People can now choose to consume ads only when they feel the desire to: Industry Experts
Advertising industry experts spill the tea on whether OTT platforms and their premium service paywall pose a challenge for advertisers or not
Published - 01-April-2019
In India, there has been a rise of users opting for OTT platforms like Netflix, Amazon Prime and Hotstar and the trend of prime time television is slowly deteriorating. Even music streaming services like Spotify and Saavan are gaining momentum and possess a large number of subscribers.
According to the Boston Consulting Group, the Indian OTT industry will unlock its potential and reach a market size of $5 billion i.e. Rs 35,730 crores by 2030.
A research firm Deloitte and Indian Music industry body IMI has recorded that there are 150 million subscribers for music streaming services in the country. These platforms are gaining popularity and have become more accessible to audiences in Tier 2 and Tier 3 cities as well. The access to these services has grown due to cheap data provided by services like Jio. These OTT platforms and music streaming services are user-generated and allow the user to take control of what they want to consume. They also give users the liberty to block ads on these platforms so they can consume uninterrupted content.
exchange4media had a chat with advertising industry experts about the premium service paywall on OTT platforms and music streaming services; and whether they pose a threat to advertisers.
Change in consumer behaviour
Anand Chakravarthy, MD, India, Essence, comments, “Consumers are becoming a lot more demanding of service providers and are willing to pay a price for the more relevant experience. Across online platforms we see the rise of premium services be it OTT, Music, Food Delivery, Travel bookings, etc. There is a growing segment of consumers who will pay an extra cost to ensure they get a more customised experience which includes exclusivity, ads free and additional services.”
Ankit Nalotia, Founder, Mo Mantra, shares his views saying, “The year 2018 has seen tremendous growth in these platforms along with the level of variations they are offering. Subscription-based on-demand OTT platforms like Netflix, Amazon Prime and music streaming have risen in popularity over the past couple of years and are on the path of displacing the traditional TV programming which was once upon a time preferred as a medium of entertainment for modern Indians.”
Consumers don't hate ads, they hate irrelevant ads. “There can be times when the consumer doesn't want to see ads. Advertisers need to understand and acknowledge this instead of getting paranoid. Just because a consumer is online doesn't mean he is available. Every human being needs 'space' and moments of ad-free privacy,” remarked Raghu Bhat, Founder & Copywriter, Scarecrow M&C Saatchi.
Conventional advertising relies hugely on latent desire, building a desire for products and services even if they did not actively exist. Agnello Dias, Co-founder, CCO, Taproot Dentsu stated, “With the rise of OTT platforms, people can now choose to consume ads only when they feel the desire to purchase, not when the advertiser wishes to. This will, therefore, be a huge challenge.”
Will this be an issue for the Indian market?
Commenting on this Chakravarthy said, “This does not mean that 100% of consumers will go down this route, especially in a market like India and its vast digital population. That leaves ample opportunity for advertisers to talk to consumers across other digital platforms. What may happen over a period of time is that a limited segment of high-income individuals may become more inaccessible as they opt for premium digital services across digital touch points and reaching these individuals may become a challenge. But this will take a while to happen in India.”
“Most of these platforms have a very small market share. Most users don't have paid subscriptions and allow ads,” remarked Nalotia.
How will advertisers deal with this emerging issue in the long run?
Sumanto Chattopadhyay, Chairman & Chief Creative Officer, 82.5 Communications, The Ogilvy Group shares how to curb this issue, “When ads aren't allowed in a particular medium, brands rise to the challenge and find innovative ways to make their presence felt. For example, on Netflix, it is through product placements that brands compensate for the lack of ads. Flaming Hot Cheetos has a prominent role in the prison drama ‘Orange Is the New Black’. One of the episodes actually has the brand name in the title and the snack plays an integral part in the story. In another Netflix show, House of Cards, a plethora of brands, including Chevrolet cars, Apple computers, Samsung phones and the news channel CNN make an appearance.”
Bhat says that the solution lies in making less annoying ads. He remarked, “Do branded content and avoid the digital advertising overkill mindset.”
This shift in viewer sensibilities also reflects in the growth projections for the country’s OTT industry. “This is actually a bigger opportunity due to the possibility of personalisation. This will remain an ad-driven-supported model. However, it will only increase over time. Hence, newer avenues for advertising will have to be discovered. Apart from this, there would be always a window for content based marketing and in-film advertising on these platforms,” stated Nalotia.