Lockdown pushing OTT platforms to advertise on TV?
According to a TAM AdEx report on advertising of OTT platforms on television, the ad volumes of the platforms grew 98 per cent in Jan-May 20 as compared to Jan-May 2019
The two-month-long lockdown caused by COVID-19 brought the country to a standstill.The pandemic badly hit advertising mediums such as OOH, theatres and print. But the absence of these mediums during the period has surely turned out to be beneficial for television. Advertisers, especially OTT platforms that use these mediums more for marketing and advertising, have now moved to TV.
According to a TAM adex report on advertising of OTT platforms on television, the ad volumes of these platforms grew 98 per cent in Jan-May 20 as compared to Jan-May 2019. Also, the number of OTT platforms has increased from 24 to 41 for the same period.
Experts believe besides the absence of most advertising mediums, other factors that led these platforms to advertise on television more were the increased time spent on digital and the absence of original content on television.
“Given the lockdown, the time spent on digital has increased. Smartphone usage is up by 10 per cent over pre-COVID time. Time spent on movies via smartphone grew by 48 per cent and originals by 69 per cent . Additionally, the original content has been switched off, fueling movement towards OTT behind paywall. Hence, the increased advertising of OTT. Given that this is the time they can bring in new users, they have begun advertising,” shared Rachana Monteiro, General Manager, MediaCom.
As per the report on monthly trends based on ad insertions of OTT platforms, in the year 2020, April witnessed the highest advertising of OTT platforms. The ad insertions of OTT platforms surged by 3.2 times in May 20 as compared to May 19. Also, the average ads per day for OTT platforms grew by 2.14 times during the same period.
“Covid and the subsequent lockdown created a lot of shifts in the content consumption habits across demographics. Lack of original content and live sports on one hand and more time to spend on the other led to a lot of experimentation and sampling of new content destinations. And this is where OTTs, both AVOD & SVOD, benefitted,” said Kishan Kumar Shyamalan, Vice President, Wavemaker India.
He further added, “The surge in spends is the reflection of benefit in action. OTTs did both platform advertising and title advertising and the combination led to this incremental spend. There was a need to stay on top of mind and hence platform advertising. There were also some great titles that hit the screens, hence the need for title advertising. I see this continuing for a while as OTTs are still not becoming habitual viewing for a vast majority. It is still led by titles; loyalty hasn't kicked in yet. OTT libraries still have to be exposed to large numbers of viewers. Moreover, the battle has now moved to regional where national & regional players will lock horns. Finally, a lot of broadcast and film houses have OTT interests and hence this will continue. Hence, I feel OTT ads will keep hitting TV screens for a while. And both for professionals and viewers, it is not a bad place to be in.”
Another interestng development was that the count of OTT platforms increased by 50 per cent in May 20 as compared Jan 20. The number of platforms grew from 22 in Jan to 33 in May. As per the report, a total of 25 new OTT players advertised on TV during Jan-May 20 as compared to Jan -May 19. Meanwhile, new OTT player Disney + HotStar had 24 pr cent ad volume share among all in Jan-May 20.
Even though this indicates that the rise of ad volumes of OTT platforms on television is exponentially high, a similar increase in the revenues or ad rates is not refleced.
“The ad revenue needs to grow a lot more. With live sports being washed away, OTT players will see an additional gap in revenues too. However, the market is such that if they don’t give the right pricing at the moment, they will lose out to the other OTT competition. With neck-to-neck competition and infinite inventory, it is a huge task for the OTT players to increase the ad revenues,” explained Sujata Dwibedy, Group Trading Director, Amplifi India.
Sharing similar thoughts, Monterio said, “No, it will not lead to any increase. As the large categories of FMCG are down by 60 per cent, no increase of OTT advertising can lead to an increase of rates. Also, the larger OTT platforms are using their parent companies' TV channels to advertise. Hence, it's internal adjustments more than real investment in TV advertising.”
According to the report, the top five OTT platforms that advertised on television in Jan- May 20 includes Disney+Hotstar with the highest number of ad volume shares of 24 per cent. The platform was launched in March this year. Amazon Prime Video is the second platform that advertises on television and accounts for 15 per cent share, followed by Zee5 on third number with 14 per cent share, Voot App with 12 per cent share and Hotstar with 8 per cent share. The top five OTT platforms during Jan-May 20 together had 74 per cent share of Ad volumes.
Meanwhile, though Amazon Prime Video maintained its rank in Jan-May 20 and Jan -May 19, the ad volume decreased by 16 per cent in 2020. On the other hand, VOOT app has slid in its rank but increased its volume share by 50 per cent.
While speaking about the spike and about VOOT Select- a subscription service which was launched in March 2020, Ferzad Palia, Head – Voot Select, Youth, Music and English Entertainment, Viacom18, said in the current scenario, for the last two months since the lockdown, we have been concentrated on two mediums: TV and digital. “Because of the redundancy of the mediums like outdoors, print in the current scenario and radio which is sort of redundant to an extent, the two mediums which are clearly available to reach out to the audiences are digital and TV. Hence, a lot of our spends got diverted to the mix, heavily skewed towards TV and digital," said Palia.
He also mentioned that the media mix at VOOT Select varies from campaign to campaign and usually the platform opt for four-five mediums. He said, “The OTT consumption has significantly gone up and premium OTT services, especially those that have original content, are the beneficiaries.”
A look at the top five OTT platforms that advertised on TV in Jan-May 2019 shows the presence of MX Player and Netflix . However, they were not there in the top five for the same period this year.
Talking about it, Abhishek Joshi, Head of Marketing & Business Partnerships, MX Player, shared that Feb 2019 was the launch period for MX Player and hence the spends were higher. “Last year we did a grand launch and obviously the marketing spends were much higher for a new product,” he said.
He further said that MX Player, since the pre-COVID days, follows a 360-degree marketing approach; from outdoor, radio, traditional TV, associations with influencers to digital. "It also depends on the story, the narrative of what the series is about? Based upon that, we decide the strategy. There is no fixed media mix that we follow," he shared.
"The advertising of OTT platforms on television has increased because with work from home and school and colleges shut down, the consumption of OTT has gone up. People are spending more time on TV and mobile. It has also obviously become the preferred choice of advertising to reach consumers. At MX Player, we have launched around 12 shows from March first week till now,” he added.
Though it is the redundancy of other mediums that has led OTT platforms to advertise on TV, it is believed that even after the lockdown is lifted and people start going out and original content comes back on TV, the advertising might remain the same.
“The growth will stabilise at some point and the pace of increase post the lockdown would slow down. The growth will continue also on the back of newer players and fresh & regional content. Sustainability would matter. Audiences are consuming a lot more content. Subscriptions are driving quite a lot of the revenue but advertising revenue has not grown in the same trajectory. Also, though the leading OTT players are able to demand the subscription price, new players are yet struggling for revenues,” concluded Diwbedy.
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