Over 10% of India’s homes, which translates to approximately 20-22 million, were CTV households in 2022, a number that is expected to nearly double by 2025 to reach 40 million, as per a report by GroupM’s Finecast and Kantar. About 90% of the TVs sold last year were smart TVs. India’s overall TV penetration currently stands at around 70%, projected to reach 76% by 2026, which will make it the third-largest TV market in the world. There is still scope to grow in 90 million non-TV households in the country.
What does this shift mean for advertising?
The explosion of smart TVs is powering the growth of CTV ad spending. As per a GroupM Kantar study, advertising spends on CTV are expected to reach $395 million in India by 2027 at a CAGR of 47%, offering a massive opportunity for advertisers. Globally, multichannel TV ad revenues are expected to reach $45 billion in CY25 from $43 billion in CY22, says a Statista prediction.
CTV’s offerings span refined audience insights, tailored targeting, enhanced engagement rates, and the ability to connect with households through large screens, says Paras Mehta, business head at Matterkind India, Interpublic Group’s programmatic arm. As of 2022, brands devoted an average of just 1% of their total digital ad expenditure to CTV advertising but Mehta adds that this figure varies across brands. “Advertisers consistently seek platforms aligning with their target audiences, and CTV is no exception. Notably, CTV campaigns have consistently delivered success, yielding incremental reach and frequency. The expanding landscape of OTT (over-the-top) services encompassing AVOD (advertiser video on demand), SVOD (subscription video on demand), and free ad supported streaming TV (FAST) offers advertisers compelling avenues. Furthermore, interactive advertising formats are on the horizon,” notes Mehta, adding that FAST is poised to become the catalyst behind the growth of CTV ad spending.
The current trajectory of CTV expansion is equivalent to the ascent of HD channels a few years ago. The prospects for advertisers on CTV are driven by factors such as affordable smart TV availability, access to wi-fi, diverse regional content, live sports, and short-form videos.
The and-or dilemma
Households with smart TVs tend to be more affluent than linear TV households, thereby making their reach limited, remarks Yatin Balyan, managing partner and national head of media investment at Omnicom Media Group India. “The user experience on CTV is akin to that on TV, considering that the output device in both cases is the same. Despite the different modes of distribution of content (digital versus satellite), the impact of advertising on CTV and linear is also comparable, with linear TV having a greater reach due to limitations in the affordability of premium TV sets and data connectivity. That said, with the CTV audience base continuing to grow, we will see immense growth in its reach in the near future,” says Balyan.
CTV audiences are also expected to take up some share of mobile impressions in the future. Balyan notes, “Although video consumption is currently higher on mobile, an increase in CTV viewership indicates a growing population of affluent audiences, leading to increase in the percentage of ad spends on CTV.”
Finecast’s report notes that linear TV is still growing at 9.7% in the country, the CTV boom notwithstanding. On an average, CTV consumption time of 12.4 hours a week isn’t very different from the average linear consumption time of 12.6 hours.
The rise of CTV hasn’t been at the cost of linear, points out Shantanu Bhattacharyya, senior VP, digital strategy planning and client success, LS Digital, given that both are in fact coexisting and contributing to a growing viewership landscape. “We might have a situation in households where there might be multiple ownership. Tech-savvy, younger family members may be on CTV, while older household members may be more comfortable with traditional, linear TV, making the landscape very interesting. The reach of CTV is stronger in urban areas and tier-I markets since these markets have the innovators and early adopters but as the product lifecycle matures, we will definitely see growth coming from smaller markets,” he observes.
The entry of players like Jio Fiber and the subsequent drop in data costs have further catalysed CTV adoption. CTV presents a strategic hub for brands to engage with the video-first millennial and GenZ consumers. Bhattacharya adds, “Enhanced measurement frameworks and precise targeting on CTV provide brands a competitive edge and measurability, making it an indispensable channel for advertisers, harnessing a blend of demographic reach and sophisticated analytics.”
Why advertisers are adding CTV to their media mix
· The number of Indian CTV households was 20-22 million in 2022; expected to reach 40 million by 2025
· About 90% of the TVs sold last year were smart TVs
· CTV offers refined audience insights, tailored targeting and enhanced engagement rates
On the flipside
· The reach of CTV is still limited largely to affluent, metro and tier-I market households
· Linear TV still has a larger reach, and is growing at 9.7% in the country
· Consumption on linear TV is 12.6 hours a week, while CTV consumption time is 12.4 hours a week
Source: Industry reports