Influencer & performance marketing to spur Vertoz to 30-35% growth: Ashish Shah

Ashish Shah, Founder & CEO, Vertoz, takes stock of the major development and trends in 2017 that will have a significant impact on the growth of digital advertising in India in the year ahead. According to Shah, the programmatic advertising business model has changed from B2B to B2C, which will allow digital agencies to directly sign on clients. He also highlights the increasing need for impression-by-impression targeting. 

Shift in programmatic advertising business model 

We had seen many developments in our company during the year 2017. Programmatic advertising business model has changed from B2B to B2C, what it means for us was earlier business was happening among one programmatic company to another programmatic company present in various countries. Now, this business has moved to B2C model, wherein we have started signing on many direct clients, which has contributed for good growth of our business. 

During 2017, we added two new products by name – influencer marketing and performance marketing – which are taking shape in the Indian market now. We have got good response and we are expecting sizable business from these two segments during 2018. 

We signed leading corporates like Godrej, Air Asia, Lenovo and Amazon during 2017 and we are very confident of signing more brands and corporates this year as well. 

Looking ahead 

We are currently talking to a couple of small and medium players for acquisitions in the US to grow inorganically and build good foothold in that country. The international market in the US and Europe are at a matured level and at high growth levels, whereas the Indian market is a very nascent market. This is going to be the biggest development and growth driver in 2018. 

As the middle class in India is shaping up to 54 crore people, the need for increase in digital marketing spends in the country has gone up substantially and brands are following the developments taking place in developed countries. This trend is really going to help us in garnering more share in digital spends of brands and corporates in the country during 2018. 

As we recently got listed on NSE Emerge, we are sufficiently funded to expand our business, which would give us an edge over the others to grow at least at 30-35 per cent this year. 

Game-changing developments 

While programmatic buying was initially focused on display advertising, they have since expanded to mobile, video, native and social. 

Digital access has become a part and parcel of both Indians and people in the US and other developed and Asian countries. People are always hooked to their smartphones, desktops and iPads at any given point of time. The marketers are also looking to tap these consumers on the go. So, they are taking not even a small chance to lose them. This has made brands and corporates to use digital advertising as a route to reach out to their consumers. 

However, all the digital advertising is not currently happening through programmatic advertising. If you compare the domestic market with the international market, the share of programmatic advertising in digital advertising is much higher at 10 per cent of their digital spend, whereas in India it is very small in number. 

Mobile ad spend in India stood at Rs 2,525 crore in 2016. Mobile ad spend is expected to grow at a compound annual growth rate (CAGR) of 59 per cent to reach Rs 13,325 crore by 2020, with affordable internet and cheap smartphones driving content consumption, says a report from Dentsu Aegis Network-owned social and digital media agency WATConsult. We would see this as the biggest driver of the advertising sector. 

Annus Horribilis or Annus Mirabilis? 

As the need for impression-by-impression targeting is increasing, which enables buyers to bid on specific impressions and target users believed to be most receptive to the advertising, the direct advertising on these programmatic platforms have gone up because of these developments and we had seen good traction during 2017. We are expecting this growth to continue this year too. This will give a big boost to advertising as a sector and could see good high growth rates in digital ad spends in the coming years. 

I would say that the year 2017 was Annus Mirabilis, as we have experienced good growth rates in digital advertising. 

The above trends in 2017 support strong growth in both domestic and international markets for robust spending on digital advertising, which will in turn drive the revenues of digital and programmatic advertising in both domestic and international markets. 

The whole scenario for the advertising sector as a whole is shifting towards good content and digital marketing. Mobile has taken over all other platforms in terms of convenience and on-the-go device to reach out to consumers. 

Trends to watch out for in 2018 

We are most excited about the following trends, which are going to be good growth drivers for advertising sector as a whole: 

Digital has become an intrinsic part of every Indian’s day.

E-commerce is the biggest spender on digital media, accounting for 19 per cent or Rs 1,309 crore of the total digital spends. This is followed by FMCG, which accounts for 14 per cent (Rs 935 crore), telecom (12 per cent) and BFSI (11 per cent). The other significant contributors are consumer durables (9 per cent), automotive sector (8 per cent), media & entertainment (8 per cent) and retail (6 per cent).

Digital advertising market in the US has grown from $1.6 billion in 1992 to $40 billion in HY 2017, the same trajectory Indian market is going to follow.

SMEs and start-ups are well funded through equity and many more people hitting the market are going to drive similar growth in India.

Acquisitions have become very common in the US in programmatic advertising. The international market in the US and Europe are at matured level and at high growth levels, whereas Indian market is at very nascent market. This is going to be biggest development and growth driver in 2018 for us; we are looking at acquiring companies in the US in the programmatic advertising space.

As the middle class in India is shaping up to 54 crore people, the need for increase in digital marketing spends in the country has gone up substantially and brands are following the developments taking place in developed countries. This trend is really going to help us in garnering more share in digital spends of brands and corporates in the country during 2018.

The red flags 

Malware in digital advertising is going to eat away budgets of digital advertising. We have partnered with GeoEdge & Integral Ad Science, a premier provider of ad security and verification solutions for the online mobile advertising ecosystem. These companies help in eliminating fraudulent leads and virus attacks. Increased advertising security in digital marketing is going to be biggest focus for digital advertising in 2018, as this brings in lots of credibility and transparency in dealing with brands and corporates.