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What will drive the $86 million ad spend on connected TV in India in 2023?

Digital first brands, affordable smart TVs and better ROI will be major boosters for connected TV growth in India.

By  Tasmayee Laha RoyJan 9, 2023 10:09 AM
What will drive the $86 million ad spend on connected TV in India in 2023?
Brands are looking for incremental reach and making an impact by getting premium ad inventory across OTT platforms, especially at the time of big sports events like FIFA and the T20 World Cup. Since CTV has a shared viewing experience, it leads to a higher emotional response to ads. (Representational image by Karla Hernandez via Unsplash)

In a bid to make their TV spend more data-driven, targeted and cost-efficient brands are shifting focus to connected television (CTV). More and more brands across sectors like beauty, wellness, consumer technology, gaming, entertainment, and automobiles are taking up CTV advertising by combining their first-party data and insights about their key audiences and controlling the reach and frequency of their ad campaigns.

Experts see the trend only growing in 2023. A Finecast-Group M report on changing landscape of Indian Television says CTV ad spends will be a CAGR of 47% in India between 2022 and 2027. Estimates also say that advertisers will spend close to $86 million on CTV advertising in the country in 2023 alone. The number is expected to touch $395 million by 2027.

“If convenience is driving audiences towards connected TV, addressability is driving advertisers to connected TV,” says the report.

2022 has seen a host of brands like GSK, Swiggy, Livspace, M·A·C Cosmetics, CaratLane, Nestle, Luxottica, Mamaearth using CTV advertising for better targeting and reach.

With CTV, brands are combining the best of linear TV and digital, say experts.

“CTV's popularity is driven in part by its ability to combine the power of TV's format with the addressability and attribution capabilities of digital marketing,” says Ankit Oberoi, CEO and founder, at ad tech company Zelto Inc.

“Additionally, CTV ads have undeniable appeal. These are presented on a big screen, are longer in length, feature sound, and are offered in a premium, trust-based environment. Brands are betting big on CTV advertising in India and have become very popular in the BFSI, e-commerce, automobile, and OTT categories,” Oberoi adds.

Today, more than 10% of TV homes are today addressable and there are 20-22 million addressable TV homes in India. By 2025 the number of addressable TV homes in the country is expected to touch 40 million.

Brands have paid a premium price for connected TV inventory on special occasions like live sport events and festive season. The premium has sometimes been to the tune of 2X compared to linear TV. However, experts still call connected TV a cost-efficient platform.

What are brands looking for beyond targeting?

According to Siddharth Dabhade, managing director, at ad tech company MiQ India, Indian brands want to reach a vast pool of affluent urban households through CTV, which is elusive to linear TV.

“Brands are looking for incremental reach and making an impact by getting premium ad inventory across OTT platforms, especially at the time of big sports events like FIFA and the T20 World Cup. Since CTV has a shared viewing experience, it leads to a higher emotional response to ads,” he says.

Ramsai Panchapakesan, senior vice president and national head - Integrated Media Buying at Zenith explains the cost effectiveness of advertising on connected TV. According to him, CTV is a better ROI platform for the advertisers who have a specific audience to address and the medium helps them to completely eliminate spillover.

“When a platform is serving a 500-600 million audience pool that doesn’t have addressable capabilities because that is something that is yet to be available in India on linear TV, the broadcasters are compelled to charge a brand for the entire reach because they cannot isolate their input cost by choosing the brand audience number and deriving the cost. This makes CTV much more cost efficient by minimizing the spillover. To add CTV audiences are cord-cutters and cannot be reached through traditional linear TV, hence CTV becomes an indispensable part of the media plan,” he says.

Amplification with Ad tech

Advertisers that want to optimize their video campaigns by using advanced audience targeting, retargeting on other devices, and advanced measurement through brand lift studies are using the expertise of ad tech companies.

MiQ for instance uses data from TV exposure to build audiences, manage reach and frequency, and activate in whatever channels brands need to drive the results.

Advertisers that want to optimize their video campaigns by using advanced audience targeting, retargeting on other devices, and advanced measurement through brand lift studies are using the expertise of ad tech companies

Dabhade explains how. “MiQ is connected to multiple DSPs, we can access unique CTV inventory without limits, and our trading platform, Lab, allows traders to quickly and easily set up any brand’s campaign based on specific content or genre targeting, and get the widest view of every path to supply so we can optimize for maximum efficiency,” he says.

“We help layer on Advanced TV data via our multiple automatic content recognition (ACR) TV viewership data integrations, as a result, we can activate a personalized CTV campaign for brands & advertisers,” he assa.

MiQ has worked with brands like Scotch Brite, M.A.C Cosmetics, CaratLane and many others.

Roadblocks

While experts agree on the capacity of connected TV to revolutionize the ad space they also point out certain hurdles that need to be taken care of to reach the targeted growth of the platform.

“There is no denying the immense growth of connected TV in India," says Kumar Awanish, chief growth officer at Cheil India. "But until the fraud detection and the measurement metrics are in place, the success of the platform will be limited." Awanish adds, "We are hopeful that one tech giant or the other will come up with a solution and fix these issues because the only problem the mature advertisers are facing are the measurement metrics and controlling the ad fraud."

First Published on Jan 9, 2023 10:09 AM