CMOs Utilize AI Tools for Festive Marketing Spend Optimization

Ankit Desai, Media Head at Marico, one of India's major FMCG companies, is delving into the realm of AI tools for optimizing digital ad expenditures. With the company allocating nearly Rs 900 crore annually to advertising and promotions, a substantial portion of these funds is directed towards digital marketing. A significant focus of their advertising budget is earmarked for the festive season, encompassing Durga Puja, Diwali, and Christmas, falling in the third quarter of the year.

Performance-driven AI tools are instrumental in scrutinizing spending patterns during peak traffic phases. They meticulously analyze micro-trends across various channels, redistributing bids and budgets for optimal return on investment (ROI). These tools also forecast effective budget pacing strategies for forthcoming campaigns.

Ankit Desai emphasizes that these AI tools rely on a multitude of datasets to enhance the efficiency of the entire ad bidding and media buying process. Furthermore, they facilitate the identification of the most valuable consumer groups, which can then be tracked for improved conversion rates in the mid-bottom and bottom segments of the marketing funnel.

The AI experimentation phase is ongoing, and Marico intends to assess the impact of various tools before deciding to implement the most suitable one comprehensively.

Dabur, another prominent FMCG company with an annual ad spend of nearly Rs 650 crore, is also exploring AI tools to optimize their digital advertising expenditures, according to Rajiv Dubey, the company's media head.

This trend extends beyond FMCG companies, as top advertisers from diverse sectors like CPG, BFSI, e-commerce, consumer durables, and tech startups are actively pursuing AI-powered strategies to reduce advertising waste and enhance their festive campaigns.

Moreover, a report by Redseer predicts substantial growth in the Gross Merchandise Value for India's eTailing during the entire festive month of November 2023, with an estimated figure of approximately INR 90,000 crores, marking an impressive 18-20% increase compared to the previous year.

AI-driven media planning is not confined to the festive season alone; it has become a year-round endeavor, with campaign optimization being the focal point for marketers, especially considering the persistent global economic challenges.

As demand escalates, the supply of AI solutions has surged. New-age technology firms such as Scibids, Pixis, and SkanAI have emerged to assist media planners in streamlining their strategies. Their client rosters include prominent brands like Nestle, Dell, ITC, Swiggy, and renowned media agencies like WPP and GroupM.

These AI tools operate by contextual learning from historical campaign data, seasonally-driven trends, attribution, analytics, and real-time performance data. They effectively manage biddable digital ad spend via programmatic methods to enhance the precision of marketing expenditures.

Samir Karpe, Country Head of Scibids, explains that Scibids AI seamlessly integrates with selected media buying platforms (DSPs). It tailors its digital media procurement strategy using customized bidding algorithms. Various sectors, including CPG, automotive, telecommunications, and hospitality, have harnessed this technology to achieve remarkable efficiency improvements of up to 70% in media expenditures.

These optimization models continually track search volume indices, patterns of audience engagement, and buyer intent, enabling them to swiftly mitigate abrupt spending fluctuations caused by unpredictable changes. They autonomously identify and address erroneous spikes in ad spending, significantly enhancing overall expenditure efficiency.