2015 has been eventful for the advertising industry in India on many counts. Keeping this in perspective I would like to call 2015 the year of MCP — Measurement (or the lack of it), e-Commerce and Programmatic. All three have seen large-scale changes, moving in directions that have impacted or will impact the way the industry operates in the future.
Entry of BARC
BARC, with its promise of a superior TV measurement system, and the tantalising possibility of a unified video measurement system, suddenly got everyone excited. With more than 45% of India’s AdEx at stake—that is the share that TV advertising commands in India today — the excitement was expected and entirely justified.
The increased sample size that BARC promised was a welcome improvement. BARC’s foray into TV ratings for rural markets was long overdue and a pressing industry need. Unstinting support and participation from all three industry stakeholder bodies —IBF, ISA and AAAI — gave the industry the confidence that the project was indeed on its way to success. While the excitement and optimism continues, it is important to note that 2015 was just the beginning and BARC still remains a work-in-progress. 2016, one hopes, will bring positive closure to this critical intervention on measurement.
E-commerce business models
E-commerce with its big bang launches, big budgets and even bigger hopes was the industry to be associated with in 2015. The major part of 2015 was certainly wonderful for the e-commerce industry — it was talked about, envied, visible everywhere and probably did good business. The stresses in the industry began to show towards the later part of the year resulting in a few closures and shutdowns. Doomsayers had an “I told you so” twinkle in their eyes. The optimists were quick to assert that failures were a part and parcel of every industry.
There are many who question the business models that e-commerce businesses are built on. Maybe their concerns are valid, maybe not. To an outsider, this looks like a bubble that could burst any moment. The dotcom bubble comes to mind. It is important to know the failure of the dotcom bubble was not such a bad thing after all.
The massive over-investment in data infrastructure — that was done during the peak of the dotcom boom — definitely helped the world adopt digital at a faster pace. I would like to think that the e-commerce bubble, if it indeed is one, is a far more calculated and thought out business as compared to the dotcom business. I am sure whichever way it goes, success or bust, our industry will definitely learn and gain. 2016, I think, will create a divide among the e-commerce players themselves. Some will surely flourish spectacularly. The rest will fall by the wayside.
The programmatic front
The year also witnessed a quiet revolution on the programmatic front.
In a year, over 30% of digital inventory (from almost zero in 2014) was available for purchase programmatically. Suddenly the machines were taking over and for once, everyone was welcoming and participating in this change.
India has been slow in moving into programmatic. Markets like Australia, Europe and North America have moved faster into the programmatic space. India is playing catch-up, but the speed at which we are moving makes me believe we will be at par with the rest of the world by the end of 2016.
My confidence is on the basis of what I see happening in the industry in 2015. Audience profiles are being collected at a frenetic pace. New programmatic platforms are being launched.
Demand for talent that understands programmatic is seeing a spike.
My estimate is around 70%-75% of digital inventory will be bought programmatically next year. Other media inventories too will be available to be bought programmatically — TV inventory, for sure. This year too has had its share of changes, with MCP just being three call-outs, which I felt were potentially path changing.
As we move into 2016, it will be interesting to see how our industry adapts to and behaves around these trends. That however is material for another story.
Debraj Tripathy , Managing Director, MediaCom India