The conundrum of an Indian advertiser in the digital age

According to the BCG-CII report video is driving the digital growth in India but throws interesting challenges to Indian advertiser

“Advertisement dollars continue to flow in but a subset of advertisers starting to turn cautious,” reveals the recently released BCG-CII report. The industry report titled “The Trillion(and growing) Touchpoint story – recognising the monetisation conundrum” states that the country has witnessed a two-fold increase in digital video consumption. However, users opting for the subscription base is still small.

A similar insight was shared by the KPMG M&E India 2019 report. (Read: Is the subscription model paying for OTT and music streaming apps in India)

OTT and Audio Streaming Apps Revenue Projections

The subscription model in India is in a sorry state. OTT video is gaining some ground but the music streaming market is solely dependent on advertising. Indians love content but they want it for free. In fact, Indians are ready to watch ads than pay for content. (Read: Indians want music but for FREE)

Unless you were living under a rock, the video market has been gaining share within the digital pie. The growth of smartphones and the availability of cheap data are the two big drivers of its success. With demand increasing, the market has already more than 30 over the top(OTT) players and over 10 music streaming apps in India.

Almost every other report out there has been speaking the same language. However, the BCG-CII report dwells into the Indian marketer – expectations, spends, and concerns. This article finds more about the Indian marketer and how he is looking at the rising digital growth.

Video is driving digital but retention is an immediate challenge.

Additionally, the biggest concern for an advertiser is the gap between the share of digital and eyeballs. In India, TV is one of the trusted mediums because consumption is matched by the spends. Digital has enough ground to cover.

BCG CII Indian digital 2019

Visual attention is a concern for TV. According to the report, advertisements in digital video are able to retain more visual attention than traditional TV. “55% of viewers use TV advertisement time in multitasking, switching screens or skipping content. In comparison, mobile advertising commands more viewer attention.”

Today marketers are looking for improved targeting, real-time tweaking, better return metrics and less expensive. One of the reasons why spends are gradually shifting to digital. “100% feel digital platforms enable more granular targeting and 83% feel digital provides quantifiable return metrics that justify the investment.”

With the digital meeting, the expectations of today’s marketer, most of them are shifting to programmatic ad buying. The report highlights that 57% of digital video advertising in India spend is expected to have shifted to programmatic by 2023. A trend that is already growing in countries like China and the US.

Nonetheless, the reason for marketers flocking on digital is already a concern. One of the key concerns that marketers have raised is self-reported metrics and ad-fraud. “67% feel self-supported metrics raise mistrust.”

Inflated Facebook video views have been a concern for advertisers and media companies. In 2016, Facebook disclosed to top advertising partners that it has been mistakenly inflated the average time people spent watching videos. Now it is reported that Facebook is settling with the advertisers that sued the social network over its video-metrics malfunction. However, Facebook denies all charges and instead doing a settlement because it wants to move on from the costly litigation.

According to the latest report released by the Mobile Marketing Association states 62%, mobile ad fraud remains one of the biggest challenges in India. Titled “Ad Fraud Benchmark Report” further states that the Indian marketer spends nearly 20% of its advertising budget on ad fraud. “Major types of ad fraud – Cookie Stuffing (74%), Adware Traffic(65%), Data Fraud(61%), and Ad Injection(54%).”

Another concern that has developed in the last couple of years is brand safety. With the steady rise of fake news, extremist content and brand advertising appearing next to content that the brand has no control has now become a big global problem.

The problem surfaced in 2017 when the Times reported how big brands are funding terror through programmatic. Later it was revealed YouTube serving ads against videos featuring child abuse and worrisome scenarios. Thereafter we have seen brands like Mars, Diageo, Adidas, Nestle, Disney freezing their advertisements on the platform temporarily.

However, Indian marketers have been slow to employ brand safety. Speaking to Financial Express, John Montgomery, EVP-Global Brand Safety, GroupM further stated that cost has been one of the concerns for Indian marketers.

“Our challenge is to be able to convince clients that by employing brand safety technology, we can not only make their brand safer, but also make the advertising work harder. It is not enough for us just to talk to clients about limiting risks; we need to talk to them about the effectiveness as well.”

According to GroupM, globally the risk of digital ad fraud is $22.4 billion. “In India, our teams are estimating ad frauds to be around 10-15%, which is too high. We can bring it down to a single digit by measuring and blocking bot traffic and other fraudulent tactics. There are three basic elements to brand safety — measure, benchmark and optimise.”

Digital is growing more than any medium in the Indian Media and Entertainment (M&E) industry. Consumer demand is at hand and it will grow. However, it is up to the advertiser how she encashes from the demand and improves the advertising revenues. Additionally, the concerns raised are justified but simply adopting programmatic won’t be the solution.

“The trillion touchpoints continue to grow along with the advertising dollars but the expectations from the industry also keep on rising. The coming year is truly pivotal for the industry as they seek to raise the bar once again in possibly challenging times ahead.”