Digital marketing is no longer a novel idea that is limited to few innovative enterprises. Everyone across the spectrum (including the companies from the small and medium segment) is seriously looking at online presence and is willing to spend for that presence. As per industry estimates, digital ad spend which is already at a high growth pace, would gather further momentum to equal and move beyond TV ad spend in the coming years. In FY22, projections are that the digital ad spend would be near 40% of the total ad spend i.e. near $4Bn (for digital ad spend). Such is the scale of market opportunity for any digital ad solutions company. Add to this, the flurry of launches in the ad-supported OTT streaming space that is likely to take the digital advertising to the next level. For e.g. Amazon has launched an ad-supported, free video streaming service called miniTV. This is currently only available to Indian audiences. It is easy to guess, more would follow. With targeting capabilities and personalization, which TV medium can’t provide, ad-supported streaming services are likely to boost digital advertising by offering innovative services to advertisers.
As it happens with any industry that is new and growing beyond boundaries, industry participants, esp. the incumbents fail (often blinded by their legacy interests) to grab the emerging opportunities leading to new entrants from outside. Digital advertising saw a similar trend in the initial phase. It was not the ad agencies that grabbed the opportunities thrown by boom in digital ad spends. It was tech companies that foresaw the tectonic shift and made an early bet. Of course, tech companies got the head-start because of the need for tech expertise in terms of SEO (Search Engine Optimization), App development and Analytics etc. in the digital universe. But nothing stopped the ad-agencies to acquire or outsource the tech expertise to address the growing digital needs of their incumbent clients.
But, as it turned out, tech companies went only so far. While they were good at SEOs, apps and analytics, they were found wanting when it came to the crucial part of the digital campaign i.e. content. Digital advertisers who realized this shortcoming, started building the content team in-house relying on the digital marketing companies only for the tech expertise and for running the campaign. As a result, it evolved more as a hybrid model, as industry insiders like to say. Because of this limitation, industry grew to become a very fragmented one with large part of the market still addressed by multitude of marginal players, though predominantly from tech. side i.e. the top player controls less than 5% of the market as per industry estimates. For the advertisers, the other pain point was lack of integration between various forms of campaign i.e. digital, traditional media and the on-ground cover. In addition to building skills for content in-house, the advertisers had to swallow the pain of integration by building captive expertise on that.
Because of market’s this stunted evolution, there emerged a huge need for an integrated digital market player who could offer multimedia content across social media platforms with the required tech expertise. It will be an icing-on-the-cake for advertisers, if the same player could also offer on-ground cover as well as reach thro’ traditional media. Advertiser’s wish list did not end here. It will be an added help if the player could also provide reach thro’ captive social media channels that has high followings in terms of views or subscriptions. For large advertisers, if someone with captive platforms can offer such an integrated ad solutions, they will lap it with both hands.
Some companies who have got access to content are sensing a great opportunity here. Take for example, radio companies. With structural headwinds in their mainstay radio business, some of them are being pushed into building content team to tap into the emerging opportunities in the digital advertising solutions. More companies from the media and content business are likely to follow this trend in the coming years. Interesting space to watch out for.