Why is Big Tech turning to small advertisers?
Tags : “By rolling out user-friendly tools and attractive financial incentives these corporations are not just expanding their user base but are also empowering small businesses to carve a niche in the digital realm. This inclusivity fosters a dynamic advertising environment where small entities can leverage sophisticated marketing tools once the preserve of their larger counterparts ” he says saying the implications for ad revenues are significant as this diversification can lead to a broader more resilient revenue stream for platforms mitigating risks associated with overreliance on big spenders. SMEs which have been consistently contributing around 30% to India’s GDP now constitute a substantial portion of the digital adex accounting for up to 40%. Priyanka Randhawa Associate VP - Strategy Lodestar UM says “Tech giants Google and Facebook derive over 30% of their ad revenues from SMEs. Amazon with 2.5 million SMBs and Flipkart also benefit significantly from SME ad revenues. This symbiotic relationship underscores how tech giants provide accessible platforms for SMBs to engage with consumers cost-effectively. SMBs leverage tech platforms due to their low entry costs precise targeting capabilities and higher returns on investment.” Bhattacharya notes that this shift in focus towards small businesses is in part a strategic response to the deceleration in ad spending by traditionally large advertisers. This recalibration reflects a broader industry trend where companies are seeking to diversify their advertising portfolios beyond digital mediums. “As growth in digital ad spends by major players shows signs of plateauing Big Tech's outreach to smaller businesses can be seen as a forward-looking strategy to sustain growth. This approach not only compensates for the slowdown from big spenders but also anticipates future shifts in advertising dynamics ” he says. Looking ahead while traditional brands continue to embrace digital marketing for brand building and performance SMEs are expected to intensify their focus on digital platforms for bottom-funnel initiatives. Projections indicate robust growth in digital adex with SME spending expected to grow over 20% outpacing overall digital adex growth of 13-14% annually according to Magna estimates. “Unlike legacy brands that prioritize ROI across all mediums SMBs actively harness digital channels to expand their reach and enhance brand awareness. Major tech players like Meta and Google facilitate brand discovery while e-commerce platforms such as Amazon and Flipkart facilitate sales for SMBs. Government initiatives such as exempting small businesses from compulsory registration on online marketplaces further incentivize SMBs to allocate more funds towards digital marketing ” says Randhawa. Dhaval Gupta MD of CMRSL the parent company of CMGalaxy (an AI-driven Saas product) also believes that the big tech companies of today are significantly different from those of yesteryears. The shift has occurred from merely being technology providers to actively becoming ecosystem builders. This transition also implies the need for effective strategies to weather downturns. “In the face of the challenging global macroeconomic environment Big Tech has intensified its focus on acquiring new clients. The onboarding of new clients is directly correlated with the rollout of new product offerings. Such situations offer tangible opportunities for small businesses to experiment and grow. Small and medium-sized businesses (SMBs) often represent the largest growth opportunities for Big Tech. Therefore it becomes crucial to actively engage with small businesses creating a win-win scenario for all stakeholders.”