Why TV continues to be the first love of advertisers
Despite the growth of digital, most advertisers feel TV provides better scale and brand building capabilities.
Published - Sep 18, 2018 9:00 AM Updated: Sep 18, 2018 9:00 AM
Digital has become quite the buzzword for advertisers in the last couple of years. Almost all big brands are now present on online platforms and no marketing strategy is considered complete without the inclusion of digital. In fact, according to recent KPMG report 'Media Ecosystem: The wall falls down', digital advertising revenues registered a growth of 35 per cent in FY18 to reach Rs 11,600 crore. Television, meanwhile, had a relatively subdued year in FY18, with the overall revenue growing at a slower rate of 9.5 per cent to reach Rs 65,200 crore.
While there is no doubt that digital has become a must-have for brands today and is growing fast, it is also no secret that television is still the preferred medium for advertisers. So, what is it that keeps the advertiser-television relationship going strong? Also, going ahead, will TV continue to be the first love of advertisers or will the digital push change the equation? We spoke to some experts for the answers.
According to Sanjiv Mehta, CEO & MD, HUL, television is and will remain relevant in the country for many decades to come.
“Today technology enables us to design digital communication and geo-target with personalised plans. However, some things will not change. The marketing fundamentals will remain the same. The consumer will remain at the heart of marketing. New-age content will take us to the art of new storytelling. But it would be seriously immature to write the obituary of television. Television is and will remain relevant for many decades to come in the country. But what makes people succeed in the art of being ambidextrous is balancing the online with the offline,” says Mehta.
Mayank Shah, Category Head, Parle Products, says that TV is the preferred medium for brands mainly because of its sheer reach. He feels that it makes sense for brands to advertise on TV as it ensures mass targeting.
“There is no doubt that digital is growing and it is also an important medium. But when it comes to reach, especially for mass brands such as FMCG or daily need items, TV works better. For some time, TV will continue to have an edge over digital. Digital is the platform for brands that want to target a certain segment of audience,” he explains.
Neel Kamal Sharma, COO-Buying, Madison World, says that despite losing 1 per cent share last year, television tops the advertising chart.
“Yes, digital advertising revenues have been growing in India and the trend will continue. However, television is still sitting on the top of the advertising revenue pie despite losing 1 per cent share last year,” he says.
Sharma adds, “Since total advertising is growing at 12 per cent and digital at 25 per cent, well-established mediums such as TV and print are likely to lose their share in the future. But the relevance of television remains. TV is the first love of FMCG players, the biggest advertising category. Also, digital-skewed categories such as smartphone, travel and even OTT platforms use TV to drive their growth.”
Categories such as FMCG, telecom, BFSI, real estate and e-commerce are the main growth drivers for digital media, but some of these have a big presence in the traditional media as well. With an increase in the consumption of content such as news, entertainment and sports on digital platforms, consumers, especially the younger generation, have drifted away from traditional media and so many TV-heavy categories such as FMCG and telecom are now also using digital platforms extensively.
Chandramohan Mehra, Chief Marketing Officer, Bajaj Allianz Life Insurance, feels that the two mediums will continue to co-exist, for the next 3 to 5 years at least.
“Firstly, the selection of media is the function of strategic objectives. Choice of TV or digital depends on the task at hand. Largely, for brands, an integrated approach is far more effective. TV can deliver reach while digital can deepen brand engagement. At least for the next 3 to 5 years, both the mediums will continue to co-exist despite the exponential growth rate of digital,” Mehra says.
As per the KPMG report, mature TV and digital markets like the US are witnessing a shift of viewers from TV to digital-only consumption on the back of price arbitrage and strong digital infrastructure. But in India, TV offers a strong proposition in terms of price and content along with continued headroom for growth. Also, there is a lack of depth in digital infrastructure, especially fixed-line internet. As a result, digital consumption appears to be largely complementary to TV, enabling latent individual viewing.
According to Ravish Kumar, Head– Regional TV Network, Viacom 18, TV is the single largest and cost-effective medium for reaching out to consumers.
He says, “TV is measured very beautifully. Hence, you know exactly how much you are getting in terms of measurement. In that way, digital has a long way to go. In terms of content, the two are complementing each other, but digital has a lot to learn from TV and vice- versa. However, overall, TV remains the preferred medium for brands.”
Vidhu Sagar, National Director - PointNine Lintas at MullenLowe Lintas Group, also believes that it is always different strokes for different folks. He thinks that one general approach can’t be applied to all kind of audience.
Sagar says, “The kind of media fragmentation that is taking place today, you can’t have the same old approach of going with one broadcast medium and carrying one large creative message and letting everything else follow. In a way, such kind of an approach doesn't work anymore because things have drastically changed in the last 10 years. However, even in this changed reality, any brand that is launching cannot do without television and in many cases even print.”
“You can have video assets for some segments of the market on digital, but if you want to impact the overall structure and want a business of big magnitude, you will need television. If you want to add a qualitative aspect to your brand, in terms of stature, respect and credibility, you must go with the broadcast media,” he adds.
The KPMG report states that digital advertisements have become mainstream in India, with digital ad spends expected to cross Rs 40,000 crore in FY 2023.1. In FY 2017, digital advertising contributed Rs 86.2 billion and is expected to grow at a rapid pace with a compounded annual growth rate (CAGR) of 30.9 per cent until 2023.
Sagar mentions, “Digital has grown very rapidly, but the overall advertising budget hasn't grown in that manner for most advertisers. And so, clearly, digital is earning its revenue cutting into the share of other media. Most noticeably, it's happening at the cost of weaker media like radio, cinema, OOH and to some extent also print. Magazines are almost dead now, and also television, in some cases, may be getting impacted. But knowing that television has its own threshold cost of entry, it's not that the client will suddenly cut television and get on digital.”
The Indian OTT industry is currently driven by AVOD or a freemium model and SVOD is still at a nascent stage, with 2-2.4 million subscribers having directly subscribed to OTT platforms, in addition to the ones who are considered paid subscribers through telco-based access. While such telco-based subscriptions have increased in the last year, advertisement revenues have faced challenges with falling CPM rates on account of increasing ad inventory and lack of a standardised, third-party validated digital measurement tool.
Girish Menon, Partner and Head, KPMG, explains, “At the moment, CPM at digital is lower. India’s CPM is much lower than what others get on digital. That's one of the reasons why digital struggles. What you earn from digital is less than what you earn for a one-page advertising in print. Hence, that's why you need ROI and measurement to come through before the CPM starts increasing.”
Meanwhile, according to the KPMG report, from a relatively subdued run in FY’18, the television is expected to bounce back and continue on the growth trajectory it has been on for the last few years. The growth in TV consumption across most of the genres, coupled with traction on live and catch-up TV being viewed on digital platforms, points to the fact that television is likely to continue being the dominant mode of media consumption in India.
Television is expected to grow at a CAGR of 12.6 per cent because of growing penetration, strong advertising demand on the back of domestic consumption and major events (two cricket world cups and general elections in the next five years) and support from better distribution realisations due to digitisation.
WhatsApp, Instagram, LinkedIn, Twitter, Facebook & Youtube