The Evolution of Digital Marketing: Programmatic Advertising's Role

The recently published dentsu e4m Digital Advertising Report marks a significant milestone as digital ad expenditures in India surpass TV for the first time. This shift comes as various sectors allocate their advertising budgets across an expanding array of digital media platforms. Within the digital realm, programmatic advertising stands out with a robust performance.

As outlined in the dentsu e4m Digital Advertising Report, "Programmatic purchasing of digital media contributed 42% (Rs 17,088 crore) to the digital media industry by the close of 2023, demonstrating a 37% growth rate from the previous year. We anticipate this sector to sustain a compounded growth rate of 27.51%, reaching a 45% share (Rs 27,782 crore) by the end of 2025."

Amyn Ghadiali, President of Business & Integration at GOZOOP Group, underscores this trend, stating, "Throughout history, media has aimed to connect with consumers through resonant messaging. Now, picture this: As an agency, I can precisely target your audience, predict their preferences, and increase conversion rates. This level of precision is driving the growth of digital and programmatic advertising."

With programmatic advertising forecasted to reach $18.42 billion by 2026, its ascent has revolutionized targeting capabilities and expenditure efficiency. Ghadiali observes that as digital ad spending approaches or exceeds native ad expenditures, brands increasingly turn to online channels to align with evolving consumer preferences. "To maximize advertising ROI and create impactful experiences across digital platforms, leveraging data-driven insights and innovative technologies is essential. This evolution underscores the shifting landscape of media consumption and the power of targeted advertising in today's digital age."

Paras Mehta, Business Head - Programmatic Solutions at Interactive Avenues (the digital arm of IPG Mediabrands India), notes that programmatic advertising accounts for slightly over 40% within the digital sphere. "While native ads can technically be bought via programmatic channels, overall native ads represent no more than 15% of the total spends."

Mehta emphasizes the benefits of programmatic advertising, including transparency, efficiency, data-driven marketing, extensive reach, automation, innovation, and integration ease with various Martech platforms, especially with the impending demise of third-party cookies and the growing importance of first-party data.

Tejas Rathod, Founder and COO of Mobavenue Media, asserts, "The meteoric rise of programmatic advertising is not just a trend but a clear indicator of where the future of digital marketing is headed towards automation and intelligence. The ability to use AI to identify and target the right audience is not just about serving ads; it's about creating meaningful connections and delivering value."

Prashant Deorah, CEO of Puretech Digital, concurs that India's digital advertising sector is experiencing explosive growth, significantly influenced by the adoption of programmatic advertising, which has revolutionized brands' approach to ad spends, encompassing both individual and programmatic purchases of native ads.

Deorah highlights programmatic advertising's precision in targeting and efficiency in execution, allowing for a nuanced approach to ad placements, seamlessly integrating native ads into user experiences.

"This dual approach to buying ads, individually for tailored placements and programmatically for scale and efficiency, underscores a strategic shift in advertising, where digital and programmatic avenues are indispensable for brands aiming for impactful engagement," Deorah emphasizes.

Mehta identifies three key pillars of programmatic advertising's transformative influence: audiences, real-time signals, and technology. "In essence, programmatic empowers marketers to precisely target the right users, at the right time, and in the right locations, thereby minimizing wastage and maximizing impact."

He adds, "From an advertiser's perspective, programmatic advertising is not about one versus others; rather, it's a strategic shift in centralized media buying and execution. Providing advertisers access to DSP platforms fosters transparency and trust, differentiating it from traditional channels."

Mehta stresses that programmatic advertising's strategic approach is instrumental for all types of brands in creating a meaningful impact, optimizing campaigns for better ROI through advanced technology and communication strategies. Integration with other crucial Data and Martech platforms further enhances its effectiveness, creating a seamless ecosystem for advertisers that traditional channels might lack.

"Considering these factors, while native ads will continue to play an important role in the lower funnel of marketing efforts, programmatic will continue to grow at a 12%-15% CAGR for the next several years, reaching over 50% of the total digital AdEx," Mehta predicts, aligning with industry report forecasts.

Regarding publishers, Mehta notes, "Firstly, it serves as an additional revenue stream, broadening their monetization opportunities. By providing a comprehensive audience-based inventory package to marketers, programmatic empowers publishers to offer targeted and relevant advertising space. This not only enhances the overall quality of content delivery but also contributes to a more engaging user experience. Additionally, programmatic allows publishers a guaranteed recovery period of 30 to 60 days, providing a financial buffer."