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Last Updated : Jun 12, 2019 09:02 PM IST | Source: Moneycontrol.com

With digital advertising on the rise, here’s why brands prefer the medium

GroupM in a report also estimated that the digital advertising expenditure (adex) will grow by 30 percent to reach Rs 16,038 crore this year.

Maryam Farooqui @farooqui_maryam

Digital content consumption rose and the medium has become an obvious choice for advertisers. But segmented and personalised data and diverse viewership are among the many reasons it is preferred, experts say.

Talking to Moneycontrol, Varun Duggirala, content chief and co-founder of digital creative agency The Glitch said, "Clients get far richer data in terms of where creatives can be reached. They know exactly how to target and reach different kinds of audiences. They can have target segmentation and understand the kind of different creatives that can lead to sales. It is a far more effective medium." 

"For example, a large number of people watch cricket on the television. But if you ask me the consumer segmentation, it would be based on a TAM report which targets four houses in an entire colony. For Hotstar, I can tell you the demographics of each of the 18 million people who watched the match," Rohit Raj, creative chief and co-founder of The Glitch explained.

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Thus through various techniques, brands can process viewers' data which is highly personalised, such as their browsing history.

"On digital, I am able to target them individually. Such data is valuable for a brand and helps create effective communication. Digital is definitely the way forward," Duggirala added.

While television and print take the lion’s share in the adex pie, digital grew consistently. From 2016 to 2018, digital advertising expenditure (adex) increased by around 30-40 percent, from Rs 3,402 crore to Rs 12,337 crore.

"We have seen a tectonic shift. Earlier 1 percent of the marketing budget was for digital. Today it is probably 95 percent. E-commerce and data penetration are the two reasons why digital advertising has the kind of growth that it has now. And that’s only going to increase," said Raj. 

Media advertising company GroupM in a report estimated that the digital adex would grow by 30 percent to reach Rs 16,038 crore this year.

This year three major events — the Indian Premier League, Lok Sabha elections 2019, and the ongoing ICC World Cup, took place back-to-back. Thus 37 percent of the incremental ad spending will be on digital, the GroupM report added.

As per experts, thanks to the IPL, Hotstar is expected to see a 15-20 percent increase in ad spend this year, and the World Cup would take this number higher.

As for the general elections - held in seven phases from April 11 to May 19, reports suggest that total spend on Google’s various digital segments surpassed Rs 86.31 crore since February this year. Similarly, social media giant Facebook saw around Rs 121 crore for 61,248 ads.

While FMCG is known to spend heavily on television, the outlook is changing for the category, Duggirala and Raj believed.

"FMCG's outlook towards digital has changed as it provides people with immediate access to buy the product after they watch the ad. A large number of current advertisements are either FMCG or digital dependent brands — from the Swiggy’s to online pharmacies," Duggirala pointed out.

For smaller brands like Beardo and Boat, digital is the right medium. "Smaller brands do not have to worry about distribution spend or large marketing spends on television, hoardings, etc. They can have a razor-sharp focus on digital sell," he added.

A key trend to note is video ads, which showed a significant increase and accounted for 19 percent of the overall spends in digital advertising last year. In fact, the FMCG sector spends the largest share, 35 percent, of its digital media budget on video.

According to Raj, "digital penetration will grow to touch as many as 290 million users in rural India, opening up a whole new demographic and data sets for advertisers to access. So, expect a lot of regional content in terms of both video and voice."

A report by Dentsu Aegis Network (DAN) said that increased penetration of digital video among internet users would impact adex on video across platforms. This was 40 percent in 2016 and increased to 54 percent in 2017. 

"Advertisers will go where the eyeballs are and that destination is over-the-top (OTT) platforms. Advertisers will shift spends to OTT as more people stream content on these platforms," the report added.

And Raj believes, "with more OTT players stepping in, look out for diminishing viewership rates on TV. Just like how video killed the radio star, OTT will soon overshadow linear programming led products like television."
First Published on Jun 12, 2019 09:02 pm
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