Amidst news that Netflix might be experimenting with ads and with YouTube aiming for a slice of the premium video market, the OTT space may be looking at a major overhaul. Even as OTT players are increasingly putting premium content behind a paywall, or adopting a freemium/ hybrid model, advertisers see OTT as a compelling proposition: a high quality, brand-safe environment allowing for targetted ads.
The prevailing concept that the SVoD model automatically implies no advertising, might now be challenged and could lead to innovative ad models such as ad funded content, subtle brand placement and so on, say experts. For example, Flipkart and Hotstar announced the launch of Shopper Audience Network that allows brands to connect with customers through personalised video ads on Hotstar.
Another player, Eros Now has tied up with InMobi to monetise its over 11.3 crore registered user base while still following the SVoD model. “While we will stay away from pre-roll and mid-roll type of ads or intrusive video advertising, we will be experimenting with new concepts. These include allowing brands to engage seamlessly with branded and high quality digital content such as dynamic in-content placement,” says Eros Now COO Ali Hussein.
The big picture
In fact, OTT ad buys are becoming integral to the brand strategy of organisations, with advertisers seeing this as a budget friendly option without compromising much on reach. Sports and live streaming on OTT has given a boost to this with cricket taking the lead followed by football. “Impact properties on TV like Bigg Boss, KBC, etc are also becoming big on OTT and advertisers who want incremental reach over their TV plans or advertisers who can’t afford TV are opting for sponsorships on OTT,” says Vinod Thadani, chief digital officer, Mindshare.
Currently, AVoD platforms provide multiple inventory options such as pre-roll, mid-roll and bumper ads (video, impact ads on homepages like mastheads). For example, VOOT uses its masthead not just for reach but also to drive clicks to purchase. If an advertiser opts for the VOOT masthead for a day, he can end up reaching the entire daily active user base of VOOT which is 50 lakh. “We see headroom for growth in the AVoD model. VOOT has seen a 150% growth in advertising monies year-on-year with more than 400 brand partners,” says Akash Banerji, SVP, head of marketing, partnerships and sales, Viacom’s VOOT.
Mix and match
Another OTT player ZEE5, which claims a 50% month-on-month increase in user base since its launch in February this year, is using a combination of video advertising, which includes pre-rolls, mid-rolls, non-skippable and skippable ads, and display banners. “While we have no advertising on premium content, having a freemium model gives a large base. The ability to provide profiled and segmented audiences makes it an attractive proposition for advertisers,” says Tarun Katial, CEO, ZEE5.
It is interesting to note that with increasing digital ad inventory, CPMs have being seeing a downward pressure recently, according to Girish Menon, partner and head, M&E, KPMG India. “However, premium properties on digital will continue to see robust ad rates going ahead,” he says.
In fact advertising (including search) is expected to form 95% of total revenues in the digital media industry, opines Ashish Pherwani, partner, and media and entertainment leader, EY India. “Digital ad rates are increasing for premium properties where native and interactive ad formats are being used,” he says. Clearly, this seems to be the theme, going forward.