What will digital advertising in 2023 look like?

A report by Tokyo-based ad and marketing agency Dentsu has revealed that India’s ad market is estimated to touch $12.6 billion in 2023. According to multiple industry reports, digital remains a key driver in procuring this growth. GroupM’s “This Year Next Year” 2022 global report projected the Indian digital ad spend to amount to nearly 50 per cent share in the total AdEx, this year.

As per annual data provided by Google India and Facebook India, the two tech giants accumulated Rs 41,115 crore in 2022 in online ads. The number is far higher than the estimates predicted by some industry forecasts in early 2022. The data is a clear indication of a healthy and sustainable future for the digital marketing, with sufficient room for advertising. But, which brands are leveraging this foretold and highly anticipated growth spurt?

Last year, we saw a flurry of digital ad campaigns by fintech brands such as Cred and GooglePay, or food delivery aggregators such as Zomato and Swiggy. Social media platforms have been riddled with quirky and engaging content from brands that want to make their presence felt. The statistics show that eCommerce is driving the investment in search, video and social markets. 

But, with 2023 underway, are we going to see new categories of brands that will ramp up their digital presence? If so, what are the platforms that these brands will primarily focus on?

Here is what industry experts have to say:

Edited excerpts:

Nitin Sabharwal, managing partner, iProspect India

The local retail category is likely to scale up its digital spending as they have seen the benefits of reaching out to localised audiences available on digital media. With localised regional content and advertising communication, digital will drive the higher value of captive audience for the retailers. This is also to do with the fact that India is moving, at a fast pace, on 5G adoption. The Open Network for Digital Commerce (ONDC) ecosystem of enabling localised sellers and localised delivery structure is likely to gain traction, enabling retailers to move advertising to digital. 

An interesting category that is slowly and steadily gaining traction is the gaming culture ecosystem. This area will gain ground this year.

Traditional digital platforms like Google Search, Meta, YouTube and other social media platforms will get their due share of the advertising spends. The entire content creator ecosystem looks like it is exploding with advertisers, who are focusing on them for traction and direct audience connection. The content creator economy will see a push in spending.

OTT and connected television will also see growth as content consumption on these platforms is ever-increasing. With the programmatic ecosystem becoming more audience data-centric they too will attract marketing dollars in their kitty. Clients are prioritising owning their first-party audience data, and therefore, platforms that enable them are more likely to be invested in.

Some interesting innovations from Meta’s integration with WhatsApp, and Google also focusing on their ‘my business solutions’, will garner attention from advertisers and are likely to be invested in.

The marketplace ecosystem of Amazon/ Flipkart/Myntra is also innovating to take some pieces of these advertising spends. The recent ad spending data shows that all the marketplaces are gaining a share of the total advertising spends across digital and traditional media. Amazon for sure will lead the way among eCommerce platforms, with brands trying to talk to audiences that are already in the awareness, consideration, or action funnel on these platforms.

Mithun Mukherjee, ECD, Kinnect

Over the last couple of years, digital has seen a lot of brands from diverse categories, take up the mantle of advertising online. With brands like CRED and Swiggy, setting the stage for an interesting conversation, we can expect more diverse categories of products enter into the fray.

I foresee 2023 as a year where personal development products will see increased ad spends on digital. Brands like Fittr, Fast and Up, and Muscle Blaze are a few players with interesting campaigns. Another category that will see increased presence is home décor. If the ASAHI India Glass campaign and Jaquar Electrical Fittings campaigns are anything to go by, we can expect some interesting things to transpire this year.

What usually gets brands noticed online, is storytelling and disruption. If brands are not doing anything disruptive (ITASA) or creating visually arresting ads (CRED), then connecting with the consumers can often get difficult.

Instagram is often employed to connect with audiences. Social media apps like Moj and Josh that target ‘Bharat’, are also becoming strong platforms of engagement for brands to connect with their audiences. Meta created a bit of a noise in the beginning of 2022, but soon, things fizzled out. There may be a chance of it catching some attention in the latter half of 2023, as a platform of engagement.

Digital advertising can help to drive more than just intent for the consumer. Besides helping achieve awareness and consideration, brands are increasingly using digital to achieve the rest of the funnel. If a brand is not using digital for performance marketing, it is losing out on a big part of what digital can help achieve for its business.

Besides, connecting with regional audiences continues to become more relevant every day. It is something that can be achieved by driving engagement on regional social networking and other interest-based apps.

Brands that keep their ear to the proverbial digital ground, will gain the most from digital advertising in 2023. Digital trends and conversations have always been evolving, and the speed of the evolution only seems to be increasing manifold with time.

If 2022 was the ‘Year of NFT and Meta’, 2023 will probably be the ‘Year of AI’ and its far reaching implications. Only time will tell how they’d impact advertising. But the smartest digital brands will definitely be those that will be agile enough to adapt to the latest trends, and reinvent their digital marketing strategies constantly and consistently.

Shradha Agarwal, co-founder and CEO, Grapes

We’re living in the digital age. Almost all brands are enthusiastic about ramping up their digital presence. D2C and FMCG brands are likely to enhance their digital presence for effective interaction with their target audience.

Moreover, new tech brands like CRED under fintech, and even zillennial brands like boAt and Noise, are amplifying their presence in the digital space. It is also interesting to see that social networking brands such as Discord and Boki Boki, are ramping up their digital presence.

The sole purpose of ramping up digital presence, is to reach out to the most number of people. Hence, gauging by the popularity of Instagram, Facebook and YouTube, it is very likely that brands will harness the benefits of these platforms to create effective brand awareness.

E-commerce platforms are also gaining a lot of traction. It has been observed that Amazon and Flipkart are emerging as new digital ad platforms. Brands are continuously broadening their horizons to make their presence felt in the digital space. They are even leveraging LinkedIn to communicate with potential consumers.

Before allocating the budget for digital ads, it is important to understand that the digital market is quite volatile. Strategically devising a plan of action beforehand, can help brands decipher the success of the ad. They can even opt for performance marketing to get a better insight into the RoI of a particular campaign.

Moving forward, brands can integrate artificial intelligence and machine learning to automate their operations, and consequently optimise their processes to the fullest. In the entire planning, the essence of smart content opportunities, should not be overlooked, as they can help in the curation of impactful ads. Instead of going for 14-15 campaigns a year, focussing on five quality campaigns, will instil better brand recall value among audiences.

Lloyd Mathias, a business strategist and angel investor

Healthcare and fintech are the potential categories of brands that could up their digital presence. Digital presence is currently dominated by brands that are traditionally digital - like e-commerce, food deliveries, etc. But going forward, we will see a lot more action in healthcare.

Fintech brands are also likely to up their digital presence. We’ve seen a lot of people foray into stocks, thanks to platforms like Zerodha and Upstox. We’re also seeing banks slowly get their act together. There is a realisation that their core customers are being wooed by fintech platforms.

While Google and Meta may be the digital platforms that brands primarily go to for when it comes to advertising, YouTube appears to have gained a lot of traction. Being the largest video platform in India, YouTube has a good share of ad spends from brands. New-age short video platforms such as Moj, Mitro and Chingari, have also witnessed some traction.

Brands will have to invest in deep consumer insights. Apple has already taken off third-party cookies. Brands need to invest in creating their own primary data sources. First-party data could be crucial in identifying potential customers, and gathering their insights.