Streaming service MX Player is eyeing strong growth in ad spends on the platform in the second half of 2022 on the back of the festive season and its new ad offering.
The company recently launched a self-serve platform which makes ad inventory directly available to business owners, marketing managers, media agencies, and advertisers.
"We have a platform called MX Advantage.com. If marketers want to do a larger campaign with impact properties and need a customised campaign, then they can fill a form or contact us.
"But if they want to run a campaign on their own, they can log on to the self-serve platform and create a solution based on their requirement," said Nikhil Gandhi, COO, MX Player.
To stream ads in videos on MX Player, the platform offers advertisers three options — 10, 20 and 30 second ads at Rs 110, 200, and 300 per 1,000 impressions (the number of times an ad is displayed).
Increase in ad spends
Gandhi expects a 30 percent increase in ad spends in the second half of this year due to a higher number of advertisers adopting the new ad offering this festive season.
"Since we have launched (Advantage), a good number of new clients have taken to this. We have seen advertisers from different sectors like FMCG, education, etc., using the platform," he said.
Currently, they deal with over 1,000 advertisers directly, said Gandhi.
He said that the festive season typically sees an uptick of over 30 percent compared to the previous quarter.
"On the programmatic side, we see a bump of 25 percent on CPMs (cost per mille or cost per thousand impressions). For direct advertisers, we have premium propositions like sponsorships. We expect an increase in ad volumes," said Gandhi.
Programmatic advertising is the automated buying and selling of digital advertising.
The platform is ramping up its content offering as well for the festive period.
"Our festive line-up includes 14 new episodes of the ongoing series Roohaniyat, a new series called Shiksha Mandal, Dharavi Bank starring Suniel Shetty and Vivek Oberoi. We have 6-7 sponsors on board so far, for some of the shows," he said.
On the slowing ad spends of categories like start-ups, cryptocurrency and FMCG, Gandhi said that many marketers, including traditional advertisers, have gone digital. "With SME (small and medium enterprises) advertisers, the first port of call is digital," he said.
Industry observers note that the Indian OTT ad market is expanding at 30-35 percent, compared to digital advertising, which is growing at 25 percent annually.
Growing competition
MX Player, which claims to be the second biggest player in the digital video market, is estimated to have over eight percent share in the advertising video on-demand (AVOD) space.
An Elara Capital report states that YouTube has the lead in the AVOD market with 38-40 percent share, followed by Disney+Hotstar at 18-20 percent, MX Player at 8-9 percent, Sony LIV at 3.4 percent, and ZEE5 at 2.4 percent.
Newer players are entering the market, like the Telugu-Tamil streaming platform Aha, which earlier this month adopted the AVOD route. Seeing a drop in its subscriber base, Netflix has also set its sights on the AVOD model.
Gandhi said that new players will have to scale their user base before they can attract advertisers.
MX Player has over 300 million monthly active users (MAUs) globally and 236 million MAUs in India.
Gandhi also pointed out that like on TV, Indians are willing to watch ads on OTT.
"India has been an AVOD market. YouTube has demonstrated scale in terms of both users and revenue despite the fact that they show ads. It is the same for us. AVOD is growing. We have a sizable cohort of users who watch a lot of ads and there is no drop in engagement," he added.
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