Back when I was in advertising, I lived my life by something I had read on a poster once which said, ‘Big shots are just little shots that keep on shooting’. And I try to implement this even today, right in the middle of the massive tornado that is the digital revolution. I still have the poster too!
Advertising as we know it has changed by a mile, and more. Earlier, all a client would expect is a storyboard for a TVC, a few print ideas that would have to be full of innuendos and implied meanings, and if the creative team is lucky (or not) some radio spots. Fast forward, circa 2004. Facebook had just launched and while Mark Zuckerberg never wanted ads to take over any space that could be used for connections and communications, little did anyone know that it was just the beginning of the way advertising would be perceived.
Going beyond Facebook
Just like you cannot point to one piece of content to tell what is and is not affecting viewership, you cannot attribute this entire whirlwind storm to just one networking platform. No doubt, Facebook was one of the stepping stones in this direction and advertising has changed the way content is being consumed on digital platforms. There is pre-roll, mid-roll, post-roll advertising. Vines. Pop-ups. Vertical, horizontal, roll-over banners. And for what? Just to grab three seconds of attention of someone who’s just browsing through the internet. She may not even be looking for what one is trying to sell her. Some call it genius; others, spam.
While this is what one would call a ‘regular’ internet user — comes online a couple of times a day, browses through some websites, updates her online profiles, does a little bit of shopping, and goes offline only to repeat this exercise a few hours later — we are more interested in what a ‘viewer’ is doing online. The OTT space has grown immensely in India in the past few years, and people are slowly but steadily warming up to the idea of consuming legal, value content as opposed to a downloaded torrent or a duplicate DVD purchased from a roadside stall. It is this person we are talking to. What does she look for online? What movie tickets does she buy? What Bollywood merchandise does she buy? Does she know all her favourite movies and more are available on one single application?
The monetisation dilemma
The viewer drives the OTT industry. And it drives us to the dilemma, is should we advertise to her? Or not? Advertising in the middle of a movie or a show is perceived as a disruption — one the user could easily do without. Having said that, the most difficult piece of the puzzle today for industry stakeholders is monetisation. Of the 319 million internet users in India, about 170 million have smartphones that allow them to watch video. At last count, about 100 million did so. In 2014, online video got ads worth `1,200 crore, over one-fourth of the digital ad pie. The FICCI-KPMG report says that the Indian M&E industry is expected to grow at a CAGR of 14.3% to `2,260 billion by 2020, with advertising revenues expected to go up to `994 billion at a CAGR of 15.9%.
The Indian online services market will grow on the back of advertising, even though online video advertising is only about a fifth of TV advertising today. If the market were to continue with the same ad pricing trends as today, online video advertising revenue could grow substantially. But the digital advertising business could go through a major overhaul and accelerate growth rates. The challenge for market participants will be in differentiation. Companies that will likely lead the market will be those with a strong regional content strategy. Providing interesting and varied content in different languages can draw consumers from across the country.
To sum it up, consumers are spending more time watching OTT TV each year, with most of this increase in video viewing coming at the expense of traditional channel distributors. It is projected that OTT video viewing will continue to increase by 32% annually through 2020. This, in turn, will boost the digital advertising market which is expected to grow to 26% by 2020. The future is digital, and it’s about time we accept it.
The author Rajiv Vaidya CEO of Spuul.