While the new year started off with a new round of layoffs by tech giants and thousands of people losing their jobs, another casualty of geopolitical tensions, economic slowdown and inflation has been the advertising industry.

According to GroupM, in a report from the end of 2023, globally ad spending growth is likely to falter in 2024 to 5.3%. Similarly, Magna reported that the growth rate of global ad spending in 2024 will fall to 5.8% from 2023’s approximated 6.5%. However, in this fairly gloomy forecast, India continues to be an outlier, as the world and its conglomerates turn their gaze, and hopefully their funds, to the fastest growing major economy. And much of it is on the back of upstart startups and newly emerginghomegrown brands.

Brand Bharat's Big Chance 

Rohan Bhansali, Chairman and Co-founder, GOZOOP Group, observes that the world order is changing in the next two decades. “Entrepreneurship in India will rise. Many brands and businesses will be disrupted by young entrepreneurs and new-age SMBs. We want to be their allies while they pursue their ambitions.”

Rohan Chincholi – Managing Partner, Digital, Havas Media India, agrees that small and medium enterprises (SMEs) are playing a pivotal role in driving the Indian economy. “The influence of SMBs is poised to contribute significantly to the growth of e-commerce, driven by a focus on return on investment (ROI). This is underscored by industry findings indicating that approximately 62% of Indian SMEs leverage websites, online stores, or e-commerce platforms for their business operations signifying the need for increased digital advertising,” he says.

Global heavyweightslike Amazon, Google, Meta and others are seeing their ad revenues increasingly depending on Indian companies, both big and small, with the latter category packing a punch that both belies their size as well as indicates their intentions.

Abbhishek Chadha, EVP – North & East, Interactive Avenues (digital arm of IPG Mediabrands India) says that overall, growth is seen as plateauing due to the overall AdEx not moving. “The last 2-3 years have faced AdEx stagnation because of global economic slowdowns; advertising spends have been discretionary. While AdEx is one indicator, another strong indicator is the digital adoption and transformations brands and companies are undertaking. High involvement categories like BFSI and Auto are increasingly becoming digital-first brands, re-writing consumer journeys and making digital only products,” he notes.

In this still forming future, experts say that startups/SMBs are set to revolutionize the advertising landscape, injecting innovation and agility into the ecosystem. With an increasing focus on digital experiences, aided and abetted by AI technologies, digital is clearly the future here already. Andagencies are readyfor it.

Digital First 

Agreeing that many of the SMBs are digital first in thinking and execution, Chincholi observes, “Focused on disruptive technologies like AI, they enhance targeting precision and measurement accuracy, diversifying platforms beyond traditional mediums. Startups distinguish themselves in the advertising realm by adopting a customer-centric and ROI-driven approach. Their strategies are intricately tied to return on investment, emphasizing cost-effectiveness and efficiency. Current startups are the potential unicorns of tomorrow, evolving into the legacy brands of the future.”

Prashant Deorah, CEO, Puretech Digital, says this phenomenon is something they've been closely observing in the digital advertising space. And despite the broader market slowdown, SMBs are emerging as pivotal drivers of digital ad spends in India.

“Indeed, SMBs are not just driving digital ad spends, they're revolutionizing it. Their approach is multifaceted - from embracing new platforms to leveraging data-driven strategies. As the market evolves, SMBs' agility and willingness to adapt are making them key players in sustaining the digital advertising ecosystem in these challenging times,” he says.

“The rise of e-commerce has led to the emergence of digital-only brands across B2C landscapes, notably in the CPG and retail categories. The growth potential for any B2C brand lies in unlocking younger audiences, where commerce and social play an enormous role. Even in B2B SMBs, their first port of any outreach is digital. While ad spends may not be the right indicator, digital adoption in product and experience will testify to their growth in the medium,” concludes Chadha.

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