Brands prioritising customer retention as acquisition costs soar: AdYogi co-founder

New Delhi: While the digital world is evolving at an unprecedented pace new trends are also erupting every day. The first among them is a focus on retail media. 

Compared to 14 years for traditional media and 11 years for social media, retail media reached $30 billion in just five years and is also expected to be a key focus for multiple brands in 2025 as per MMA data.

Supporting the arguments about the growth of retail media, Anshuk Aggarwal, Co-founder of AdYogi, said, “We have been in the process of closing annual operating plans with many brands. A lot of the brands we work with are eyeing a growth of 20-25% in 2025. Many of them are using online channels to grow. 

Meta and Google now offer omnichannel campaigns that allow you to run ads on Facebook and Google, driving people into your retail stores. We are seeing that using these omni-channel campaigns, brands can achieve a 15-20% growth target for 2025.”

In the era of Retail Media 2.0, the epicentre has shifted from a narrow emphasis on search-driven e-commerce to a more holistic, full-funnel approach that leverages the wealth of first-party shopping and streaming signals to power impactful advertising solutions.

So, we asked Aggarwal which format of ads will dominate the scene in retail media in 2025.

Replying, Aggarwal said, “There is an interesting ad format called Performance Max for store sales (Pmax for store sales). If you have searched for coffee nearby on Google Maps, you might have seen an ad for a cafe that is 3 kilometres away.

These ads on Google Maps are primarily meant to drive store footfall and are gaining popularity rapidly. Many brands, such as Manne, are using Performance Max for store sale campaigns to show ads on Google Maps.”

Moving further into the conversation on trends, Aggarwal mentioned that due to the economic headwinds in the global economy, brands will focus more on customer retention as new customer acquisition costs are rising day by day.

Explaining his stance, he said, “Acquisition costs have steadily risen in India. Five years ago, the acquisition cost in India was as low as Rs 400 (approximately $ 4 - 5). Today, it has increased to 10-15 dollars. As a result, brands have increasingly realised the importance of retaining their customers and boosting loyalty. 

WhatsApp has become a core channel for customer retention. Many brands use WhatsApp to communicate with their existing customers, informing them about new launches or sale events. This approach helps bring back existing customers and enhances loyalty.”

Speaking of customers, he also mentioned that in 2025, brands will have to focus equally on brand building and performance marketing to retain them.

He also pointed out that AI will be a huge driver of adex in 2025.

From the horse’s mouth, “We are observing that AI-generated content is performing exceptionally well on social platforms. For instance, some brands are using AI to enhance their catalogues by generating new images, changing models, and altering backgrounds. 

When conducting A-B tests on Meta, where one ad features organic content and the other AI-generated content, the better-performing ad receives more budget. These AI-generated ads tend to achieve higher click rates and conversion rates. Consequently, I foresee a significant increase in the use of AI content for e-commerce catalogues on ad platforms, leading to improved efficiencies and higher ad spends in these categories.”

Hinting towards better days for Meta and Google, Aggarwal mentioned that as more startups launch their IPOs, they will have more money in their coffers.

“I've observed that a significant portion of many brands' funding is allocated to ad platforms like Meta and Google. If these brands can raise more funds, it would result in increased budgets for big tech. I anticipate that more startups, especially those with recent IPOs, will be able to secure additional funding, leading to higher ad expenditures on these platforms,” Aggarwal resolved.

Diverging towards collecting data for retaining customers, we asked Aggarwal what would happen to third-party cookies.

Presenting a reply to the query, he said, “The focus has already shifted towards first-party data, especially with the ongoing discussions around pixel and cookie deprecation. Many brands are now leveraging technologies rolled out by Meta and Google. 

Meta offers the Conversions API, while Google provides Enhanced Conversions. These technologies allow brands to collect data from their website backend or offline stores and send it back to Meta and Google in a privacy-friendly manner using the offline Conversion API.”

According to Aggarwal, this approach eliminates the need to rely on third-party cookies, enabling brands to use their first-party data to optimise ad campaigns. 

Last but not least, the AdYogi executive spoke about the importance of developing a single view of the customer and the challenges that come with achieving a unified view of the customer.

Gathering his thoughts, he said, “A common challenge is that customer data resides in multiple tools. For example, CRM data, including email IDs and phone numbers, is stored in the CRM system, transaction data is stored in the website backend, and social data is stored in other systems. The bigger challenge is how these systems communicate with each other. 

With the advent of AI, it will become easier for systems to interact, although complex integrations are still difficult. Integrating data remains a significant challenge, and AI can help address this issue. 

However, the emergence of Customer Data Platforms (CDPs) is notable and has eased some pain, with many brands showing interest in what CDPs can do for them. However, there is a need for more clarity, as people are aware of CDPs but do not fully understand the problems they can solve. I see this as a significant trend in 2025.”