#SocialThrowback 2017 was a slow year, digital ad spends grew by 30%: Experts

Social Samosa spoke to digital heads and media planners to understand how 2017 digital ad spends were in terms of advertising on digital, the sectors that led with their spends and challenges faced by brands.

Towards the end of  2016 and the first half of 2017, the sentiment was down  with the effects of demonetization. Mid 2017, there was GST roll out, which added to more confusion and brands had to curtail their over all ad spends. In spite of the low sentiment, we found brands heavily advertising on digital.

From launching digital first ads to experimenting with long format and integrating with various online content platforms, the year was exciting for brands in the digital space.

Debraj Tripathy, Managing Director, MediaCom feels, "Some of the challenges in the advertising domain, actually helped digital. While brands restricted their spends of the mainline mediums, but there was a good growth seen on digital.

While, 2016 saw a 47 percent growth in digital, this year, I believe, the spends will be around 30 percent. The overall industry ad growth for 2016 was 12 percent and for 2017, it is estimated to be around 10 percent."

Social Samosa spoke to digital heads and media planners to understand how 2017 digital ad spends were in terms of advertising on digital, the sectors that led with their spends and challenges faced by brands.

2017 Digital ad spends wrap up

According to the FICCI-KPMG report, 2017, digital ad spends are expected to cross INR 296 billion in 2021. While 2016 was in line with this projection with digital advertising contributing INR 76.92 billion, however, 2017 witnessed a much slower growth.

According to Gopa Kumar, Executive Vice President, Isobar, "2017 was relatively slow in terms of digital spends, with spends getting saturated or not deployed by many marketers because of varied reasons. Certain sectors continue to spends on digital and their growth is encouraging but overall 2017 would be termed as a very slow year in terms of digital spends particularly compared to 2016 and when the expectations were 2017 will be better than 2016."

However, Pratik Gupta, co-founder, Foxymoron has a different point of view; he opines,  "2017 was a transformational year. The years preceding were still setting up digital, but 2017 saw digital coming to the centre of all the action; whether it was video led or data led, digital was at the centre of the action. Spends were in the range of 12-15 percent depending on the sector."

Nishant Raut, Director, Brand Communication, Gozoop explains that this year has seen a greater push with regards to digital spends with the maximum focus being mobile marketing. "The importance of mobile marketing and personalized content for each specific user has been driven due to the increasing Mobile Data Distribution which has taken place in the last 8 to 10 months," adds Raut.

Sumanta Ganguly, National Director - Digital Marketing & Transformation I EVP – LinTeractive pegs 2017 to be around USD 1.21 Billion roughly 15 percent of total ad spends.

Digital is still growing in percentage terms higher than any media and possibly will see the year end in 30 percent growth over 2016.

Sectors that led in terms of advertising on digital

E-commerce is the leading sector in terms of digital ad spends and marketing activities in 2017. There has been considerable action on digital from the sides of consumer durable, fintech start-ups and health supplementary products as well, who also contributed to the spike in spends.

Ganguly from LinTeractive points out, "It’s no surprise E-commerce will top the list followed by BFSI. Auto has taken a bit of back seat and we saw a lot of push from FMCG purely driven by increased video content consumption cause of ‘Jio effect' "

To add perspective, ecommerce led digital in ad spends in 2016 too, occupying 20 per cent of pie, while FMCG followed with 14 per cent.

Challenges that brands had to overcome while advertising on digital

In 2017, brands faced a lot of challenges; there was a low sentiment across the market affecting the spending patterns stemming from the after effects of demonetization and the roll out of GST.

Talking about some of other the challenges faced by brands in terms of advertising on digital, Gupta from FoxyMoron highlights, "Talent has been the biggest problem that everyone in the sector has had to overcome. With digital and digital transformation coming to the forefront, availability of this talent to make this leap has been the biggest problem for all brands and agencies alike. Also, data and data centricity has blown up! Data has been available to the bigger companies across the board. Analysing that data, and more importantly making it all available at one place for easier decision making has been the second biggest problem that all companies have faced."

Ganguly further explains, "I believe brands need to stop looking at digital from the lens of media. Applying TV rules to video is what the lazy marketer today is looking to achieve, this is where issues of fraud such as non human traffic to deliver reach etc plagues the market. Ad blocking software and reduced user engagement on social media are also issues that the industry is currently left battling."

Chetan Asher, Founder & CEO, Tonic Worldwide opines, "The digital landscape relies heavily on technology and this can be a bane or a boon. The challenge is to use this technology effectively and not be daunted by it. With the advent of programmatic, newer ad formats and new emerging platforms made the task daunting for advertisers."

"There is a need to draw a fine line between privacy and real-time personalized content because people don't like to get bombarded with too many information, but would like to consume only what is relevant to him or her. Brands have also started to become an extremely easy target for irritant consumer, so the importance of a holistic digital / marketing plan is extremely essential. Finally, there is a need for better planning and collaboration required between the brands, agencies & various platform owners to ensure a conducive environment for the industry to grow," concludes Raut.

It is expected that the effects of GST roll out will ease in the next few months, brands will also increase their overall digital ad spends in 2108. The upcoming year, surely looks exciting for brands in the digital space as they get to have more fun and experiment with content freely.

The article is a part of our Social Throwback series, that will recap everything social media from 2017.