Social media platforms spar over e-commerce advertising

At the recent Google for India conclave, Alphabet’s annual flagship event in the country, among a slew of announced developments and offerings, special attention was paid to partnerships between and new features available to online merchants and Google’s various products, especially YouTube, and Search.

According to Hootsuite, ad spends on social media will be more than $173 billion in 2022, while in 2023, ad spending on social media is projected to reach more than $268 billion. And according to Statista, “While there are many regional differences when it comes to social media usage and accessibility, some platforms reign supreme among users and advertisers alike. As of 2022, Facebook, YouTube, and Instagram were the most popular social networks worldwide…. Meta-owned properties also ranked among the leading social media platforms for marketers.”

However, Zuckerberg’s baby’s dominance is no longer assured as GAFA tech giants (Google, Amazon, Facebook, & Apple) are in intense competition to carve the largest slice of the social media ads pie, which many see as having been hogged mostly by Meta brands till now.

Noting that the vast and complex digital landscape is changing, with data-driven decision-making and precise targeting becoming more important, Rohan Chincholi, Managing Partner – Digital, Havas Media India, says expanding reach is expensive, and generating sales even more so.

“The digital advertising landscape has witnessed a pronounced intensification of competition in recent years. Meta's commanding market share in the e-commerce domain is well-aligned with the boom of social commerce. Concurrently, prominent social platforms such as YouTube have always been highly competitive,” he says, adding that the efficacy of advertising strategies now hinges on the precision of targeting and the adept utilization of client data to activate relevance.

Agreeing that in the Indian e-commerce advertising landscape, Meta has been the dominant player, Anshuman Misra, Sr. VP – eMarket, LS Digital, also notes that as India's internet user base continues to grow rapidly, people’s browsing habits are also changing over time. “This has resulted in stiff competition among other emerging social media and technology giants. YouTube, with its large user base and compelling video content, is making significant strides in e-commerce advertising because it has noticed this shift.

For instance, he says YouTube, a Google product, is a seasoned player that has what it takes to cater to India's diverse culture and dynamic consumer base.

Indeed, Meta now faces the challenge of re-engaging and retaining its user base as Netflix, Hotstar, etc begin to gain traction as platforms to advertise on, even as the lines between OTT, CTV, and indeed, digital become blurred. And now with the Reliance-Disney deal seemingly in the offing, there’s sure to be further disruption of the status quo.

Meanwhile, again according to Statista, in the year 2022, the estimated market size of social commerce in India is seven billion U.S. dollars, and the market size of social commerce is likely to increase to 84 billion U.S. dollars in the year 2030.

However, given that India will have around a billion people online by 2025, and will have doubled its economy by 2030 according to various reports including S&P, JP Morgan and others, some basic extrapolation points to a much higher figure, especially given that the global social commerce market is estimated to be valued at 11 trillion USD by 2030.

So, who’ll emerge on top?

“Forecasting a clear-cut dominant winner remains complex. The ultimate trajectory will be determined by the capabilities of these platforms in adapting to the ever-shifting market dynamics and the discerning preferences of consumers,” avers Chincholi, while Misra asserts, “To stay ahead, Meta will need to adapt to the evolving preferences and needs of the Indian market while continuing to innovate in its ad offerings.”

Also, we should spare a thought for smaller players trying to break into the commerce cartel.

“No doubt it is tougher for smaller and local players in the e-commerce market, but they can adopt a more measured approach to attract business and acquire new users. One of the strategies can be a targeted approach where one would identify specific regions within India. They should also use the vernacular route to create content that resonates with non-English audiences, helping them connect more effectively with consumers,” advises Misra, noting that collaborating with local businesses, manufacturers, or distributors can give smaller players a foothold in specific markets, as such partnerships can provide insights and access to local networks.

Chincholi further adds that these players can focus on building strong, personalized relationships with local customers, providing exceptional customer service, and getting traction on owned social platforms. “Local players are already making strides in the e-commerce arena through content strategies, establishing owned channels, and effectively harnessing the influence of micro and nano influencers.”