'YouTube will continue to be catalyst for creative revolution in this country'
In part two of his first-ever interview in his new role, Sanjay Gupta, Country Manager Google India, gives us more insight about YouTube, ad market growth and his journey so far
Today, we bring you the second part of the two-part interview with Sanjay Gupta, country manager and vice president sales and operations at Google India. In his first-ever interview since he took up the new role, Gupta speaks to exchange4media about the unrivalled position that YouTube continues to hold despite immense competition in the OTT space. With COVID hitting the Indian economy, Gupta discusses the silver lining for the advertising industry in the backdrop of a drastic increase in screen-time. He also addresses the perception of Google being the tech behemoth and its share in the digital advertising market. To conclude, he discusses with us the challenges of settling in a new role in the times of Corona. Below are edited excerpts:-
Q: With over 40 OTTs been launched in the last few years, how do you make sure YouTube continues to be a leading brand?
YouTube is in a very interesting place at the moment. Two things YouTube has done brilliantly in this country. First is the diversity of content that is unmanned in India compared to any other platform. Secondly, the democratization of content creation is the real big issue globally and even more in India. What I mean by diversity is that if you look at TV content today, it is fundamentally entertainment content and now in some way, topped up with the news. What we have learnt over the years and if you look at YouTube consumption online in India started with entertainment to begin with like Bollywood Music and some shows.
But what it moved into in a very interesting space was “experiences”. On YouTube, you realize there is a multifacetedness of the talent in this country. You will see therefore the amount, width and depth of content experiences. Things which have never been explored are done through YouTube.
The third piece of content is education and learning because that is what Indians desire. YouTube has created a pool of content of entertainment, experiences and education which makes them have a diverse set of content. No one in the market today has all of it.
Content creation has been a prerogative of a very few in this country. What YouTube has done, however, is saying if you can use a mobile, you think you are creative and can create content I’ll help you make money out of that. Today we have 2.5k creators in India who have one million followers. So, the funnel of content creators has changed from almost hundreds to million in the last 10-15 years.
The content strategy that we have is very different from what others do. We want to play in the area of creating millions of content creators and unleash the creativity of this content enabling it by providing technology and tools for them to create that content. The vision we see for the future of content is billions of creators and the best of technology being deployed. YouTube should continue to be the catalyst for a creative revolution in this country.
Q: Short videos have been a big hit in recent times and are giving similar yet quicker content-creating opportunities like YouTube the common man. What is your view on short videos?
We have just launched YouTube shorts in India. This is the first country in the world to launch shorts. It also showcases the focus on India and how we want to solve for India differently. It is in the same philosophy that enables creativity to be unleashed. We are doubling down to provide young creators with easy tools and we will see Google continue with its ongoing strategy.
Q: Advertising industry was hit immensely by COVID but to a certain extent the slowdown began even before. How do you see the overall ad market growth in India in the next three years?
Before I answer that, I want to discuss two big attitudinal shifts that have taken place in the society in the last few years. And COVID has accentuated them further. There is a big attitudinal shift in the society in the way mobile is perceived. Now, it is your personal screen. Secondly, how much is it used to make payments. As of last month, the number of mobile banking transactions through UPI was reported to be seven crore a day.
So far the content consumption of India had not grown for over two decades. Given that the number of screens has gone up dramatically from 20 crores to 65 crores on the back of 45 crore smartphones, the amount of consumption growth that you will see on content using mobile phones will just keep growing. This will be true for everyone be it Hotstar, Netflix or YouTube. We will see the consumption grow from 3 ½ hours per day per consumer on an average put together will go 7 to 8 hours depending on how much data capacity can be increased through 4G or 5G because it will be individual streaming.
The business models can now be many including subscription as a business model. So, though the TV industry had been built on 70% advertising and roughly 30-40% on a subscription, in digital that 40% was missing. So both advertisements were limited and subscription was missing fully. Now, due to these changes of consumption and payment, the market is going to explode on subscription plus advertising put together in a very dramatic way. Different companies will have different strategies around them.
From an advertising industry point of view what it does is if you get a lot of consumers to come on digital to consume any content it will equally target consumers. During COVID, people’s concern on cash has gone up and everyone wants to conserve their money.
Digital provides now at scale the opportunity to target. Therefore, you don’t need to target every consumer who is watching a show every night or a match or a TV show. You can now decide that you want to talk to only 10% of them and do it effectively.
This will allow for an explosion of consumption of content but also an explosion in advertising revenues driven by digital. The forced change because of the ongoing environment the small and medium enterprises are adopting the technologies faster than big companies. Both the adoption of technology and the ability to target will put SMEs online in a very dramatic fashion. When I look back at a 3 to 5-year trend, I see the advertising businesses growing dramatically much faster than the last 5 to 10 years on the back of these fundamental shifts of consumption, payments through subscription models that will emerge and the fact that people can target consumers and conserve cash. Advertising even in the short term in the next 2 or 3 quarters will look tough and dire but with these fundamental changes advertising, is set to grow dramatically.
How much will COVID-led slowdown affect the projected growth numbers?
The reality is that our per capita income decreased last quarter when GDP came down and that hurts the spending ability and marketing money. Even though incomes came down, a lot of expenditure on travel or buying also reduced. Still, the ability to spend on the things that I desire has still not come down dramatically. So consumers may not eat in a restaurant, but if they want to order good cheese on Amazon, they would. The spending won’t down in some of the core areas people care about.
The second big change is retail. People use to buy stuff from their next-door grocery store and now the growth of e-commerce for these items has grown in the last 6 months. The businesses, which are now growing, are those that are spending marketing money. The businesses that are not growing are the ones that weren’t spending marketing money earlier.
New markets are emerging like fintech, e-commerce, ad tech. There are players in ed-tech who are now creating products that have never existed before. They all have the potential to become over a billion dollars businesses.
Given the trajectory of your growth, perhaps you are likely to become 2X of the size of most media companies. That kind of enormous size and power concentrated in one company sometimes become a concern for other businesses. How is Google India dealing with the rise in power and keeping away from competition?
The real business for us is the advertising business and the other business approach is the Cloud business which is from our point of view. In both these businesses, our share of the total market is still very small. So digital is only around 25%-30% of the total market and we have a share of that digital market.
We are a small share of the total advertising market. Similarly, when you look at Cloud there are much bigger technology companies in India, which are much bigger. So I think our share in the market in both the advertising and the technology cloud front where we are enabling businesses to transform is a very small share of the total. So from an Indian perspective, I don’t see that we are so big at this moment.
But we are an important part of consumers’ life and people deeply care about us. When COVID happened, one of the big things we did was getting the right information to the consumers on what COVID means to them. A lot of time was spent on providing the right information and getting it through in different languages and adapting to mobile and audio formats. We did a partnership with Vodafone where people could call a number and learn more about COVID. In those few months, we got close to 4 billion queries in India on COVID.
We also did a very big thing on Google maps on enabling food shelters in the country. There were many food shelters but people did not know how to go out and find it. We worked in partnership with many state governments to ensure that Google Maps had the location for it. In hundreds of cities, centres were created and thousands of people could use Google Maps to get there. Google Pay alone for the PM care fund collected over Rs 120 crore on the back of many people donating.
For me, the most important thing, because we are an important part of the consumer’s life, is ensuring that we are doing something meaningful and valuable so that we are helping the society and being responsible in everything we do. This is where our mission also comes in play to make the internet available for a billion Indians. Revenue and business will follow if we are doing the right things so that the consumer’s affinity remains.
You will soon complete your first year at Google. How did you navigate your new role in a pandemic year? What has your journey been like this year?
This has been a unique year for me, to be honest. I joined in January and we went on work from home early March in India at Google. Eight weeks, when I could physically travel, I went to all the offices in India in Mumbai, Gurgaon, Bangalore and Hyderabad. To get deep into an organization you need to know people well and understand the business well. I must say that the silver lining for me is that COVID accelerated my learning curve. The good thing was that since we went digital, the physical world couldn’t constrain me. Given things went digital, I could meet people not only in India but anywhere in the world at the click of a button. We formed cross-functional teams in India for the response team to COVID and we were meeting every day virtually. Therefore, the engagement and depth of engagement that happened with people in India and abroad went up dramatically. That is quite contradictory to the expectations even I had at that time where I had thought it will take me much longer to learn about people and the business.
However, I’m still in a learning phase but I’m blessed that I’m able to engage very deeply and people at Google have welcomed and embraced me in a very positive way. It has been a 10-month journey of huge learnings and in some way, using the power of technology in a small way through Google to help the society has been impactful. We took Google Readalong deeper in the world on the back of COVID and GPay because people needed it more during this time.
We did a lot of innovation on YouTube be it on learning or on shorts only for India. Using the power of technology, we can solve for India in the areas of language, payments, learning and education and just getting more credible information going through.
Google has a unique culture and I’m learning through my time here. It is an organization, which has a very high level of equity and every person can make a difference in Google. Everyone is a boss in some way in Google and everyone can make a difference in the area they are working on. It is huge empowerment and ability to make a difference in the area that you own and drive.
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