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Category: Adskate

  • Recession and effects on the digital marketing ecosystem – Primex News Network

    Recession and effects on the digital marketing ecosystem – Primex News Network

    Akaash Ramakrishnan,  Co- Founder & COO, AdSkate

    July 7: The global economy is in entering into a recession state. Recently the S&P 500, the stock market index for the top 500 performing companies in the United States, confirmed that the market is in a bear market state. The United States is currently the world’s largest economy and they are going to try the nation from slipping into a recession state. To do this the United States Federal Reserve is going to push for higher interest rates which would potentially lead different world economies into a state of pandemonium. The market has fallen for the past week straight leading to a frenzy. The S&P plummet by 21.8%. Experts are expecting people’s purchasing power to diminish over time. All of this sounds grim for the digital marketing industry.

    Let us take a deeper look into how the looming global recession is going to potentially affect the digital advertising ecosystem. During the peak of the pandemic, ad-buying had increased by 38% compared to the previous year (2019) but in 2022 a deceleration in terms of ad buying is visible. A massive reason for the deceleration in advertising ad spend is because China accounts for 20% of ad spend and the ongoing war in Ukraine has had an adverse effect too. According to a recent statistic by GroupM e-commerce sales grew only by 6.7% in 2022 compared to the previous years. This has been the slowest growth rate noticed in the e-commerce industry since 2020. Additionally, GroupM predicted that consumer price inflation is going to soar upwards of 7%.

    Despite these turn of events, the large agencies Zenith, MAGNA, and GroupM recently released their mid-year reports and all of them have noted an increase in their advertising spend for 2022. This provides hope to brands and advertisers of all sizes. Zenith is predicting a $33 billion increase in advertising spend across different digital platforms. Online advertising on OTT (Over-the-top) and CTV (Connected TV) is a big growth factor for a lot of agencies and brands. It is predicted that global advertising expenditure on online video advertising is to rise from $62 billion to $94 billion by 2024. The advertising industry has severely decreased its spending on TV ads this is because the younger generation is engaging more with different OTT platforms. Concurrently, advertisers find it easier to measure the success of campaigns on CTV and OTT compared to traditional TV.

    Another space where advertising expenditure is set to increase is podcasting and online radio. It has been a market that has not been completely tapped into yet. MAGNA, the ad giant, claims it will be increasing its spending by 5.7% in 2022 on audio advertising. Additionally, MAGNA is forecasting its advertising revenue will grow by 9.2% in 2022. Along with CTV and OTT, out-of-home advertising is expected to grow as people are beginning to travel and spend more. In other words, brands are cramming to get their ads up on different types of OOH ads.

    In India, the advertising budgets for 2022-2023 are said to increase by 20% despite inflation being around the corner. Companies like Maruti Suzuki are said to increase their advertising budgets through the remainder of the year. Large FMCG companies are increasing their pricing and passing on the cost to the consumers ensuring they are protected at all times. A number of companies in India would want to ensure that they can keep their expenses low during the inflation period.

    A different aspect to also keep in mind is that all the major advertising agencies, trading desks, and global brands are at a critical junction given that Google is set to depreciate its cookie-based targeting by 2023. Audience-based targeting tools are going to be sunset and brands are on the hunt for other alternatives. Budget allocations need to be made for market testing and product fit to ensure that it will yield the best results. With the impending inflation, advertisers need to ensure that they are able to safely carry out their day-to-day operations as per normal.

    Only time will tell whether brands, advertisers, and ad tech companies are able to make it through the inflation period unhinged.

    By  Akaash Ramakrishnan, Co-Founder & COO, AdSkate

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  • Understanding the impact of Cookieless targeting in digital advertising – Primex News Network

    Understanding the impact of Cookieless targeting in digital advertising – Primex News Network

    Mr. Akaash Ramakrishnan, Co-Founder and COO, Adskate

    New Delhi (India), June 9: The pandemic forced people to work from home and created a work-life culture that is now considered a norm. Additionally, people began consuming more video content through the pandemic. In 2020, it was estimated that 9 out of 10 viewers wanted to view more video ads from brands and businesses. Moving on into 2022, it is predicted that an average person will be spending 100 minutes watching online content per day. These data points are indicative of the fact that advertisers and brands have to be swift in deploying online ads across different domains, streaming platforms, and apps.

    A customer’s need to consume online content exponentially increased during the pandemic. It was estimated that 1.1 billion people worldwide were subscribed to a video streaming platform. In other words, this sort of exponential growth rate has led video streaming platforms to think of creative ways to advertise to potential customers.

    Additionally, advertisers have to ensure that the ads that they are deploying are personalized and based on what the viewers are consuming at that moment. This accelerated growth has given rise to OTT marketing.  CTV and OTT platforms are using their platforms to promote products and services. As CTV and OTT platforms are used more programmatically, it will enable advertisers to focus on specific demographics, lifestyles, geography, and income to deliver ads that are tailored to a consumer’s taste and expectations.

    According to e-Marketer, In 2020, CTV ad spending reached $14.4bn USD, and this was close to a 60% increase compared to the previous year. For brands and advertisers, CTV and OTT realm has proven to be a new medium and method to reach out to their audience in a personalized manner. Additionally, OTT/CTV marketing provides the capability of advertising on a content level, and the users do not have to be bound by geographical restrictions. For example, Top Gun: Maverick can be advertised in India on HotStar and, at the same time, be advertised in the US on Amazon Prime. This enables the advertiser to have maximum reach while having an optimal ad spend.

    Since TV viewing consumption has shot up tremendously, the upfront cost for CTV ad spending has grown quickly too. By the end of 2022, the advertising ad spends for CTV/OTT will be hovering at the $5 billion mark.

    CTV and OTT advertising is the best method to increase brand awareness. Recently, Kantar produced a research study that stated that ad spending on CTV and OTT for political campaigns in 2022 had reached $1.2 billion. Advertisers are making it a point to ensure that their messaging touches different screens within a single household.  This tremendous spike in ad spending is changing the way marketers are planning, purchasing, and executing campaigns in the TV world.  But with this tremendous growth, we are noticing ad fraud increasing.

    Recently, a report was published by the IAB (Interactive Advertising Bureau) that 63% of advertisers buy ad inventory directly from publishers, and 61% use programmatic exchanges to make buys. Unfortunately, purchases made through a programmatic marketplace have ad fraud associated with it. Advertisers are beginning to allocate budgets for ad fraud too. This is beginning to inflate advertising budgets.  Many different measurability and viewability companies in the market space are trying to combat this problem. Measurability and viewability companies are trying to work with premium publishers to study where every single impression has been served and try to weed out the impressions that do not match the specific KPIs that the advertisers have set in place. The methodologies applied currently are a stop-gap to a bigger problem of how to prevent ad fraud.

    With the growth of CTV and OTT, it is imperative that the advertising ecosystem build a robust system to protect itself from outliers. CTV and OTT advertising is here to stay, and advertisers have to ensure that they are savvy and agile to keep up with the growing demands of their audience.