Why digital media is still the wild west of advertising

When India saw digital advertising spends exceed that of television for the first time in 2023, it was a watershed moment for the country, though it was a few years behind more developed markets in both the West and Far East. However, as incontrovertible is the fact that India, set to hold the largest elections in human history later this month, is also where 250 million new users are going to come online in the next couple of years.

According to the Dentsu-e4m Advertising Report, the digital advertising industry in India is worth Rs. 40,685 crore. “While social media dominates digital media spends, contributing with a 30% share (Rs. 11,962 crore), closely followed by online video with 29% and paid search with 23%.” With digital penetration continuing to make inroads on the backs of cheap, fast, and diverse internet plans as well as devices, marketers have never had so many platforms and screens from which to help brands flog their wares.  

However, with all that being said, digital is still the Wild West of advertising media: a still evolving landscape largely controlled by a few key companies, with smaller, newer players trying to stake some claim to it. While big tech, and other key consumer-first sectors have the first mover advantage, increasing competition, uncertain regulation and oversight, along with more than a sprinkling of bad actors and outlaws make the medium a hard nut to crack.

As we bring back our TechTalk series today, exchange4media asked industry veterans to take us on a digital ride along this burgeoning frontier.

The Good: Digital Everywhere

Sanjeev Jasani, COO, Cheil India, believes it’s time to face the facts: digital advertising is a gold rush. “There's immense opportunity, a constant churn of innovation, and frankly, a bit of chaos. It's the Wild West, as you say, with a ton of data, a million metrics, and sometimes standards are as scarce as a desert watering hole. But here's the exciting part: this frontier is brimming with potential and innovation,” he says, asserting it's bigger and more dynamic than anything TV could've ever dreamed of.

As per current reports by Kantar 2023, digital has crossed the 800 million mark and the number of people consuming content only on digital (with cord cutters counting up to 208 Mn) is approximately 15% higher than Linear TV consumers (181 Mn).

“With such a phenomenal growth story and the medium being seen as constant throughout the day in the life of a consumer, it faces significant challenges and gaps,” says Renu Singh, Partner, Digital, Client Leadership, dentsu X India, adding that, “The biggest challenge that digital faces today are the ‘Lack of Standardization.’ The medium lacks the standards that are globally recognized across metrics and measurement. With this, it leaves the brands confused in deciding the campaign effectiveness and comparing results across various platforms.”

With its ever-evolving nature, Singh asserts that digital poses a lot of threats to marketers. “It not only requires them to upskill, and maintain the pace of growth, but also needs them to learn to unlearn to adapt their content, creatives, and marketing strategies. For instance, formats including AR/VR offer a lot of scope for consumer engagement, however, the scale and ROI are still under question? How the brands leverage these technologies for meaningful conversations, assign KPIs chase metrics, and at the end measure the impact are still a few questions that marketers still face.”

Vipul Kedia, Chief Data & Platforms Officer at Affle, agrees that attribution gaps remain a significant challenge, as advertisers struggle to accurately attribute conversions to specific touchpoints along the customer journey. This lack of holistic attribution models can result in improper allocation of ad budgets and inefficient targeting strategies.

The Bad: Missing Measurements

“The prevalence of the last-click attribution model, while being the most convenient to implement, fails to capture the intricate user journey across multiple touchpoints and leads to misinterpretations of campaign effectiveness,” says Kedia.

Abhimanyu Vyas, Business Head, PivotConsult, PivotRoots, points to the example of a young brand that may find itself in a catch-22 with a high cost per acquisition and low return on ad spend (ROAS). While these might be discouraging metrics from the point of view of performance in the short term, investments into advanced modeling techniques deriving KPIs, like the lifetime value of acquired users, might offer, in turn, a form of justification by shedding light on the long-term value that is brought into the business.

“In most instances within branding campaigns, advertisers base their strategy only on traditional metrics such as reach, view-through rates (VTR), click-through rates (CTR), etc. The accurate measure of success, however, will be tracking KPIs that indicate an increase in brand awareness or consideration lift, which will be well measurable using digital survey methods, like Ads Data Hub or Meta Advanced Analytics.”

 Advertisers also struggle with publisher overlap resulting in a reduced unique user reach and diminishing returns. “Gaining comprehensive insights into supply partners poses a notable challenge, with advertisers often lacking transparency into the performance and effectiveness of various channels and vendors. This opacity hinders optimization efforts and undermines the efficacy of ad spends,” says Kedia.

The Ugly: Trust Issues

“It is famously said that ‘excess of everything is harmful’ and the same can be said about the data abundance available with digital campaigns. There is so much data available to the brands, however, it is all scattered and sitting in silos. The task of housing the data under one roof and building comprehensive audience profiles, delivering personalized experiences, and breaking silos to make data-driven decisions is still complicated and is the next bigger challenge for the industry,” says Singh.

Another crucial gap is building trust.  “Let's be honest, consumers are bombarded with ads. We need to find ways to deliver targeted advertising that feels relevant and respectful, not intrusive. Agencies shouldn't be just focusing on the next big ad campaign; but rather strive to build a sustainable future for the entire digital advertising ecosystem in India,” says Jasani.

And speaking of trust, or the lack thereof, there is the ever pressing, and indeed ever growing issue of ad fraud, committed across apps, devices, and touchpoints, each ingenious in their own way, but all common to the digital domain. According to Juniper research, ad fraud ended up putting advertisers $84 billion out of pocket just in 2023, a chunk of change expected to add up to $170 billion just by 2028.

“There are tools including IAS, MOAT, and DAR to name a few that ease the stress that Ad fraud poses. But are these 100% leakproof? I don’t think so.  Ad fraud is a substantial reason for concern for advertisers. The lack of transparency across placements, content, and brand safety are critical gaps that still need to be addressed as industry-wide standardized practices,” says Singh.

And while the industry has progressed in providing some solutions, a recent WARC report revealed gaps in the measurement of media quality. While more marketers indicated that they are evaluating media quality, only 17% of marketers in APAC, including India, are assessing media quality across metrics such as fraud, brand suitability, viewability, and geography.

“This is a concern that marketers need to respond to as our most recent Global Insights Report for 2023 found a notable rise in fraud rates in India during 2022 and a marked decrease in video viewability in the same region. We are therefore continuing to advocate the importance of measuring media quality through thought leadership and sharing with the industry examples of how this has benefitted advertisers that work with us,” notes Nachiket Deole, Head of Sales – India, DoubleVerify

The Sequel

Deole, however, believes the industry has made considerable strides since then. “Our tools are becoming more advanced, and industry standards and accreditations from associations like the IAB and MRC empower the media and marketing industries to succeed in the digital economy.”

“Another challenge is attention-based measurement, where standardized metrics are yet to be fully established. However, there is optimism that the industry is steadily advancing towards defining standards for gauging attention and determining which attention metrics matter,” he adds.

Venugopal Ganganna, CEO, Langoor Digital, concludes, “The digital advertising landscape may be a wild frontier for now, but it's brimming with potential. By addressing the current gaps through standardization, AI-powered solutions, and collaborative efforts, we can transform this Wild West into a thriving ecosystem that benefits both brands and consumers. The future of digital advertising promises a world of personalized, data-driven marketing experiences that are respectful of privacy and deliver measurable results. It's a future worth getting excited about, and AI is the key to unlocking its full potential.”