Google Ads Expected to Raise Prices for Festive Season Advertising.

In the world of digital advertising, Google Ads reigns supreme. With its diverse array of formats, including search, video, and display, it has long been a favorite among marketers looking to reach a wide audience. This advertising giant's popularity is attributed to its extensive targeting options and accessibility to both large corporations and smaller brands. However, as India ushers in its festive season and the global holiday season approaches, industry insiders are bracing themselves for a forthcoming price increase on the platform.

Unlike some other advertising platforms, Google Ads does not have a fixed price structure in India. The cost varies considerably due to factors such as the advertiser's industry, market trends, and customer life cycles. As of now, the average Cost Per Click (CPC) for Google Search ads stands at ₹20, while the average Cost Per mille (CPM) for display ads is around ₹50. Google Display ads typically fall within the ₹5 to ₹10 range, while YouTube ads cost approximately ₹0.033 per impression.

A senior executive at a programmatic media partner platform points out that advertisers, both large and small, anticipate higher expenses on these platforms during peak sales seasons like festivals. Even if Google does raise its rates, most advertisers are well-prepared to accommodate the increase. They recognize that Google Ads is a platform they cannot afford to ignore, and they have likely made financial arrangements to cover ad spending, even if they exceed expectations.

Dr. Kushal Sanghvi, Head of CitrusAd for India & SEA, agrees with this sentiment. He predicts that Google, especially through YouTube, is likely to raise ad rates for the 2023 holiday season, starting from the end of October. Sanghvi explains that Google is a pivotal player across various industries, from FMCG and electronics to automotive giants. During festive seasons, it becomes crucial for brands to showcase their products and services, and Google, like others in the market, recognizes this demand.

With the expected surge in purchase intent during the upcoming holidays, Sanghvi anticipates that Google may increase ad rates by at least 15%. Advertisers are likely to be willing to pay higher rates because they need to position their brands in front of eager customers. As the year-end approaches, people are more willing to spend, making it a lucrative time for advertising.

Sanghvi also highlights the growing digital penetration in India, with increasing mobile internet usage in both metropolitan areas and rural districts. This expanding digital landscape provides advertisers with a vast and far-reaching platform to connect with their audiences. The younger generations, in particular, are active and present online, making the increased cost a worthwhile investment.

Preetham Venkky, Chief Digital Officer at DDB Mudra Group, views the potential price increase as a reasonable response to inflation. Over the past two years, inflation has been on the rise in India, impacting various sectors. Google, being a sales-driven platform, is not immune to these economic factors. Additionally, salary hikes for employees also contribute to the need for price adjustments.

Venkky emphasizes that digital media spending now accounts for more than 50% of advertising expenditure in India, primarily dominated by Google and Facebook. Given the significant role Google plays, its rate adjustments are strategic. India Inc is eager to tap into domestic consumption, and this trend is likely to continue in the last four months of the year.

While some experts speculate that Google Ads rates could increase by as much as 25-30%, others believe that a more moderate 10-15% hike is a response to inflationary pressures. Regardless, agencies are poised to negotiate with Google to secure the best deals for their clients.

In conclusion, as the festive season gains momentum in India and the global holiday season approaches, advertisers should be prepared for potential rate hikes on Google Ads. While the exact increase remains uncertain, experts agree that it is a response to inflation and the platform's pivotal role in the digital advertising landscape. Advertisers will need to adapt to these changes to effectively reach their target audiences during these high-demand periods.