Small firms become major contributors to digital ad spending in India

The onset of the new year witnessed a wave of layoffs from tech giants, exacerbating the impact of geopolitical tensions, economic slowdown, and inflation on various sectors, notably the advertising industry. GroupM's end-of-2023 report projects a global faltering in ad spending growth, anticipating a decline to 5.3% in 2024. Similarly, Magna's forecast indicates a drop in the growth rate of global ad spending to 5.8% from the previous year's approximation of 6.5%. Amidst these challenging forecasts, India emerges as an outlier, attracting attention and investments as the world's fastest-growing major economy. This growth is largely attributed to the burgeoning presence of startups and emerging homegrown brands.

Rohan Bhansali, Chairman and Co-founder of GOZOOP Group, envisions a shifting world order over the next two decades, foreseeing a rise in entrepreneurship in India. He emphasizes the role of his company in supporting young entrepreneurs and SMBs in their ambitious pursuits.

Rohan Chincholi, Managing Partner of Digital at Havas Media India, concurs, highlighting the pivotal role of small and medium enterprises (SMEs) in driving the Indian economy. He notes the significant contribution of SMEs to the growth of e-commerce, driven by a focus on ROI.

Global heavyweights like Amazon, Google, and Meta increasingly rely on Indian companies, both large and small, with smaller entities demonstrating surprising influence and ambition.

Abbhishek Chadha, EVP of Interactive Avenues, notes a plateauing of overall growth in the advertising industry due to stagnation in AdEx caused by global economic slowdowns. However, he highlights the increasing digital adoption and transformations by brands and companies, particularly in high involvement categories like BFSI and Auto.

Experts foresee startups and SMBs revolutionizing the advertising landscape, injecting innovation and agility. They emphasize the increasing focus on digital experiences, aided by AI technologies, positioning digital as the future of advertising.

Chincholi observes that many SMBs are digital-first in thinking and execution, leveraging disruptive technologies like AI to enhance targeting precision and measurement accuracy. He notes that startups distinguish themselves by adopting a customer-centric and ROI-driven approach.

Prashant Deorah, CEO of Puretech Digital, underscores the pivotal role of SMBs in driving digital ad spends in India, highlighting their multifaceted approach and willingness to adapt to market changes.

In conclusion, the rise of e-commerce and digital-only brands across B2C landscapes, coupled with the digital-first approach of B2B SMBs, signifies the transformative role of startups and SMBs in sustaining the digital advertising ecosystem amidst challenging times.