2024 - a year of cautious growth for the Indian advertising industry

As we conclude another year, it is essential to reflect on the key developments, challenges, and achievements that have shaped different sectors throughout the past 12 months. 2024 has been marked by dynamic shifts, rapid innovation, and the continued adaptation to external factors and emerging trends.

Adgully’s annual feature – REWIND – revisits different sectors and identifies the key developments as well as gauges the long-term impacts of those developments. We speak to a cross-section of industry leaders to bring a 360-degree view of the industry landscape, growth trends, financial performance, disruptions, innovations, challenges, and more.

In this REWIND 2024 article, Sudeep Singh, Senior Growth Manager, Moloco, shares his insights on how the year 2024 has been for the Indian advertising industry and the Indian economy as a whole, besides throwing light on the trends and developments that dominated the sector advertising industry during the year, and more.

Relook at Advertising industry in 2024

2024 has been a year of cautious growth for the Indian advertising industry. Following a post-COVID surge of ~40% YoY from $10B in FY21 to $14B in FY22, growth slowed to 12% in FY23 and further to 5-6% in FY24, with total spending projected at ~$18B. Digital ad spending, while increasing its share to ~55% of overall spending, also saw a slowdown, closing at ~$9B projected for the year. The deceleration mirrors challenges in the Indian economy, where GDP growth slowed to 5.4% in Q3, a seven-quarter low, due to subdued private consumption and weakening global demand.

The intersection of these economic challenges with advertising sector performance underscores the impact of macroeconomic and sectoral headwinds. Geopolitical tensions have reduced PE/VC investments, leading to constrained advertising budgets across industries. Additionally, the introduction of a 28% GST on the Real Money Gaming (RMG) sector—a major driver of digital ad spend—has curtailed anticipated growth, forcing companies to recalibrate their strategies. However, the industry has shown its ability to withstand such shocks and is now well poised to grow at a rapid pace as we enter 2025.

Sector-wise recap

The advertising industry has shifted to a 1:1 personalized, performance-driven ecosystem powered by sophisticated machine learning algorithms (ML). While consumers seek a seamless, non-intrusive ad experience, advertisers aim to boost ROI, brand recall, and increased velocity to profitability and this is when companies need world-class machine learning systems to support them. Moloco uses operational ML that works on an advertiser's first-party data and helps them show hyper-personalized ads to users while also optimizing bid prices and probabilities in real-time - that is tough, but when done right, can be valuable to both advertisers and customers.

The gaming sector, where Moloco is a leading player, with over $1B+ of ad spend in 2024 contributes to ~10% of India's digital ad spend. The 28% GST on RMG has increased costs, driving a shift to ROAS(return on ad spend)-based campaigns with a focus on high ARPPU(average revenue per paying user) users and improved LTV/CAC. Brands are focussing on Localization through regional languages, micro-influencers, and relevant creatives. Additionally, to counter seasonality, RMG brands are diversifying into categories like fantasy cricket and Ludo. Remarketing has become essential, as retaining users is 5x cheaper than acquiring new ones, making it a core strategy alongside user acquisition.

The Quick commerce sector, led by Blinkit, Swiggy Instamart, and Zepto, has been a key growth driver in 2024, with competition from entrants like Flipkart Minutes, M-Now from Myntra, Amazon - Tez, and many others now increasing. Advertisers are increasingly focusing on hyper-localized targeting via geo-fencing, personalized content, and increased spending for festive promotions during high-demand periods. Leveraging Dynamic Product Ads (DPAs)  which helps to reduce cart abandonment with tailored recommendations. A shift towards customer retention, with a 70:30 UA-to-remarketing split, ensures higher AOVs and sustainable growth.

Sectors like finance, audiobooks, entertainment, and social among many others thrive on personalized, data-driven strategies. In finance, performance marketing focuses on customer acquisition through tailored campaigns. Audiobooks leverage regional content and influencer marketing to drive engagement, while social platforms benefit from user-generated content and short-form video ads. All sectors emphasize real-time marketing, AI-driven insights, and customer-centric approaches to maximize engagement and ROI.

Key trends and developments

The advertising industry has transitioned from traditional mass-brand advertising to ML-driven, personalized ad experiences, emphasizing digital transformation and outcome-driven strategies. Advertisers have started to move beyond the usual metrics of CPMs (cost per 1000 impressions) and CPIs(cost per installs) and now focus on data-driven metrics like Share of Voice(SOV) - Share of Market (SOM), Value of users, incrementality and brand penetration to drive profitable growth!

Key Macro Trends in 2024

Growth of Quick Commerce and Stability of RMG: Quick Commerce led by the Big 3 experienced significant growth with GMV skyrocketing from US$500 million in FY 21-22 to US$3.34 billion in FY 23-24. The changing consumer behavior and the rise of an on-demand economy by a tech-savvy population are aiding this growth spurt. Real Money Gaming (RMG), despite regulatory challenges like the 28% GST, stabilized as companies have adjusted and focused more on profitability and improved break-even periods.

Penetration in Tier-2 and Tier-3 Cities: With internet penetration expanding in Tier-2 and Tier-3 cities and digital population reaching ~900M by 2025, advertisers increased focus on these regions. Localized and vernacular content became critical for engaging these audiences, leading to a surge in region-specific campaigns and creatives that catered to diverse linguistic and cultural preferences.

Operational ML and Gen AI: Advertisers have shifted significantly from low-cost alternatives to advanced ML-driven platforms to drive incrementality for every dollar spent. Operational ML does this by optimizing ad delivery by ensuring the right message reaches the right user at the right time improving efficiency and ROAS. Generative AI revolutionized creative production, enabling advertisers to scale personalized campaigns quickly. AI-driven content creation reduces time-to-market while ensuring high-quality and contextually relevant ads are curated.

Moloco’s journey in 2024

Over the past decade, Moloco has focused on an advertiser-first approach, using advanced ML, algorithms, and data insights for precision targeting, personalization, and scalable real-time solutions. Moloco ranked in the top 5 across multiple categories in the 2024 Singular ROI Index, earning a spot in the ‘Golden 6’. AppsFlyer’s Performance Index 17 recognized Moloco as a key partner for growth beyond walled gardens, particularly for iOS performance. Highlights include being a top 3 platform overall, top 3 for non-gaming, and top 4 for gaming in the Global Power Rankings.

Moloco ads partner with some of the largest apps across various categories in India, driving high-quality user growth. Our partner Zupee achieved 5x growth and 3x return on ad spend using our ML engine. Rummytime from the Gameskraft group saw a significant increase in high-value users, while Jar grew their paid user base by 7x on the open internet.

KukuFM tripled its premium trials in just six months. We also helped CityMall build an in-house advertising business, boosting ROAS by 900%. A standout achievement was our multi-year partnership with Viacom18 and JioCinema, where our ML and ad-serving expertise ensured a seamless experience during high-profile events like the Tata IPL, handling peak concurrency of 32 million views. Additionally, we’ve recently entered into a strategic partnership with LG Channels FAST(Free Ad-supported streaming TV) for its India launch, utilizing cutting-edge ad-serving capabilities.

What Moloco’s clients say

Akanksha Dhamija, COO, Growth & Strategy, Zupee:

“Moloco Cloud DSP stands as a prominent performance platform, earning our trust as a valued partner at Zupee. Moloco’s innovative solutions have been critical in optimizing and achieving our marketing endeavours.”

Divya Alok Agarwal, Director, Rummytime:

“Moloco has been an exceptional partner in our mobile advertising journey. Their innovative approach, leveraging machine learning, delivers personalized ads that resonate with our audience, resulting in improved performance and ROI. Moloco stands out for their deep commitment to our marketing success, offering not just a service, but a partnership that drives growth.”

Suraj, Head - Performance Marketing, JAR:

“Moloco enables JAR to achieve our user acquisition and ROAS goals. Its user-friendly and efficient dashboard makes launching and managing campaigns super easy versus other platforms. The team provides tailored solutions to target the right audience with efficiency resulting in improved ad performance.”

Sachin Kumar Singh, Associate Vice President, KukuFM:

“Collaborating with Moloco has transformed our marketing efforts, as they are one of the few partners consistently achieving our KPIs. Their advanced machine learning technology, exceptional support, and actionable insights have empowered us to optimize campaigns effectively and drive significant growth.”

Pulkit Jain, Business Head, CityMall:

‍“With Moloco Retail Media Platform, we’re able to provide our merchants with a tool to increase sales via advertisements while improving the user experience through highly relevant product offerings.”

Also Read: Decoding Consumer Trends 2024: A Marketer’s Roadmap to Success