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Will a newbie chatbot dethrone Google as the world’s favorite search tool

Digital media’s latest sensation ChatGPT is touted as one of the most significant developments in the world of Artificial Intelligence (AI) this year. Developed by OpenAI co-founded by Elon Musk and backed by Microsoft, ChatGPT has emerged as one of the most-used chatbots globally within a month of its launch. It can answer general queries, explain codes and scientific concepts, write basic academic essays and even script for rom coms, much more than what Wikipedia or Google Search offer at present. Tech experts feel that its evolved versions will pose a threat to Google Search business in the long run. 

How digital marketing is changing the way D2C market works in India

As India is almost nudging ahead to the pole position in population, it is also becoming an extremely lucrative market for Direct to Consumer (D2C) businesses, given the digital and eCommerce penetration. The way brands are building their business strategy has evolved with the times and with the rise of digital marketing, more and more businesses are taking the D2C route. This effectively means that they are cutting out the middlemen and selling their products and services directly to the customer. Digital marketing has changed the way consumers shop, especially in favour of the D2C brands, by making it within the reach of new-age D2C brands to drive the necessary brand awareness and intent, at scale at reasonable costs, thereby challenging the traditional brands in the space. By creating a consistent, cohesive and compelling online presence, brands are able to reach out to a larger audience with impactful communication. As a result, digital marketing is rapidly changing the way the consumer shops and is making D2C brands strong contenders for a larger share of the consumer wallet. Marketing is no longer about creating one-size-fits-all campaigns and hoping that your target audience will see and respond to them. With a detailed understanding of the online behaviour of the consumer, D2C brands are able to build awareness, and trust as well as induce trials among target consumers, by using a healthy mix of paid and organic tactics with compelling content. Today there are multiple channels, which play out in the digital marketing playfield, right from Search Engine Marketing (SEM), Email Marketing, Social (Facebook, Instagram, etc.) apps, and Affiliates. Each channel needs to be evaluated on the basis of the business objective set and geared accordingly.

Bengaluru leads in quick commerce app adoption in India

As the popularity of quick commerce rose through the year, platforms such as Swiggy’s Instamart as well as Dunzo shared details of what was ordered throughout the year. Instamart delivered over 4.38 crore packets of milk in 2022—milk was the second-most ordered item on the quick delivery platform operated by Swiggy. The most ordered item during the India-Pakistan World Cup match was, in fact, milk. Dunzo, too, said that milk remained the most-ordered item on the app across all cities. Swiggy analyzed data between January and November 2022. Instamart data showed that consumers in Bengaluru led demand on the platform in 2022. Overall, more than 50 users spent over ₹2,00,000 on groceries in a single month. A single user from Bengaluru spent over ₹16,60,000 buying groceries and essentials on Instamart. “While Bengaluru turned to quick commerce grocery the most in 2022, a user from Gurgaon ordered the most—1,542 times in 11 months—including repeat orders of instant noodles and full-fat milk,” Swiggy said in a note summarizing orders on its platform in 2022. Quick commerce platforms have found favor among consumers seeking convenience—meanwhile, companies too, have been pushing offers and better services to generate consumer trials.

2023: Quick commerce, consumer privacy, gaming and content to drive digital growth

These are the five trends we see dominating the conversation:

Acceleration on Commerce:

This trend started during the pandemic and it is seen that consumers are increasingly accepting the idea of buying online as purchase. Currently, it depends on category; for instance, the large FMCG and general purchases account for around 5%, while categories like food and more expensive items are obviously much higher. It is expected that within 2023, that number will come much closer to the 10% mark. So like we have the advent of brands like, Amazon, Flipkart, Big Basket obviously fueling this commerce, we expect to also see it accelerated by quick-commerce brands. 

Rise of D2C:

A lot of individual brands establish their own platforms and logistics for online purchases by consumers and this works especially well for companies that have a range of products, across categories. Currently, companies are getting investments to create and establish their digital resources, and we see the number only increasing in 2023. 

First Party Data:

This is again based on the conversation happening right now around consumer privacy. With Google announcing that it will soon be killing the cookie, and on the basis of that a lot of companies have started collecting first-party data and creating their own databases. This entire conversation is going to really accelerate as companies create the infrastructure.

OTT and Connected TV:

As far as entertainment is concerned, we have already seen the rise of OTTs and that category is here to stay. However, in 2023 this process is really going to accelerate as data and devices become more accessible. So we’re going to see a rise in the number of cord-cutters and shavers, consumers who turn increasingly to and in some cases exclusively towards OTT content for entertainment. 

Gaming and Metaverse:

Gaming has gained a lot of traction and there is today an entire ecosystem built around communities of gamers, gaming influencers, platforms, tournaments and so much more, all of which is working very well with youth cohorts. We believe that this is something that is going to become more and more mainstream in 2023. And then there is the entirety of the metaverse. What we are probably going to see in 2023, is a lot of flirtatious behaviour of brands towards the metaverse.

How 2023’s creator economy is shaping up

Data-led approach, AI and VR driven content, adoption of Metaverse to dominate influencer marketing in 2023. Once considered just a trend, influencer marketing is now increasingly becoming a significant part of a brand’s marketing strategy. As per recent industry estimates, India’s influencer marketing industry will be worth Rs 2,200 crore by 2025.  This projected growth can be attributed to increase in digital  adoption and the number of influencers, and more brands looking to create a personal connect with their consumers.

Tech and data-led approach 

Brands today make use of data-led approach and automated tools to help in better decision-making, rather than go by intuition. Social Catalyzers’ co-founder Kalyan Kumar says that there is an interesting trend of science and data-based decision-making. Platforms can provide massive transparency to brands in their influencer marketing decisions, through audience authenticity, quality of engagement, relevance, etc. This has encouraged CMOs to take a bigger, but measured approach to influencer marketing. These AI platforms will now help the brands to know whether influencers have fake or non-credible followers. 

Impact of increased regulations on influencer marketing

The Advertising Standards Council of India’s influencer guidelines states, “All ads published by social media influencers or their representatives, on such influencers’ accounts, must carry a disclosure label that clearly identifies it as an advertisement.” ‘Upfront’ and ‘prominent’ disclosure is required if any kind of material exchange takes place between a brand and an influencer. With great influence comes great responsibility and, hence, the influencers should try and ensure that the advertiser is able to substantiate any claims made in an ad. Influencer violations contributed to about 29% of the ads complained against, revealed ASCI’s annual complaints report for 2021-22. Owing to these regulations, content, especially ads or promotional posts, can be put under scrutiny and be flagged off in case of violation of consumer interest. 

Formalisation of creator ecosystem

With audiences getting access to a variety of influencers on social media platforms each day, there is a need to formalize the diverse creator economy to enable it to grow and remain profitable for all parties (brands, creators, influencers) over the long run. TDS of 10% would be levied on freebies and perks worth over Rs 20,000 received from brands for promotions, as per section 194R of the Income Tax Act. While some experts say that this is a step in formalizing the creator economy, others argue that it may hurt influencers. Indian creators and influencers are taking inspiration from their western counterparts by bringing in revenue directly from consumers and other channels. Hence, more than 90% of the Indian creator market relies on brand tie-ups. Singhal of Dot Media says that as influencers and their communities grow, they are likely to become brands. It is, indeed, true that with the formalization of this economy, brands will realize the need for good quality marketing, instead of just focussing on quantity. Formalisation will also have a larger impact on creators. 

The way forward

Short format videos, live streaming and content-led commerce will continue to be the dominant influencer marketing trends. Apart from this, AR/VR-led innovations will also see increased adoption by creators and brands, alike. With the organic reach of branded influencer content being limited, and the ever-evolving platform algorithms, Sawant of GroupM points out that it will become imperative for brands to amplify influencer content and draw better RoI from their content investments.

Big Tech and ‘sideloading’ debate; IT firms fear security, privacy breaches

The Competition Commission of India (CCI) slapped a Rs 936.44-crore penalty on Google in October allegedly for abusing its dominant position with its Google Play Store policy. That came close on the heels of another fine of Rs 1,337.76 crore also on allegedly indulging in unfair trade practices. The Parliamentary Committee on Finance presented a set of recommendations to rein in Big Tech with a digital competition law. Sundar Pichai (Google’s CEO) has said that some part of the CCI ruling would be a setback for user privacy and security and he called out the government saying technology needs “responsible regulation”. The crucial ruling goes beyond just penalizing the company, which Google is expected to challenge in court anyway. CCI’s order to permit app developers to distribute their apps through what is known as sideloading has brought India to the forefront of the global debate in countries such as the US, Japan, Korea and in Europe on how to rein in the growing domination of Big Tech. Sideloading is a way for app developers to load their applications without going through formal stores such as Google Play for Android phones or the Apple App Store for iPhones. Such a move would break the domination of the two big boys and spur competition in the app space.

Facebook parent Meta will pay $725M to settle user data case

Meta  has agreed to pay $725 million to settle a lawsuit alleging the world’s largest social media platform allowed millions of its users’ personal information to be fed to Cambridge Analytica, a firm that supported Donald Trump’s victorious presidential campaign in 2016. Terms of the settlement reached by Meta Platforms, the holding company for Facebook and Instagram, were disclosed in court documents filed. The case sprang from 2018 revelations that Cambridge Analytica, a firm with ties to Trump political strategist Steve Bannon, had paid a Facebook app developer for access to the personal information of about 87 million users of the platform. That data was then used to target U.S. voters during the 2016 campaign that culminated in Trump’s election as the 45th president. Uproar over the revelations led to a contrite Zuckerberg being grilled by U.S.lawmakers during a high-profile congressional hearing and spurred calls for people to delete their Facebook accounts. Even though Facebook’s growth has stalled as more people connect and entertain themselves on rival services such as TikTok, the social network still boasts about 2 billion users worldwide, including nearly 200 million in the U.S. and Canada. The lawsuit, which had been seeking to be certified as a class action representing Facebook users, had asserted the privacy breach proved Facebook is a “data broker and surveillance firm,” as well as a social network. The two sides reached a temporary settlement agreement in August, just a few weeks before a Sept. 20 deadline for Meta CEO Mark Zuckerberg and his longtime chief operating officer, Sheryl Sandberg, to submit to depositions. “Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program,” said spokesperson Dina El-Kassaby Luce. “We look forward to continuing to build services people love and trust with privacy at the forefront.”

House panel seeks to rein in Big Tech firms with digital competition law

The Parliamentary Standing Committee on Finance has presented a set of recommendations to rein in Big Tech companies through a digital competition law for regulating anti-competitive practices on their platforms. The report underlined the need for ex-ante regulations — which are cautionary and based on anticipated changes or activity — and said the government must frame a definition for Systemically Important Digital Intermediaries (SIDIs) that need tighter regulations. The classification could be based on revenues, market capitalisation, and the number of active users. Technology behemoths such as Alphabet (which owns Google), Meta (which owns Facebook), and Amazon are among those recognised the world over as Big Tech companies that act as crucial digital intermediaries. The panel said a top tech company must not “favour its own offers over the offers of its competitors when acting as mediators.

‘Private Cryptos Can Cause a Financial Crisis’

If cryptocurrencies are allowed to grow, they would cause the next financial crisis, RBI Governor Shaktikanta Das warned. According to Das, the RBI views private cryptocurrencies as a 100% speculative asset that should be prohibited. “If you try to regulate it and allow it to grow, please mark my words, the next financial crisis will come from private cryptocurrencies,” he said while speaking at a conference. “Cryptocurrency has certain huge inherent risks for our macroeconomic and financial stability, and we have been pointing it out. After looking at the latest episode of FTX (the bankrupt cryptocurrency exchange), I don’t think we need to say anymore,” the RBI governor said. Unlike any other asset, or any other product, “our main concern about the cryptocurrencies is that it does not have any underlying (asset) whatsoever”, the governor said. RBI has vehemently opposed the proliferation of private cryptocurrencies, to the extent of advising the finance ministry to opt for a complete ban on the system. So far, the finance ministry has opted for taxing holders of such cryptos.

Google India’s profits triple in five years, at Rs 1,238 crore in FY22

More than half of Alphabet’s revenue (Google’s parent company) came from Google Search in 2021, even though its share from advertising subsidiaries and YouTube advertisements is increasing. Earlier this month, an apex court in the European Union ruled that any citizen can ask search engines such as Google to delete any outdated or sensitive information on them. Google, which dominates the search engine market, channels 3.3 trillion searches each year and stores about 3,600 petabytes of data on 1.8 billion of its Gmail users (as of 2021). One petabyte can hold about 223,101 high-quality movies. More than half of Alphabet’s revenue (Google’s parent company) came from Google Search in 2021, even though its share from advertising subsidiaries and YouTube advertisements is increasing. Google’s advertising subsidiaries and YouTube ads accounted for about 40 per cent of Alphabet’s revenue in 2021, up from 25 per cent five years ago. Google India’s profits triple in five years, at Rs 1,238 crore in FY22. An analysis found that though most of Alphabet’s revenue in 2021 — 45.7 percent — comes from the US, its growth has slowed over four years. Meanwhile, the revenue share from Europe, and the Middle East and Africa (EMEA) is almost twice that of the Asia-Pacific (APAC) region, but it is the latter that is growing at a faster pace. The company’s profits in India have multiplied three-fold in the last five years. It registered a net profit of Rs 1,238.9 crore in FY22 compared to Rs 407.2 crore five years ago.

5 martech trends for 2023

Generative AI goes mainstream

OpenAI’s ChatGPT might be getting the most attention, but tools that use AI to generate text have picked up a lot of momentum this year. Notion, a productivity platform that has seen users top 30 million in the past year, announced it will embed AI into its software. That means personalization will get a boost too. This is now the ability for these tools to dynamically generate cohesive content based on demographics, firmographics, technographics, psychographics, behavioral insight signals, engagement histories, and experimental cohorts. Marketers activate cloud data warehouses – A unified data strategy has been a goal of marketers for years, and technologies like customer data platforms (CDPs) have helped. But at the bedrock are cloud data warehouses that allow teams to house and analyze all of their data. That’s changing. It’s not just a static repository, but it’s becoming an interactive component in our stack. Data warehouses are increasingly supporting personalization by connecting customer relationship management platforms, CDPs, and more. And the types of data now being housed at the warehouse level are expanding. Ecosystems and communities bloom – While dominant platforms like Adobe, Salesforce, and HubSpot have very large app ecosystems, even niche software tools offer libraries of apps that connect to their services. As these grow, they’ll offer a few benefits:These software tools will allow teams to move beyond “suite versus best-of-breed” thinking and focus on adding functionalities through partner ecosystems. As ecosystems surround most tools in martech, the ability to customize your services increases exponentially. The continued rise of no-code, in-house creators – No-code tools like Airtable, Bubble, and more are giving marketers the tools to build apps, experiences, and more without programming. The metaverse will still be experimental (but AR and VR have momentum) This year started with huge buzz surrounding Web3 and the metaverse. Here’s what we’ve seen: Snapchat has put a lot of emphasis on AR as a differentiator from other platforms, including recent campaigns for the World Cup and the latest “Avatar” movie. Adoption still has a ways to go. Only 13% of US adults have used AR or VR while shopping, data from Bizrate Insights shows. But when we actually look at the evolution of virtual reality (VR) and augmented reality (AR) technology, that’s getting better and better every year.

5 retail trends that will shape 2023: social commerce, retail media, and more

TikTok and Gen Z will shape social commerce: TikTok, but that’s been helped by Chinese parent ByteDance, which has been pretty successful at ramping up social commerce in China. Next year, TikTok will add nearly 10 million social buyers, nearly two times the combined increase for Facebook, Instagram, and Pinterest. The driving force behind this growth is Gen Z. TikTok’s discovery-first approach meshes with how Gen Z approaches commerce. Mid-tier brands face an uphill battle. As inflation and recession concerns put a squeeze on spending, consumers are beginning to rethink how they shop and budget. For one, value-based and discount retailers are thriving. Walmart, Dollar General, and TJX have all had stronger-than-expected sales this year, while foot traffic in general is up at discount and dollar stores. On the opposite end, the luxury fashion category continues to grow, outpacing total retail. Unfortunately, this leaves the middle in the lurch as its core audience either spends less or shops elsewhere to save money. These mid-tier brands (think Macy’s, Kohl’s, Bed Bath & Beyond) are the most at risk heading into 2023. Retail media is the third wave of digital advertising. We forecast that retail media spending will approach $60 billion by 2024. While the category is led by Amazon (which has more than 75% of ad revenue share), there’s still opportunity for other players, said Canaves. Though retail media started out on-site, it’s moving off-site and up the funnel to formats like display, video, and connected TV (CTV). We predict that CTV initiatives from Amazon, Walmart, and Kroger will gain momentum in 2023. Return policies will make or break loyalty. Like most ecommerce trends, Amazon set the standard for free returns, which every retailer has tried to mimic. As margins tighten, some like H&M or JCPenney have decided they’re no longer going to eat the cost of returns. But many large retailers are continuing to follow in Amazon’s footsteps and are even introducing new options to remove friction from the returns process. As the number of returns goes up (boosted by an increase in bracketing behavior), customers will look for the cheapest, easiest way to do it. And cost isn’t the only factor; convenience will also be key in keeping consumer loyalty. The cost of business weighs on retailers. It’s not news that consumers want low prices and stakeholders want high profits. But never has it been harder for retailers to deliver both. Among those struggling the most are direct-to-consumer (D2C) brands. Ultimately, the solution is going to lie in the mix between D2C and wholesale strategies.

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