Facebook has grown beyond just a simple social networking website but a way to learn about the audience preferences and a vital marketing tool for brands. Is it possible that Facebook can overtake TV as a preferred advertising medium in the not so distant future in India?
Facebook’s rapid growth as an advertising medium
Currently, Facebook has a reach of more than a 100 million in India. This is dwarfed by the 535 million broad reach of television in India. The reach of television has been possible due to the close to 55 years that it has enjoyed since its introduction in the country. However it has been 10 years since Facebook’s inception and has achieved rapid progress in the short span of time. The fact that it allows two-way communication with the audience is something brands had never experienced before with advertising on TV.
According to Vivek Bhargava, CEO, iProspect Communicate2, “Unfortunately effectiveness of TV has been declining by a few percentage points every single year. In the last 20 years, effectiveness of TV has reduced significantly. Facebook on the other hand started as a medium that had limited reach, the initial ad units had very limited engagement value, however its effectiveness has been growing exponentially the last five years”. The reason he cites is firstly the advent of video advertising units on the social media site with even more engagement value that TV, secondly, the targeting of niche and specific audiences and lastly, user choice on whether they want to watch a commercial or not.
Zafar Rais, CEO, MindShift speaks about how Facebook is fast emerging as a means for brands to reach out to the different age groups grasping online content through various forms. “Advertisements are strategized with the goal of reach and recall and hence deciding if TV is better than Facebook is very crucial. Facebook works wonders in reaching out and gaining insights on the campaign and the product or service launched, especially towards a 15 to 35 year old audience. TV, on the other hand, still has a stronger foothold when it comes to urban and rural audiences when the objective is mass outreach,” he adds.
Suveer Bajaj, Co-founder & Director – Media Operations, FoxyMoron said, “Another reason for Facebook being an effective medium over TV is the cost efficiency benefit it provides. TV sells Gross Rating Points (GRPS) and Facebook sells them via Cost Per Unique Reach (CPUR). Hence, CPUR when optimised correctly can be substantially lower than TV and can either contribute to an incremental reach or to a diminished relative CPUR saving.”
Do brands get what they are looking for on Facebook?
Facebook is rapidly broadening its reach and at the same time honing its selective targeting of customers.
Giving a marketers perspective on it Ramesh Chembath, AVP – Marketing and E-Commerce Head, Godrej Appliances said, “Brands use digital media to achieve both (mass reach and selective targeting). It varies for different categories and also depends on the campaign objectives. While big impact properties like page takeovers, masthead on YouTube or Yahoo login billboard are used as reach builders, specific targeting options are used to reduce spill over from selected geography or demographic profiles in many campaigns. On Facebook, brands do both large and specific targeting as it has a large enough base for mass marketing and many built-in targeting tools for specific targeting.”
Commenting on brands choosing between mass reach vs. selective targeting Ajay Kakar, CMO, Aditya Birla Group said, “Brands want to reach out to large audiences but ideally they would like to segment their communications. For instance, a brand wants to capitalise on Diwali but it should show Diwali the way it celebrated in the North and the way it is celebrated in the South. So those days where we had standard ads going on national television should and will change. Facebook will slowly but surely extend its reach but today TV is still a first medium of choice.”
However, according to Anisha Motwani, Director, Chief Marketing & Digital Officer, Max Life Insurance for mainstream brands where reach is currently keenly looked at, TV is the most effective medium. “When you’re looking at a popular mainstream large brand with national presence, Facebook could never substitute television till now because it is still a niche medium. There is only 12 million population of internet users in India and we are actually targeting a 60 crore. Internet doesn’t even reach there. But for luxury brands and premium brands who are targeting younger people it might still be worthwhile.”
Be that as it may, according to Preetham Venkky, Head Digital Strategy & Business, KRDS Singapore, Facebook is currently in the process of finding a solution to the problem of rural reach through an initiative called Internet.org. He says that this initiative allows people to access the internet through mobile phones without the need to spend more money on large data plans. With leading companies partnering in the organization it hopes to explore solutions for providing affordable internet solutions to remote regions.
Ad spends for Facebook are increasing
While television currently occupies the maximum ad spends for a brand, ad spends are now increasing on Facebook.
Refuting this Rohit Gupta, Multi Screen Media (MSM) said, “There is no comparison between the two mediums. Facebook is a very niche medium in the digital space and is continuing to do well because their strategy is in the zero base. This definitely doesn’t eat into television advertising because television touches 800 million people, whereas the whole digital medium only touches 200 million. Facebook is a very metro phenomenon and is a more male dominated, whereas television is more female, family inclusive and its spread is far more. Television touches all age groups and all strata of society at every income levels. They (TV and Facebook) complement each other. They don’t eat into each other’s market share.”
Similarly, Anooj Kapoor, Business Head, SAB TV said, “TV and Facebook will probably co-exist and marketers will continue to integrate both to have a much more meaningful and impactful conversations with everyone. Look at the advertising spends on the offline channels (mediums), you will see that they haven’t been disturbed. Revenues have increased in the last 4-5 years.”
However, with people today paying more for subscription channels that show content without ads increasing and online TV channels such as Netflix airing ad free content there will be a shift in ad spends from TV to Facebook and other digital mediums in the future. “TV spends still top the chart, but Internet is the fastest growing medium in terms of spends as well as user base and it is definitely eating into the pie. As digital media enables real-time measurement of campaigns and specific targeting options, we are seeing a trend where slowly but surely brands are consistently increasing their digital spends,” said Chembath.
Similarly, Sanjay Mehta, Business Owner & Jt. CEO, Social Wavelength says, “TV ad spends are way higher than Facebook ad spends at this time. But what we clearly see is a sharp rise in spends on Facebook. And now, with Facebook advertising enabling interesting targeting features, rich media content and extremely sharp targeting besides the enormous reach, we will clearly see a shift happening from traditional advertising and on to digital advertising as a whole and Facebook advertising in particular.”
“As television is losing its effectiveness, I know tens of clients who are reducing their TV budgets and increasing budgets on Facebook and other digital mediums. How consumers started consuming MP3 instead of CDs, or digital photographs instead of developing rolls, they would consume internet content from their TV sets and not be aware of the difference. There was a time when print was a dominant medium, TV in-spite of being a late entrant came and became a dominant medium. The same is bound to happen to TV through digital. I am sure that a few years down the line, digital spends would be larger than TV spends in India,” adds Bhargava.