According to reports from E&Y and AC Nielsen, online video advertisement market is set to grow exponentially at 300 per cent in 2009 and has 85 per cent higher brand recall, as compared to 54 per cent for the same ad on television. It is also estimated that the online video advertising market in India is around Rs 60 crore a year.
The rapidly growing online video market in India is said to have changed the entire concept of viral marketing in the country, and with the launch of 3G and increase in broadband penetration in Tier II and III cities, this form of advertising will get a boost. Online video advertising is already making its presence felt and there have been claims of having more users and reach in comparison to niche TV channels.
One recent example is that of Vodafone acknowledging the growing importance and power of the Internet medium and running it campaign only on the Internet, giving TV and print medium a miss. Vdopia, one of the largest premium online video and mobile advertisement networks, served the Zoo Zoo campaign through its video ad platform across its network. In the scheduled three days, the campaign was run on premium news, entertainment and sports media portals/sites and claims to have recorded more than one million video views.
Some other brands that are known to use online video advertising include Airtel, Aircel, Tata Communication, Reliance, Maruti, Honda, Mahindra, and Cisco, among others.
exchange4media speaks with some industry honchos to find out more on how online video advertising was impacting viral advertising and the road ahead.
The change in perception
Saurabh Bhatia, Co-founder and Chief Business Officer, Vdopia, explained, “As per the E&Y report, the industry is currently pegged at Rs 60 crore a year and expected to grow at 300 per cent year-on-year. In terms of acceptability of the medium, we have seen a lot of change in the advertisers. Earlier, the questions we usually faced were, why online video advertising? But, today the question is how much should I put in online video advertising? However, the true revolution in online video advertising will come when offline media would see online video as part of its TG or the 30-second strategy. While some have started using online video in a big way, nevertheless the big change will come only when more and more brands jump into the bandwagon.”
“We are probably the world’s first company to launch video advertising network on iPhone in the US. We believe that mobile in perhaps another few months will play an important role in expansion of online video advertising market and 3G India launch will only add to that growth,” he added.
Rahul Nanda, COO, Webchutney Studio Pvt Ltd, observed, “Video ads are becoming more and more popular. The entry of more players in India proves online video ads’ capabilities as affordable marketing solutions, especially for SMBs, even if video ads tend to be used more for buzz value than lead generation. Mobile will play a crucial role in taking online video advertising a step further. I believe, MMS usage itself is a very small percentage of the MMS capable handset users, but once density of 3G users increase over the next few years, we will see video ads taking a leap.”
On a different note, Sunil Nair, Founder and CEO, Nautanki.tv, said, “The market is still in its infancy and most of the providers of online video advertising are still battling the online advertisers, instead of expanding into non-online advertisers and regional advertisers. Plus, the fact is that the branding aspect of online video ads is hugely discounted by agencies, who insist on performance-based parameters. One needs to bear in mind that the consumer has come to watch the video content and not the ad and is certainly not going to click and go away to fill a form. He is willing to watch the 30-second commercial because premium content is free for him. We have to respect our consumer more than what we currently do.”
He further said, “3G will be the game changer. However, there is still some time to see what happens when entertainment becomes very personal and intimate.”
Raj Menon, COO, Contests2win.com, too, said that video advertising in India was still in its infancy. He added, “In developed markets, video banners are the most effective banners with click through rates touching 6 per cent. In India, because of our choked bandwidth conditions, video advertising is reduced to uploading ads on YouTube and forwarding the links to your friends, family and colleagues. When 3G happens, it will be an important driver. But it all depends on the how much it costs the consumer. India is a very price driven market.”
Impact on viral advertising
Vdopia’s Bhatia noted, “Online video is actually redefining the entire concept of viral advertising, because unlike in the past, where you had no means of popularising the viral ads – because for any viral to become popular, it has to reach a critical mass, which itself is a challenge – with the rapid growth in online video advertising, the viral ads can be sampled by the critical mass. Consequently, the viral begins to have an impact on the users. This apart, even the technology allows users to share the ad with their friends.”
On a different note altogether, Webchutney’s Nanda said, “To break free from banner ads, we created animated virals. Now to differentiate virals, we create video-based virals.”
Contests2win’s Menon pointed out, “I believe YouTube has changed the way consumers consume video online. According to Comscore data, YouTube is the No. 1 Indian entertainment site with 10.5 million consumers. It beats any traditional media brand hands down. Consumers found the content there engaging enough to viral it out. The first thing that brand managers think of when they think video is TVC. Unfortunately, that does not work online.”
Nautanki.tv’s Nair pointed out, “In 2008, 8 per cent of all traffic generated on the Internet was through streaming content (music and video). This year, it is likely to be 22 per cent. Online video is emerging as the next media, which, if exploited properly, can rejuvenate the television broadcast industry. Brands have looked at just the viral bit of videos and yes, online videos have contributed to brands looking at it with a tiny fraction of money. We did a campaign for Samsung a month ago and it generated 500-odd comments and touched some 35,000 people on Facebook in a week. That is very effective branding and viral use of videos. These videos were watched some 1.5 lakh times in total. It just gives you an idea as to how powerful something like this can be, if allowed to be built effectively.”
The road ahead
Bhatia of Vdopia noted, “From where it is today, online video advertising can only go in the northern direction. Online viewership is growing, and that is what is important. Ironically, the Internet as a medium in India was not sold in the right way. The penetration of the Internet in Tier II cities is another challenge. Nevertheless, one critical trend we see in this space is that content is king and distribution will be God. The lines between television buying and online video advertising buying has started to blur. We believe the reach and number that we deliver are at par with some of the niche television channels and we are ready to take those channels head on.”
Nanda of Webchutney said, “Currently, there are not many platforms available to run video ads, hence we need more publishers. The media space needs to mature before we can talk serious numbers. Broadband penetration will help increase usage, but again, the numbers are not that big to create a big impact on advertising spends. The other challenge we face is in terms of measurability as it still has complexities, though it can be as effective as TV advertising. We will also have to move away from a CPM-based model to more qualitative ways of measuring video ads effectiveness.”
He further said, “With the growth of broadband in India pegged at 500 per cent in the next five years, we are sure to see more acceptance of video based ads and virals. Video ads will be the next big thing in online marketing in the future, and advertisers who are used to television will appreciate the measurement capabilities of online video ads.”
Nair pointed out, “Brand owners have to start looking at the value that the visibility of the video ads provide. Getting into a tangle on performance might look good in the short run, but it will kill an exciting media in the future. The challenges really are not to look at the kind of content that is consumed and then aligning the brand to that content, the way television advertising has done over the years.”
He further said, “Blanket online video ads on a few portals will not work, instead one needs to explore where the real consuming people are – on social media and on web spaces. Eventually, content will rule. So, those who combine content and distribution of the content will have a huge advantage. The future trends will be brands sponsoring full series, instead of just random ads on non-related content.”
“Illustration and animation will very slowly give way to video. So the future is of video virals, video games and video entertainment. Bandwidth prices are crashing the world over, and sooner or later this benefit will be passed on to consumers, who will consume content (branded or otherwise) on demand,” concluded Menon on an optimistic note.