In 2023, the resurgence of FMCG marked a significant trend: Ashwin Padmanabhan

Ashwin Padmanabhan, president- investments, trading and partnerships at GroupM India, talks about the popular trends of 2023 and what to look out for in the new year.

By  Tasmayee Laha RoyDec 14, 2023 9:54 PM
In 2023, the resurgence of FMCG marked a significant trend: Ashwin Padmanabhan
Ashwin Padmanabhan, GroupM, stated, "Although television also demonstrated growth, the digital realm surged at a faster pace, receiving support from both mediums."

India has strengthened its position among the world's top advertising revenue markets. As per the 2023 Global End-of-Year Forecast by GroupM, India climbed to number eight from nine last year, in terms of the largest market for ad revenue in the world.

Ashwin Padmanabhan, president- investments, trading and partnerships at GroupM, India talks to Storyboard18 on what led to this growth, newer advertising opportunities on digital, top trends for 2023, expectations from 2024 and more.

Edited excerpts-

India has strengthened its position among the world's top advertising revenue markets. As per the 2023 Global End-of-Year Forecast by GroupM, India climbed to number eight from nine last year, in terms of the largest market for ad revenue in the world. What according to you contributed to this growth?

India’s ascent in global ad revenue rankings is notable for several reasons. As a market, India outpaced countries like Australia and Canada, positioning itself ahead in the race. The growth was predominantly fuelled by the digital sector, complemented by a steady contribution from TV. Although television also demonstrated growth, the digital realm surged at a faster pace, receiving support from both mediums.

Despite the challenges the overall ad market in India exhibited commendable growth at about 11% in 2023. In markets like Australia and Canada with 70% of ad spends being digital, the lower growth rate of digital has impacted these markets. Therefore, India's rise in the rankings is not solely attributed to its growth but is also a consequence of slower growth in other markets, leading to their decline.

The GroupM This Year Next Year 2023 forecast suggested a significant increase in digital's share of AdEx. How has this shift impacted the strategies and priorities of advertisers in India, particularly concerning their allocation of advertising budgets between digital and traditional TV?

The allocation of advertising budgets in India exhibits significant variability based on the advertiser's category. For FMCG brands, a substantial portion, around 60 percent and more, is still directed towards TV advertising. TV's mass reach, especially among the women audience, remains unparalleled. Digital, however, faces challenges in reaching women effectively, posing a constraint unique to the Indian market. The constraint is not mirrored in other parts of the world. General entertainment on TV, particularly, continues to excel in delivering targeted messages to women.

Even in FMCG, we've observed positive responses on target segments, predominantly women, further emphasising TV's effectiveness. The allocation mix is highly contextual, depending on the specific category and business model. For B2C brands with a strong online presence, the digital allocation is more pronounced, especially in performance-oriented advertising. The growth of digital is driven by brands exploring new channels, particularly in untapped markets where television penetration is limited, such as regional areas and the heartland. As an agency, our role involves advising clients on optimising this mix to achieve the most impactful reach at the lowest cost, tailored to their unique audiences and business goals.

Talking of digital ad space, we have clearly moved on from just Google and Meta. While they continue to dominate the digital space, there are a lot of new entrants. Help us understand a little about these opportunities?

In the current digital landscape, three major ecosystems dominate: Google, Meta, and Amazon. Each presents a scale in providing solutions and attracting advertisers. In India, the challenge for platforms isn't solely about having audiences but revolves around the uniqueness of their audiences or the insights derived from them. Platforms like payment apps such as Paytm or PhonePe offer distinctive signals about audiences, enabling engagement in ways not possible on other platforms. This shifts the focus from when to reach an audience to the context and unique insights surrounding that interaction. For example, Spotify capitalises on the context of when people listen to music, often through headphones and engaged in various activities. This approach identifies specific times in a person's day when they are receptive and devoid of distractions, enhancing brand engagement. The evolving advertising landscape demands a nuanced understanding of various digital realms like audio, video, and commerce, urging a departure from a broad categorisation of digital. A deeper exploration of each segment is essential for strategic investment and advising clients on effective allocations.

What are the type of brands that would be interested in these advertising marketplaces?

In our quest for product engagement, our objectives span creating memorable moments, reinforcing messaging from various channels, assisting consumers in decision-making, and facilitating actual purchases, especially for online brands. Collaborating with platforms involves understanding their strengths and aligning them with specific brand objectives. Whether it's brand building, generating leads and conversions, fostering deeper engagement, or enhancing consideration and preference, the platform's strength determines its purpose. For instance, Uber's advertising platform offers unique opportunities during the ride-booking process and the journey itself. Beyond perceiving it as mere advertising real estate, the key lies in leveraging platform insights to target effectively, employing dynamic creatives, and ensuring relevance to the user's context during the ride. This holistic approach transforms each platform into a dynamic space informed by audience insights and platform capabilities, tailored to meet specific brand use cases. This nuanced planning approach is integral to our collaboration with brands.

With the IPL and World Cup behind us, what are the next big IP marketers interested in?

In the upcoming year, our advertising focus again revolves around significant events like the Indian Premier League (IPL), which is anticipated to commence earlier than usual. Both Viacom and Disney, the broadcasters, are proactively engaging potential advertisers. Beyond IPL, the quarter also offers opportunities tied to festivals such as Sankranti and Pongal, allowing advertisers to connect with specific audiences in different states.

Following IPL, the T20 World Cup in June, though traditionally a low period for advertising, holds promise, especially for online and direct-to-consumer brands. The gaming and online brands categories are expected to invest significantly in the T20 World Cup. Looking ahead to the second half of 2024, a return to regular festive cycles is anticipated, building on the baseline set in 2023. With the stability in consumption patterns, 2023 provides a solid foundation, and we aim for positive growth in advertising expenses from 2023 to 2024, foreseeing a more stable and growth-oriented advertising landscape.

Will the Lok Sabha elections also impact AdEx in 2024?

In 2024, the dynamics of the election season are poised to significantly impact advertising. Political advertising will undoubtedly be a driving force for the news category, attracting substantial investments from brands seeking to target news audiences. Beyond the advertising realm, the elections are expected to energise the people on the ground. The optimism is that the increased spending on advertising and communication during this period will also stimulate consumption.

What are the top trends in the ad space in 2023? What is the next big thing to look out for in 2024?

In 2023, the resurgence of FMCG marked a significant trend, with many clients and brands making a robust return to advertising, even surpassing previous investment levels. This served as a cushion for categories that were notably absent, particularly in the online space. Towards the end of 2023, there was a noticeable comeback from online and internet brands, albeit not at the same spending scale as in 2021 and 2022. These brands, having streamlined their operations, improved cash flows, and established stable business models, are gradually re-entering the advertising landscape. As we step into 2024, it's encouraging to anticipate the reactivation of internet brands, contributing to the active advertiser list, albeit with a different advertising approach than before.

Looking ahead to 2024, specific trends are expected to gain prominence. There will likely be a continued and heightened focus on performance marketing, commerce, and retail media.

Additionally, leveraging influencers and establishing long-term partnerships with them will be a key area of investment, with efforts directed towards creating structured frameworks for influencer collaborations. While the digital landscape continues to evolve, television advertising is anticipated to maintain stability, with the prospect of growth as we progress through 2024.

First Published on Dec 14, 2023 8:50 AM

More from Storyboard18

Quantum Brief

Paytm partners with Skyscanner, Google Flights, Wego, for global travel partnerships, solutions

Paytm partners with Skyscanner, Google Flights, Wego, for global travel partnerships, solutions

Quantum Brief

Oracle to exit advertising business says CEO Safra Catz

Oracle to exit advertising business says CEO Safra Catz

Quantum Brief

Infosys ranked as 74th most valuable brand in the world: Kantar report

Infosys ranked as 74th most valuable brand in the world: Kantar report

Quantum Brief

Fin+InsureTech startup Finsall raises Rs. 15 Crore in bridge round led by Unicorn India Ventures and Seafund

Fin+InsureTech startup Finsall raises Rs. 15 Crore in bridge round led by Unicorn India Ventures and Seafund

Quantum Brief

NCLT approves Air India - Vistara merger

NCLT approves Air India - Vistara merger

Quantum Brief

Cannes Lions 2024: Harpic, Lay's and ESAF Small Finance Bank pick shortlists in Glass Lions category

Cannes Lions 2024: Harpic, Lay's and ESAF Small Finance Bank pick shortlists in Glass Lions category

Quantum Brief

Doordarshan to telecast T20 World Cup matches

Doordarshan to telecast T20 World Cup matches

Quantum Brief

Ola Electric to layoff 400-500 employees ahead of upcoming IPO

Ola Electric to layoff 400-500 employees ahead of upcoming IPO