Is Connected TV getting its due in the festive advertising pie?

Media agencies say brands are increasingly showing interest in Connected TV advertising this season, but is it translating into a surge in CTV campaigns? e4m analyses 

e4m by Kanchan Srivastava
Published: Oct 20, 2022 8:37 AM  | 6 min read
Connected TV

In 2022, Connected TV viewers in India have spent an average of 4 hours daily watching content, as against 3.5 hours in 2021. Nine out of 10 TVs sold in 2022 were Smart TVs. These are some of the data from the latest report by mediasmart, an Affle company, titled ‘India Says Yes to Connected TV!’.

The report also highlights that Connected TV (CTV) ads are impactful as 9 in 10 viewers of CTV recall being exposed to ads; 81% users admitted that the ads influenced them and improved their purchase intent.

However, despite enormous advertising potential in this space, CTV advertising has been a largely untapped market in the country. There seems to be a shift though. An increasing number of brands have shown interest in advertising on connected TV this festive season, multiple media agencies and sector experts told e4m.

Rajiv Rajagopal, National Head – Client Development, Finecast India (GroupM), says, “Brands are encouraging integrated media planning that marries the reach and impact of CTV with digital capabilities like precision targeting and building relevant audience cohorts. We are seeing a 40-50% surge in demand this month and expect this trend to continue post-festive as well.”

Other agencies are also witnessing an uptick in CTV ad budgets.

Umesh Shashidharan, Media Director Planning, and Operations, FoxyMoron (Zoo Media), says brands have upped their ad budgets for Connected TV anywhere between 10 to 15%.

“With the overall Smart TV / Connected devices base increasing, the general interest levels on CTV advertising is rising gradually. New native ad experience, linear reach extension through players like Samsung Ads, home screen ads which got started on Amazon Firestick sometime back are getting popular and extended to other players,” says Srinivas Rao, Chief Investment Officer, Wavemaker India.

Paras Mehta, Business Head, Matterkind India, noted, “Newer ad formats, meaningful and sharper targeting options are the newer offerings. Industrywide, there is a dedicated focus on making the CTV offering more valuable and making it part of the standard digital offering.”

Ad volume up in festive period, but not this year: TAM

Connected TV offers opportunities for advertisers where they can get strong consumer insights on viewing habits and also target specific cohorts to drive the brand message effectively and efficiently.

Moreover, pricing of smart TV is currently very competitive in India compared to other global markets. Average smart TV sets are currently available at a price range of Rs 5,000-Rs 10,000. This should be the ideal time for marketers to enter this space and build an awareness-to-engagement funnel.

That is not the case, at least this year, if TAM data is to be considered.

Statistics obtained from TAM indicate an uptick in CTV ad volume – it grew by 40% in 2021 and by 70% in 2022 (till mid-October) compared to 2020 (when this ad domain was in its nascent stage). The data also indicates higher ad volumes during Q3 in 2020 and 2021, which coincides with the Indian festive season.

However, it doesn’t reflect such growth in Q3 of this year. In fact, it has come down to the level seen in Q2 of 2020, which was the lockdown period when advertisements had dried up across media.

This suggests that the increased interest among advertisers is somehow not translating into actual marketing campaigns on the platform so far. However, things may change in the next few days ahead of Diwali.

Limited data on AdEx

The festive trend and observations of media agencies are crucial and have the potential to boost the connected TV advertising in the coming days. However, it won’t be possible to measure the trends in advertising spend on CTV. Reason: there is no data available with regards to advertising spend on CTV.

Prabhvir Sahmey, Senior Director, Samsung Ads, India & South East Asia, says, “The AdEx reports released by different ad agencies annually club the CTV AdEx under the online video streaming head which includes OTT, YouTube among others, that too across devices.”

The industry doesn’t even have a methodology to measure the AdEx on connected TV, Sahmey adds. This is despite the fact that CTV devices in India currently stand at an estimated 20-25 million, which is more than 10 percent of the 210 million linear TV devices.

In terms of viewership, the Connected TV’s reach is far bigger than the number of devices as many linear TV owners also watch digital content using fire sticks and other devices.

However, this medium is getting a miniscule share in the overall AdEx of TV which is to the tune of Rs 30,000 crore. Sahmey pegs the CTV AdEx figure at Rs 600 crore. He clarifies that although the figure could be way off the mark, but it is nowhere close to 10 per cent.

Top Categories

According to TAM data, connected TV makers like RealMe, Amstrad, BPL and Haier, are the top advertisers on the platform.

With E-commerce, fashion, Tech, and premium brands being early adopters, media agencies are now seeing consumer durables, retail, and FMCG as well as adopting Connected TV advertising and seeing it drive efficiency in their media plans, Rajagopal noted.

“Netflix would have been a great new advertising opportunity on OTT (CTV) for brands but now that it's not open for India it's a little bit of a miss,” says Shashidharan.

What gives an edge

Connected TV plays a crucial role in building an addressable TV ecosystem. Brands use CTV for sharper targeting and relaying their message to a captive audience in a clutter-free environment. In addition, CTV advertising offers a higher rate of conversion.

Rajagopal explains, “Brands seek CTV as a medium to run longer ad formats that are cost-effective, thereby building high brand awareness and audience engagement. CTV advertising is evolving with tech interventions like ACR (Automated Content Recognition) giving more insights into the type of content being consumed at a household level.”

The concept of multi-viewing on the big screen and that too especially on non-skippable inventory available through programmatic has a lot of takers. Brands are willing to give dedicated budgeting to ensure they can create a high impact this festive season, Shashidharan opines.

Moreover, Connected TV presents advertisers with unique opportunities to get creative with their ad formats, such as pause ads which appear when the user hits pause during a stream, integrating QR codes in commercials and inserting ads into television content. Mobile phone TV also plays an integral role in making the CTV ad experience richer and more interactive.

Brands are aiming at precision targeting this festive season, and there is no better way to do it than through connected TVs, says Sahil Chopra, Founder & CEO- iCubesWire. “The advertising spend for Connected TVs will leave any other medium behind, given it brings the precision of digital and big screen of the TV under one roof,” he adds.

Krishna Menon, COO, QYOU Media India, echoes the sentiments, “As a result of increasing attention from advertisers, the medium will further prosper in an innovative and effective manner. In times to come, it will become imperative for all stakeholders to strategically cater to this exponentially rising consumer growth trend for a progressive future."

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