Decoding key trends that will shape the Indian Adtech space in 2023

Just when marketers prepared to strengthen their foothold in the market after being severely hit by interminable waves of the Covid-19 pandemic, the prevalence of digital adoption cropped up to steal the spotlight. With massive reliance on digital across all industries, especially in the marketing and advertising sector, 2022 turned out to be a rollercoaster ride for both brands and agencies; and adtech emerged as one of the most talked about aspects of the advertising industry in the year 2022.

Realizing the charm of the adtech space, organizations across industries are restrategizing their digital advertising game. And as we step into a new year, it is apparent that the advertising industry will witness new trends swinging in and unlocking troves of value for brands to flourish.

“In the year 2022, we witnessed many new trends and advancements in the AdTech space which will shape the year 2023. Amidst the global rip currents and other unprecedented moments that 2023 will bring, the advertising industry must be more agile, responsive, and relevant than ever before,” shares Tejinder Gill, General Manager, The Trade Desk. He further added, “As the advertising industry sees more consolidation of new advertising mediums, 2023 will witness more ad investments in OTT, CTV, music streaming through the power of programmatic.”

As indicated by Tejinder, the year 2023 holds massive prospects for the adtech industry.

AI/ML to drive personalized messaging and targeting

With rapid technological advancements taking all industries by storm, today brands and advertisers are contemplating a solution to recognize consumption patterns to increase conversions. That’s where an AI/ML approach can help for better targeting and raise the overall customer experience.

“Advertisers will use AI to build engaging ad iterations and segment their customers using ML algorithms that recognize patterns in consumer behavior and determine which ad iterations lead to maximum conversions,” shares Siddharth Dabhade, Managing Director, MiQ.

Data-Driven Programmatic

As brands aim to drive growth and brand loyalty, data will become the sole fuel for advertisers in the year 2023. Stressing the need for data-driven programmatic advertising, Siddharth Dabhade further shares, “In a complex digital landscape, marketers will need to take a data-driven and programmatic approach to better understand what fuels their advertising outcomes and deliver contextually relevant content to drive growth and brand loyalty.”

Increase in demand for first-party data

As put across by Siddharth, in the year 2023, advertisers will aim at leveraging AI/ML approach to maximize conversions. This will significantly increase the demand for first-party data for better targeting and optimizing campaigns.

Pointing how brands will embrace first-party data in 2023, Prabhvir Sahmey, Senior Director, Samsung Ads India says “Increasingly enriching datasets via access to first-party data will be one of the ways brands will adapt to reach the right audiences and optimize campaigns. They are already beginning to bolster strategies with investment in more comprehensive targeting capabilities and will continue to evolve in this space.”

Prabhvir further shares, “Gathering a more holistic understanding of viewer preferences will be a key trend in 2023. Whether it is to reach audiences who have been exposed to a competitor’s ads or to maximize reach across streamers, gamers, and linear viewers, the use of first-party data from CTV will give marketers in India these capabilities.”

However, as we proceed towards a digital marketplace that will be governed by data, it is a fact that privacy concerns will also rise.

To further emphasize the need for customer data platforms and first-party data, Nikhil Kumar, Vice President – IN & SEA, MediaSmart shares, “More and more brands are realizing the value of building their own CDPs/1P Data to create a more personalized experience along with navigating the challenges of data privacy concerns. This trend will only grow further.”

Explaining how marketers are experimenting with data on the supply side, Amit Yadav, Country Manager, South Asia at PubMatic shares, ”While targeting has traditionally been on the demand side, this is now changing. This is partly due to new privacy regulations, the consolidation of technologies, and the growth of the private marketplace (PMP). Today, media buyers are taking their data to the supply side and experimenting with multiple supply-side targeting methods (for example, ID targeting, contextual targeting, and third-party data targeting). This ensures greater efficiency and a better overview of the campaign planning. With publishers leveraging their data and investing in more complete data strategies, media buyers can work more closely with supply-side partners to get a more complete picture of their audience.”

Forecasting and strategic budget planning will make a comeback

As the fear of COVID-19 pandemic lifts off, brands have started laying stress on strategic planning and budgets.

Reinstating the need for strategic planning and explaining how can marketers determine the impact of their campaigns, Reggie Singh, Director Partnerships, Americas, Adjust shares, “This year we’re going to see companies focus much more on forecasting and strategic budget planning than we have in the past. Today’s marketers have been so focused on historical numbers, such as user acquisition, spending, and return on ad spend (ROAS), and less focus has been placed on strategy and planning. Coming out of the variability of the pandemic years, coupled with the uncertain economic environment, over the next few years, we will see the comeback of forecasting through media mix modeling (MMM) as a way to determine the impact of marketing tactics on a business objective, alongside data-driven attribution. MMM is a great way to measure the impact of non-traditional media channels, such as connected TV, podcasts, and digital out-of-home.”

Relationship between Consumer, Digital Content and Advertising

“With significant macroeconomic changes today, the dynamic relationships between consumers, digital content, and advertising will inform these trends. In a recent DoubleVerify report, we found that the increase in digital content consumption as well as post-pandemic online shopping are higher in India than in any other region we reported on globally. At the same time, with increasing attention fragmentation, media efficacy will be dependent on the type of platforms used and speed in capturing consumer attention. Trust and shared values foster loyalty, but consumers are increasingly concerned about mis-/disinformation online. Advertisers will need to consider how they can protect their brand reputations, while achieving scale, to deliver on their KPIs. Consistent measurement standards are critical to understanding the efficiency and effectiveness of digital media campaigns. On top of this, advertisers will need to ensure they are equipped with the right resources and technologies to measure consumer attention,” shares Nachiket Deole, Head Of Sales, India at DoubleVerify.

The rise of the AVOD model and Contextual Advertising

The year 2023 will also witness an increase in the adoption of the AVOD model of advertising. Observing how Indian consumers are rapidly opting for free content which is available on demand, brands are shifting their focus to the AVOD model.

Highlighting how AVOD will emerge as a go-to choice for brands, Gavin Buxton, Managing Director, Asia at Magnite states, “India has been a pioneer market globally in the early enablement and adoption of ad-supported tiers for viewers, which we are now seeing replicated globally by the global streaming players, indicating that the AVOD model is the way forward. I expect it will be increasingly embraced by more content owners in the coming year, particularly as usage of SSAI increases and leads to a greater number of ad slots per hour, generating more scale, and more FAST channels are introduced to the market.”

Another form of advertising which will see massive traction this year is Contextual Advertising. Saurabh Khattar, Country Manager, Integral Ad Science shares, “As contextual targeting strategies gain prominence, marketers will capitalize upon the significant opportunity to connect with consumers across the ecosystem in a more brand-suitable way. Contextual targeting helps marketers advertise alongside relevant content as well as avoid content that can pose a risk to their brand/ campaign.”

To give a deeper understanding of how contextual advertising can help in targeting the right audience, Saurabh Khattar further shares, “Taking contextual targeting up a notch are technologies such as semantic intelligence and sentiment/ emotional classification that dive deeper into contextual targeting since they consider the entire content environment, including context, sentiment, and emotion. Such media quality solutions comprehend content the way a human would, to ensure that the message reaches the consumers who will connect the most with your brand. Marketers who want unprecedented precision for targeting content that is contextually relevant for a given brand or campaign to increase recognition, engagement, and favourability are likely to explore these options.”

The fundamental shift in the mindset of advertisers

With everything available with a click, consumers’ content consumption patterns and preferences of content keep on changing.

To explain how can brands optimize their campaigns on publishers’ platforms, Nikhil Kumar shares, “From where to reach users to, whom to reach (targeting audiences vs. targeting placements). This will mean that brands need to focus and work with platforms that offer relevant audience reach across publishers/apps as opposed to having the mindset that ‘my consumer is only present on X, Y or Z publisher’ since consumers are rapidly evolving and consuming content across platforms as per multiple studies.”

Adtech blurring lines between Digital and Traditional

Personalization has become a key factor to increase brand recall and brand loyalty. With an aim to provide a hyper-personalized experience, advertisers are significantly focusing on integrating the traditional and digital experiences of their targeted audience.

Nikhil Kumar shares, “As consumer behavior evolves into multi-screen content consumption, it will become important for brands to connect user journeys across screens to enable seamless brand storytelling. Brands will increasingly realize the importance of mapping the offline behavior of users and integrating their exposure to emerging technologies like DOOH in the larger marketing mix.”

The adtech space will see diversified spending this year across both digital and traditional. Further sharing his views on the necessity of applying digital thinking to linear campaigns, Prabhvir Sahmey says, “Advertisers will also adopt a varied approach to media spending this year by busting silos between digital and TV teams. For digital thinking to be applied to linear campaigns and vice versa, those barriers will be broken down to apply the most efficient communication for a new approach to TV environments.”

Transparency is key

Home sweet home viewing: The exponential growth of CTV in India

Transparency has become a key concern for brands in the adtech space. Due to a lack of transparency, buyers end up paying more for the inventory than what it costs. Moreover, fraudsters sneak into the supply chain to fabricate impressions. To iterate how can the adoption of programmatic-based solution help in ensuring transparency, Saurabh Khattar says, “As the adoption of programmatic-based solutions in ad tech continues to grow year-on-year, in 2023 we will see industry-wide adoption of transparency practices. Lack of transparency in the programmatic ecosystem and supply path continues to be a crucial challenge for advertisers. Impacted by economic headwinds, marketers will opt for programmatic solutions as they look to deliver efficiency and value for every ad spend from buying programmatic inventory to Supply Path Optimisation.”

To further explain how the adtech space is ensuring transparency Amit Yadav shares, “With the help of Supply Path Optimization (SPO), the sector has taken major steps to make the supply chain more transparent and more balanced. For media buyers, working more closely with their supply partners makes transactions more efficient. When setting up an SPO arrangement, media buyers consider a number of factors. While economics are important, the degree of innovation is a crucial factor – for example, a tailor-made technological solution or access to data that offers added value. This allows media buyers to think about how to efficiently source inventory for their clients while simultaneously creating an environment in which publishers can maximize the value of their content and audiences.”

The explosive growth of CTV

Undoubtedly the adtech space is going to thrive in the year 2023 with brands, markets, and advertisers rapidly shifting their focus to digital. Another major trend that will rule the year 2023 is Connected TV (CTV) advertising. As more and more people are cutting the cord and opting for streaming services over traditional cable, the future of CTV looks bright. In the coming years, we can expect to see an increasing number of marketers experimenting with CTV advertising, as the platform becomes equipped with more advanced features and capabilities.

Gavin Buxton, Managing Director, Asia at Magnite shares, “Ushered in by the pandemic as well as lower costs, CTV has experienced rapid adoption in India. According to projections, there will be 40 million monthly active CTV users in India by 2025, driven by the increasing affordability and accessibility of Smart TVs and increased set-top box adoption. As supported by our research, consumers are receptive to advertising in exchange for free streaming video. They enjoy the flexibility and control that streaming provides, along with access to original programming, favorite shows, and the choice to watch locally produced or international content.”

As highlighted by Gavin, the CTV space has experienced rapid adoption in India. The significant reason for this growth is the access to the internet which gave consumers access to exploring newer channels to stream content. Agreeing on how CTV is going to remain the fastest growing channel for advertisers to reach their target audience, Tejinder Gill, General Manager, The Trade Desk says, “There has been a paradigm shift in the way consumers are spending their time. Outside of the well-known walled gardens, consumers have been exploring the diverse channels on the open internet – from CTV, and OTT to music streaming to mobile apps. It is imperative for marketers to find the right media strategies to reach and engage consumers on the open internet. In particular, CTV will remain one of the fastest-growing ad channels in 2023. With more savvy marketers adopting data-driven advertising strategies on the open internet, they will be looking to leverage the power of CTV. CTV advertising allows them to understand what’s working, in different markets, in real-time. This will in turn enable them to adapt campaigns on the fly, based on changing market conditions they will face in the new year.”

The CTV space is undoubtedly going to emerge as one of the biggest opportunities for buyers in the coming years. Siddharth Dabhade, Managing Director, MiQ shares, “CTV is the biggest opportunity for brands. With the explosion in OTT content, more households cutting the cord, growing acceptance of ad-supported streaming, and Netflix entry in the market, CTV ads would see more media spending and advertisers experiment with new ad formats.”

To elaborate on how CTV is going to be the biggest opportunity for brands Siddharth further highlights:

Advertisers would need unified access to ad inventory and optimize their reach and frequency across OTT platforms.
As budgets shifts from traditional linear TV to CTV campaigns, first-party data will become more crucial to justify the spending and measuring results.
Brands would invest more in the audiences that are most inclined to buy your product or service instead of mass reach, there will also be a greater need for transparent attribution and measurement to show the value of audience-based buys

In today’s complex digital landscape, where budgets are shifting between different channels due to the looming recession, CTV has become an effective channel for more precise targeting. Moreover, with a smoother availability of first-party data, marketers have got the ability to measure consumers’ entire journey.

“CTV has evolved into a measurable, accountable performance marketing channel — allowing for more precise targeting, and, as a result, higher ROI. The economic downturn has accelerated the already rampant cord-cutting, resulting in even more ad inventory available on the market. We’ve reached the point where the entire user’s journey is measurable, and using upper-funnel data, marketers can see exactly how TV ads tie into the wider marketing goals. Through solutions like CTV AdVision, you can now immediately spot how CTV assists down-funnel channels, such as Google Ads and Apple Search Ads. These insights are especially valuable for optimizing costs in difficult economic times,” says Gijsbert Pols – Director Of CTV & New Channels, Adjust

Despite the CTV evolving as the best medium to reach the target audience, the biggest question is how marketers perceive this space. Nikhil Kumar, Vice President – IN & SEA, MediaSmart shares, “Brands will look at CTV, not as an extension of their digital campaign, nor will they reuse their Digital Video creatives / TVCs, but instead they will look at new and innovative ways to make creatives more engaging by leveraging QR Codes, Interactivity, and Ad-sequencing to enable compelling and persuasive brand storytelling via CTV”

As rightly put by Nikhil, going forward brands will look at innovative ways to attract the right audience. To detail some priorities for this year in the CTV space, Amit Yadav, Country Manager, South Asia at PubMatic elaborates, “As an industry, we need to make it easy for brands to transition from traditional to addressable TV, and for new, smaller brands to enter the space. In the short term, we need to solve a few things: 1)We need to fix the user experience by applying the correct technology solutions for the environment. This needs to be done in a unified, standardized way to foster the merger of broadcast TV and CTV and help brands transition to a new way of planning and buying. 2) We need to establish how to measure and attribute performance across the newly defined TV. 3) We need to ensure that the best possible data signals exist in this ecosystem for brands and media owners to create a fair financial exchange.”

Nachiket shares, “In the DoubleVerify report, we found a massive increase in streaming services subscriptions, with over 74% respondents subscribing to additional services in the past 12 months, contributing to the ascension of CTV. However, media quality concerns such as fraud and brand suitability can prevent marketers from realizing CTV’s full potential. While CTV is one of the fastest-growing digital media channels, it has also become a hotbed for fraud. The number of fraud schemes DoubleVerify uncovered surged by over 70% year over year from 2020 to 2021, and an unprecedented number of these targeted CTV and video. Third-party verification has become essential to safeguard brands and advertisers against the challenges in CTV environments. Advertisers will benefit from working with partners that can support them in ensuring they achieve their desired outcomes and deliver the ROI on their media investment allowing them to fully benefit from the potential of CTV as a new advertising channel.”

It is undeniable that brands are leaving no stone unturned to reach the right audiences, which makes a data-driven approach backed by digital channels a top priority for marketers. “In 2023, brands will hold greater value to having an accurate understanding of the rapidly evolving and fragmented TV landscape. In order to continue to reach the right audiences with the most relevant messaging in 2023, a high degree of engagement and measurement capabilities will be crucial. An insightful data-driven approach will therefore become a priority in order to streamline spending, investments, and exposure,” shares Prabhvir.

On the whole, it seems that the future of the adtech industry is one of continued growth and innovation, as more and more people turn to streaming services and internet-based content for their entertainment needs. With the development of new technologies like virtual and augmented reality, which could be integrated into CTVs to create a more immersive viewing experience, the future looks very promising, and it will be exciting to see what new capabilities and technologies become available in the coming years.