops the budget treats list in 2023. So, every recession brings out new learning and it will be interesting to see what this one is going to teach us, Suryavamshi added, highlighting the positive sentiments of consumers and markets. 

Mihir Palan, VP, Media, Kinnect, also feels that India won't remain untouched by global recession. “The economy is expected to have a below par growth of 5.9%. This will force India inc. to look at cost optimisation measures, as a result digital ad spends which gives dual gain in terms of reach as well as ROI will gain increased importance in the media mix. However, TV will continue to dominate the AdEx industry for 2023 but online spends will almost come at par with the TV,” says Palan. 

Focus to be on performance marketing 

Rajiv Dubey says that the brands would focus a lot on performance marketing in 2023. However, it won’t last long and the focus will be back on brand building sooner or later.

Performance marketing is focused on generating leads and sales, while brand marketing is focused on building awareness about the brands which requires major budgetary allocations. 

Reels & YouTube Shorts to boom 

Experts say that videos, especially short-form videos, will continue to dominate the digital advertising segment.  

Shradha Agarwal, Co-Founder and CEO- Grapes, says, “Instagram Reel has been at the top of the list for this year. It acted as an effective medium for brands, businesses and creators to connect with their target audience. Brands/ agencies will harp on the platform in 2023 also. The key trends that will dominate the digital marketing industry will be YouTube shorts and brands focusing on data-enabled content. Content creators are looking forward to experimenting more with YouTube shorts as from next year monetization will happen, which opens another avenue for brands to focus on a different territory.”

Tech adoption to grow

‘Integration’ will be the keyword for digital media in 2023. The industry expects an increase in the adoption of technology, especially in Artificial Intelligence and Machine Learning by brands to cut the cost. 

“We have seen how Cadbury used AI in its Diwali ad with actor Shah Rukh Khan to promote hundreds of local enterprises. Use of AI/ML will help cut the cost of content creation, script, auto automatization,” says Paras Mehta. 

Digital media would be integrated into traditional means to create unique engagement pathways to connect with the people, says Rajni Daswani, Director - Digital Marketing, SoCheers. 

Daswani adds, “One of the major examples of this is the upward trajectory of digital outdoor screens and billboards. While they’re definitely likely to find more use cases, it’ll be interesting to see how 3D and 4D billboards are used in brand campaigns. With brands like Tanishq and Hyundai having already made headways in this direction, the stage has already been set.”

“Further, integration of advanced technology into digital is going to find way more prominence. MadTech - the convergence of Marketing, Advertising and Technology - has visibly grown in the last year. MadTech will be a much more commonly-used term in the digital sphere in 2023,” she further explained. 

Talking about technology, Daswani said, Metaverse is yet to be leveraged to its full potential. We have obviously seen some brands being the forerunners of metaverse marketing, like Nike, Gucci, Coca-Cola, etc. With more brands and advertisers joining the foray in the coming year, the audience will get to experience certain aspects of the metaverse in more detail.”

She adds that experimenting and innovating with the creator economy is the way to go about it.

Hiring to go up

Considering the fact that tech companies are witnessing a slowdown, one of the possibilities that can emerge is that a lot of agencies hire people from the technology side depending on the work demand. However, agencies need to be more observant of the salary packages because there is a huge pay parity between both industries, Agarwal says. 

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‘Monetisation of news platforms biggest challenge in digital era’

At e4m-DNPA Future of Digital Media Conference, Dr Annurag Batra, Chairman & Editor-in-Chief, Businessworld & exchange4media, spoke to CEOs on monetisation, fake news, consumer attention & much more

By exchange4media Staff | Jan 30, 2023 10:58 AM   |   3 min read

DNPA

At the e4m-DNPA Future of Digital Media Conference, a panel discussion with CEOs of top companies was held to discuss digital media and how the new generation of readers is influencing media houses and their ways of connecting with their audiences.

The panel was chaired by Dr Annurag Batra, Chairman & Editor-in-Chief, Businessworld & exchange4media. On the panel were Avinash Pandey, CEO, ABP Network; Puneet Jain, CEO, Hindustan Times; Hemant Jain, President and Business Head (Digital), Lokmat, and Sanjay Sindhwani, CEO, The Indian Express (digital).

Avinash Pandey spoke about the challenges in the digital era. “The biggest challenge today is reaching out to the consumer. When everybody has become a publisher and a broadcaster, how your authentic news reaches the consumer first, and how you monetize it best is the biggest challenge today in our industry.”

Speaking on the opportunities that the digital world has created for publishers, Puneet Jain said: “I think the biggest opportunity for our publishers’ communities is the tremendous interest and love we see from our users. All of us continue to track millions who are using our platforms to consume news on a daily basis. In fact, what we are seeing is a huge reinforcement towards credible journalism in these interesting times of a social world we are living in.”

Sanjay Sindhwani veered the discussion to the problem of fake news and how publishers and consumers together can fight it. “The opportunity is massive. But I think the cost is also massive. I think today what is happening is if the media business doesn't become viable, then we'll see a lot of fake news floating around. When you're trying to bait clicks, you try to provoke people with things, which may not be real or factual. So, I think that's the cost of it. And I think in a democracy, it's very important that people value good content and good news sources and learn to pay for it.”

Taking the discussion ahead, Hemant Jain spoke about how the short attention span of consumers is the biggest challenge for consumers today. “While monetization continues to be the lowest common denominator and the most common challenge for most news publishers across the world, I think if you keep the consumer at the centre of your entire ecosystem and the business model, there is a huge shift in consumer behaviour with regard to the attention span. So, if you look at human attention today it is the lowest. Now, how do you evolve yourself keeping the shift in consumer behaviour in terms of newer formats of news media content, which ensures that you are able to create the right connect with the consumer and thereby create a great value proposition is something which would which all of us would have to kind of today embrace as one of our bigger challenges.”

He ends his view by talking about first-party data as a big opportunity for media publishers and how they can monetise it. “The big opportunity I see is our investment of time, money and resource in building the first-party data because it's not just about collecting data, but it's about managing customer lifecycle. So, most of us complain about the lesser frequency of visitations in a month, lesser time spent and how do we increase frequency and time spent to increase a better value proposition for advertisers? Now, that's interesting, because we have to start thinking like B2C brands, where we start not only capturing consumer data, but also start serving content which is more relevant more contextual, and in the process, collect enriched data, which can be monetized or leveraged at a higher value or premium when it comes to advertising.”

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Twitter advertisers to know if ads seen by real users or bots

The platform has tied up with Integral Ad Science and DoubleVerify to ensure that the ads are seen by potential customers

By exchange4media Staff | Jan 27, 2023 11:26 AM   |   1 min read

Twitter

Twitter has decided to team up with ad verification companies Integral Ad Science and DoubleVerify to enusre that the ads are being seen by real people and not bots, media networks have reported.  

IAS officials were quoted as saying that the move was intended at giving marketers the "confidence to continue to invest in Twitter".

In another move to lure advertisers, Twitter had said end of last year that it would soon bring new controls to allow advertisers to prevent their ads from appearing above or below tweets with certain keywords.

Meanwhile, Elon Musk recently said that Twitter higher-priced subscription models will be completely free of ads.

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Recognition as a separate industry & more: All that creator economy wants from Budget 2023

Well-defined guidelines and relaxations in TDS for micro-influencers are some of the other demands of the industry

By Shantanu David | Jan 27, 2023 8:32 AM   |   5 min read

Aaj Tak becomes world's first news channel to cross 50 million subs on YouTube

The record-breaking milestone comes just three years after the channel crossed 10 million subscribers on the platform

By exchange4media Staff | Jan 25, 2023 9:50 PM   |   2 min read

aaj tak

Earlier this year, Aaj Tak became the first news channel globally to cross 50 million subscribers. Ms. Kalli Purie, Vice Chairperson, India Today Group, met Mr. Gautam Anand, Managing Director of APAC - YouTube, in Singapore to commemorate the special achievement. 
 
“Thank you so much, YouTube! This is just amazing. The team is already planning its way to 100 million so YouTube had better start designing the next button,” Ms Purie quipped to Mr Anand. “Trust has always been the foundation for audience engagement at AajTak. It’s no different with our YouTube channel, but on a much wider scale with hundreds of videos getting uploaded every day. We place equal emphasis on having new audiences discover our channel while ensuring loyal viewers revisit, and invest in figuring out what works on YouTube – whether this is a nuanced understanding of thumbnails or producing hero content frequently.” 
 
Aaj Tak started its digital journey by launching its YouTube channel in the year 2009, and started streaming news live on YouTube for the first time in 2017. The massive popularity gained by the channel subsequently led to its Diamond play button from YouTube in 2019 for crossing 10 million subscribers. Now, just three years later, Aaj Tak is the first news channel to reach 50 million subscribers on YouTube. 
 
“Constant experimentation with new formats like Shorts and investment into our Community page has really paid off, and consistently breaking stories has helped create a very loyal fanbase,” explained Ms. Purie. “Events like the Presidential Elections of 2022, Solar Eclipse and the Cricket World Cup just kept encouraging us to do better and better.”
 
YouTube has been at the forefront of India's mobile revolution, by powering the content and creator ecosystem and by propelling the massive upsurge of video streaming in the world's largest democracy. AajTak has also fast evolved its offering to meet new consumer needs, with the introduction of Shorts, and other constantly emerging insights on LIVE Streams. The channel now has a universe of committed audiences across TV, web, app and social platforms through compelling storytelling that’s tailored to individual platforms.
 

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'India will be one of the most powerful start-up ecosystems in the world'

A panel discussion at the e4m DNPA Digital Media Conference 2023 deliberated on 'Challenges before start-ups in the current digital ecosystem'

By exchange4media Staff | Jan 25, 2023 5:16 PM   |   4 min read

dnpa

India boasts one of the largest start-up ecosystems, enabling the dream of the country becoming a several-million-dollar economy. However, despite government measures to boost the start-ups – in terms of investments and profitability – there are challenges.

The topic of 'Challenges before Start-Ups in current digital ecosystem-Possibilities and Choices' was discussed during a session at the e4m DNPA Digital Media Conference 2023. The panel comprised Ajay Data, MD, Data Group of Industries; Murugavel Janakiraman, CEO, Bharat Matrimony; Ritesh Malik, Director, ADIF & Founder- Plaksha University; Rohan Verma, CEO and Executive Director, Map My India. The session was chaired by Ruhail Amin, Senior Editor, Businessworld & exchange4media.

Speaking about the challenges facing start-ups, Verma said, “Honestly, I think it is very clear that the entrepreneurial talent in India, especially in the digital space, is extremely high. I see no lack of capability. As we have said multiple times, the key challenge has been there because of monopolistic activities that have been suppressing the Indian digital ecosystem. That is the key challenge of our times and I'm pleased that some things are changing with regard to that. 

Malik presented his observations about the challenges that have cropped up in the last few years in the start-up ecosystem: “It took 125 years for Silicon Valley to become what it is. In India, we are leap-frogging the technology era. I think we are going to be one of the most intensely powerful start-up ecosystems and technology ecosystems.

Citing the success of the UPI system in India, he added: "Our mobile payment infrastructure is way ahead of developed nations. Just think of what we will do with the entire Ayushman Bharat digital health mission. We will be one of the most technology-savvy citizen programmes in the world. So the good part is, for the first time, the government is focussing. I think we are standing on a large opportunity. Having said that, technology regulation is important. Unfortunately, it is always falling behind the actual technological innovation. In my opinion, we need to develop a special ministry whose job would be to ensure that another East India Company does not happen again and that Indians are not to be taken for a ride and that our data remains ours; that we are not just a large digital democracy for other large monopoly companies to come, use, generate revenue but also to make sure that our MSME does not get squeezed.”

Singla noted, “Even while we are sitting here, we talk about start-up and start-up ecosystem, but Amar Ujala is a hyper-local newspaper and has a presence in Tier II and Tier III cities. There, education and awareness are still required. From a media perspective, there is a good amount of innovation that is still seen as a challenge. I would say that there is a lot of room for identifying the right business sustainability model.”

Speaking on the broader challenges that need to be addressed in the start-up ecosystem, Data said, “It is extremely important that all entities work together to ensure – whether it is mentoring or education or incubation centres or investments or subsidies or government support – that the frictions between things have to be reduced. And the knowledge about the availability of those resources has to be made very simpler and easy.”

Janakiraman, who joined virtually, spoke from a sectoral standpoint and touched upon the issues that need to be overcome to render a robust start-up ecosystem. He said, “Digital start-ups can significantly contribute to country growth. Today, Indian start-ups are not only limiting themselves to country boundaries but looking at global opportunities. The Internet, 15 years ago, was free and open. Anybody could set up an Internet business or a dotcom; Internet was not controlled by any organisation. Today, the shift has happened, we all know that. The majority of the traffic is happening through mobile apps. So, more than 90 per cent of the traffic happens through the two dominant players – Google and Apple. What are the implications? Today, they are not simply platform providers or access providers; today, they are the platforms as well as players. The challenge is that when the platform becomes a player, their interest changes. Because they are commercial entities and their primary objective is to make money. And because they are both platform and player, they start abusing dominance and that is not good for Indian start-ups nor Indian consumers.”

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Experts discuss competition laws governing digital media in India

At e4m-DNPA Future of Digital Media conference 2023, media industry leaders deliberate on topic, competition laws governing digital media- need for review

By exchange4media Staff | Jan 25, 2023 3:44 PM   |   4 min read

DNPA panel

At e4m-DNPA Future of Digital Media conference, industry experts came together for a panel discussion on ‘competition laws governing digital media- need for review’. The discussion was chaired by Dhanendra Kumar, former chairman of Competition Commission of India. The panelists were Karan Singh Chandhiok- Practice Head-Competition Law- Chandhiok and Mahajan; Pawan Duggal- Head- Pawan Duggal Associates; Parthasarthi Jha; Economic law practice; Avaantika Kakkar, Partner-Competition - Cyril Amarchand Mangaldas; Vaibhav Kakkar, Partner- Saraf and Partners; Abir Roy- co-founder- Sarvada legal, Anil Malhotra, Head- Public & Regulatory Affairs, Zee Entertainment Enterprises Limited. 

Kumar opened the discussion briefing the audience about the competition laws governing digital media in India and how they were help in accelerating the country’s economic growth.

Anil Malhotra joined the conversation, “Certain perspectives change when we move from linear to digital media, and we are governed by certain regulations in linear which are not duplicated in the digital domain. The organised media player expects a fair and transparent revenue share because the organised media invest a lot in people, infrastructure, and building networks.”

Karan Singh Chandhiok added, “We have good laws, but lack enforcement. Law creates a framework that is flexible enough to deal with eventualities. Besides looking at the competition laws, we should look at a broad picture that includes more information. From a business perspective, the three things to keep in mind while catching up and implementing laws are: predictability and certainty in enforcement, regulatory dialogue and unintended consequences of both legislations and enforcement.”

Abir Roy mentioned, “The biggest challenge is the enforcement of a particular law. Enforcement needs to be certain and the regulator needs to be more dynamic.

Joining the discussion, Avaantika Kakkar shared her views on digital media. “When the pandemic began and we did not get newspapers, we started reading content online. We evolved much during the pandemic and we witnessed the scenario of subscription-based news platforms. Digital players are creating opportunities, which result in access which was never explored before.”

On the legal system, she said, “We have a robust legal system, IP laws, and data protection laws, some laws are evolving, and amendments are being introduced. 

Kumar then asked Parthasarthi Jha to share how digital media is evolving and how the internet has obliterated geographical borders. On laws, Parthasarthi said, “the new law must be fabricated and addressed in a manner that must contain some base work.”

Pawal Duggal opined that internet has transformed human beings into data entities. “We all have become global authors, global transmitters, and global broadcasters of data, and in scenarios like such, we have to keep aside the traditional perceptions of media and should start looking at things from the digital media point of view,” he said.

Duggal said that chatgpt which has completely changed the landscape of digital media. “It is a revolutionary kind of algorithm that has shaken the entire world and which is probably going to impact the content being prepared by media organisations as it is going to be more AI-based.”

Talking about competition laws Vaibhav mentioned the mendment introduced by MIB recently on fake news
that talks about giving Press Information Bureau the responsibility to declare what is fake news. He said, “We need independent arbitrators to decide more on free speech.”

He also mentioned that India should not always copy the West while framing and implementing legislation. “India is a completely different country in terms of population count and other things. India needs evidence based laws and not perceptions-based laws,” he opined.

As concluding remarks, Dhanendra requested all the panellists to sum up pointers of the conversation. The key pointers were: sanitise publishers operating out from India to clear the ground for Indian digital players in fair revenue share; study the laws before enforcing to avoid adverse repercussions; law should be evidence-based and it should ensure fairness and reasonability among the market participants; the idea of fairness is more pervasive, it’s not limited to internet and digital media and it is important for marketers to be flexible to get the fair share in the business; the law should be fair and competition law is not the socialisation of private property; India require a dedicated law on digital media; India need to think carefully at the regulations.

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US sues Google, new lawsuit aims to break up tech giant's ad unit

Google contended that the lawsuit by the US DoJ would reverse years of innovation and harm the broader ad sector

By exchange4media Staff | Jan 25, 2023 7:57 AM   |   1 min read

google

Big Tech major Google has been sued by the United States Department of Justice for the second time over anti-competitive practices. This is the US DoJ's second antitrust lawsuit against the tech giant.

Google has been accused of dominating the digital ad market, according to people privy to the matter. The lawsuit will aim to dismantle the tech giant's ad-tech department over its monopoly in the digital ad space.

Reports say that the case will be filed in the federal court before the end of the week.

DoJ chief Jonathan Kanter reportedly said in a press conference that the lawsuit aims to hold Google to account for its "longstanding monopolies in digital advertising technologies that content creators use to sell ads and advertisers use to buy ads."

Google retorted by saying that the lawsuit by DoJ " attempts to pick winners and losers in the highly competitive advertising technology sector."

The tech giant doubled down by stating that the lawsuit is an attempt to "rewrite history at the expense of publishers, advertisers and internet users."

Google also highlighted the ad businesses and practices of its competitors Microsoft, Amazon, Apple, TikTok, Comcast and Disney but the government chose not to go after them.

The tech company is also accused of antitrust practices in India where the Competition Commission of India has slapped heavy penalties against it for abusing its dominance in the Android ecosystem.

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