Retail media will gain further prominence and capture a larger proportion of advertising expenditure in the times to come. According to GroupM’s This Year, Next Year 2022 global end-of-year forecast, retail media in India was estimated to be at $551 million in 2022 and is expected to nearly double by 2027. Globally, retail media, one of the fastest-growing segments of the advertising industry, was estimated to reach $110.7 billion dollars in 2022.
In such a scenario, retail media will continue to pursue strategies that will assist it in ascending the sales funnel, particularly in CTV, stated Wavemaker’s recently launched first edition of Spotlight 23 report.
BestMediaInfo.com caught up with Vishal Jacob, Chief Digital and Transformation Officer at Wavemaker India, to understand the details of the report that puts focus on the top 23 strategic focus areas for businesses in India.
Talking about the growth of retail media, Jacob said, “The retail media network has expanded from on-platform inventory to off-platform inventory. All retail platforms want to provide brands with full-funnel inventory and as a result, both Amazon and Jio have been investing in content that can drive more growth in users and provide top-funnel inventory which will fuel their growth.”
Such investments would be particularly seen in Live sports and can fuel the growth of CTV. For example, Amazon Prime had India Tour of New Zealand, Jio had FIFA WorldCup and it’s going to showcase IPL 2023 that could fuel growth for CTV users.
Although, closed-loop attribution in a non-clickable environment would be tough, but to overcome this challenge, “Brands and retail platforms are creating analytical models or using data points through specific call-to-actions like giving a missed call, sending WhatsApp message, QR code etc.” He added, “Digital research – like brand lift could help in measuring brand health in DOOH and CTV, to determine the effectiveness.”
The Spotlight 23 report also stated that as more and more e-retailers provide advertisers access to their rich data by forming their own RMN (Retail Media Network) like Big Basket's relationship with Trade Desk, non-endemic advertisers will be attracted to Retail Media as well.
Increased use of artificial intelligence across businesses
Infrastructure investments and the inability to find and train skilled workforce have impeded the widespread use of AI. The rise of AI as a service (AIaaS) and no-code/low-code AI tools and platforms are addressing these barriers and making it easier than ever to get started with AI, stated the Spotlight 23 report.
AIaaS (Artificial Intelligence as a service) refers to off-the-shelf AI solutions that enable businesses to implement and expand Cloud-based AI tools such as Amazon Machine Learning, Microsoft Cognitive Services, and Google Cloud Machine Learning that can help businesses discover the full potential of their data.
But how can the AI-ML-driven services work in the absence of third-party cookies in the advertising scenario given that they have limited learnings from human experiences?
Jacob answered, “Algorithms optimise campaigns on multiple parameters. There are over 60 parameters that are appended to every impression in the bidstream which is accessed through log data. The AI models are built on this and UIDs are just one of the parameters. Given this context, it is safe to say that AI models will continue to find ways to access signals through which they can optimise campaigns in the absence of third-party cookies.”
Several brands picked on the metaverse bandwagon in 2021 and 2022 and enjoyed the first-mover advantage. Talking about the way forward for the Web3 ecosystem apart from PR generation and having the mere satisfaction of being present, Jacob said, “While most of the initiatives in this space have been experiments in India, a sustained focus and presence will only happen when consumer adoption happens at scale. The developer community on web 3.0 have been working very hard to improve consumer experiences and create the right reasons that can drive scale.
He added, “Sophisticated Avatars and Digital Twin Technology are two such examples that will augment experience in Metaverse and create more use cases for businesses.”
As mentioned in the report, Meta is also incorporating more inclusive customisation options, like cochlear implants, hearing aids, and wheelchairs, so that users can create their avatars as realistically as they desire. Applications like Zepeto, Osuvux make it easy to create avatars while also allowing interoperability, using a metaverse avatar NFT system. The Shanghai Urban Operations and Management Centre has created a digital twin of the city's 26 million residents, which models one hundred thousand aspects, from garbage disposal and collection facilities to road traffic, and apartment building size and location. Tesla generates a digital twin for each automobile it makes. The combination of digital twins and the metaverse can allow us to digitally replicate the real world.
Newest buzzword - Generative AI
ChatGPT was launched on November 30, 2022, by San Francisco-based OpenAI, the creator of DALL·E 2 and Whisper. According to Open AI CEO Sam Altman, ChatGPT generated 1 million+ users within 24 hours. As forecasted by Gartner, Generative AI will account for 10% of the data that is produced, up from less than 1% now in the next 3 years.
According to the Spotlight 23 report, this unprecedented scale could give personalised communications more firepower and could solve challenges in customer service, content creation, entertainment, e-commerce etc.
On the contrary, “Like any other immersive technology, Generative AI comes with its attendant risks like security issues, concern over data privacy, limitations in creativity and copyright issues. New data laws, organisational protocols and governance would change basis this,” stated the report.
Upon being asked if the newest buzzword, ChatGPT, is only a buzzword like the ‘Metaverse’ was in 2021, Jacob said, “If you look at the Metaverse story essentially, the hype came in only after Facebook changed itself to Meta. There was a lot of talk about how content consumption would change from an experiential standpoint. However, with regards to ChatGPT, there has been hype because of the kind of content ChatGPT can create for you.”
“The utility value is exceptionally high. On the Metaverse side again, the gaming industry has utilised it and is doing exceptionally well with it. A lot of brands that invested towards it (Metaverse) may not have recovered or got a strong ROI on it and that wasn’t even the intent of getting into it. The intent was to get an experience of it and latch in certain kinds of consumers on board. So, I think it won’t be fair to compare both of them.”
The biggest challenge is efficiently garnering more and more consumer data
He said that each and every brand today is investing towards Martech in different capacities but the most essential thing for brands today is to figure out the problem of getting their hands on consumer data.
“The big Do’s are actually to collect consumer data in a far more efficient and effective way. How do you enrich the existing data and use it to understand the consumers a lot better? How do you activate that data to drive growth?”
According to him, smaller brands are far more mature in this regard compared to big brands. “Every single brand today has got a technology stack they are sitting on. The level of maturity of the tech stack may differ from organisation to organisation and category to category. Any retail brand that you see has a lot of plug-and-play so you don’t necessarily need to be a Unilever to do it. Today, there are a lot of plug-and-play stack options you can look at. The smaller player should first look at what they are trying to solve. If the problem is clear, it’s much easier to find the right kind of stack,” he said.
Performance marketing vs Brand building
According to Jacob, the two schools of thought are built upon what has worked for brands. However, both are equally important.
“There are legacy brands who built strong brands. They believe that if you have a strong brand, businesses will grow. Then there are new-age businesses that have disrupted this thinking with a belief that what really matters is to get consumers on board. Their ability to build brands really depends on the experience they can provide; they think that if they can give a superlative experience to their customers they will talk about the brand in a favourable way and get in the right kind of word of mouth. Eventually, this will drive positive brand disposition for them,” he stated.
He then went on to add, “You need to simultaneously build brands because over the years once you have maxed out of the in-market audience, the next level of growth can only come if you have strong brands. I think having a mix of both is critical.”
He further added that traditional brands should learn from the agility D2C brands have adopted to get on top.
Ad fraud and the impact of the decline of third-party cookies on personalisation
According to Jacob, the entire ecosystem is still running on third-party cookies as Google has announced it won’t do away with cookies from Chrome until 2024.
“The challenge is that if it gets depreciated, we will have to come up with alternate solutions. There are multiple solutions being created - one of them is Universal ID. There are algorithms trying to understand human behaviour and find ways in which we define cohorts. There are contextual advertising algorithms that understand who you are basis the kind of content you have consumed,” he said.
“For me, the main question is if not cookies then what? And it has not been answered yet. There are multiple solutions being developed so it has to be an evolution,” he added.
Upon being asked what’s the solution to the ad fraud menace, he said, at Wavemaker they encourage all their clients to adopt third-party ad fraud solutions. “We don’t subscribe to one solution or one specific platform. We have specialists on board who advise our clients in terms of what’s working and not working by deploying these solutions. At Wavemaker we insist that every impression that goes out has to be monetised and audited through third parties that look at brand safety and ad fraud.”
Insights that led to the launch of the Spotlight 23 report
Technology is constantly evolving and disrupting businesses across industries in various ways. This has led businesses to put digital technology at the very centre of the organisation and relook at the way they are delivering value to their customers.
Jacob shared, “Currently there is no reference point to understand some of the disruptive trends in technology and Spotlight was launched to do just that. Spotlight 23 was launched as a report that puts a spotlight on the top 23 strategic focus areas in digital and emerging technology for the year 2023. It took us three months to put this report together and it has been co-authored by some of the domain experts at Wavemaker.”
The topics covered in Spotlight 23 include big tech, e-commerce, AI, cloud computing, web3, digital payments, and some potentially disruptive technologies that may show some advancement in 2023.