OTT's premium audience is tempting but paid subscribers and the lack of third party measurement are factors marketers have to grapple with.
29 million subscribers paid for 53 million video subscriptions in 2020 and according to multinational professional services network - EY, video subscription revenue secured a 50 per cent growth in 2020 compared to 2019. Digital video streaming platforms sold subscription packs promising "ad-free" experiences. But gone are those days. Ads have appeared between overs during Indian Premier League (IPL) matches in the past and the remaining half of the 2021 edition too will have commercials streaming.
During its quarterly earnings call in August 2021, Disney revealed that it has around 46.4 million subscribers in India, which constitutes 40 per cent of global Disney Plus subscribers (116 million). Couple of years back, Hotstar claimed that it had whopping 300 million monthly active users during the IPL. Dream11, Upstox, Association of Mutual Funds in India (AMFI), PhonePe, Amazon, Swiggy, 1MG and many other such brands targeting male affluents will be buying slots during the IPL stream to advertise.
While digital streaming is catching up, television remains undisputed when it comes to big-ticket or impact properties. Star and Disney India charges around Rs 10 - 13 lakh for a 10-second slot during the IPL broadcast on television. Hotstar inventory is largely offered in a package to the television advertisers albeit at a higher price. As per reports, for brands only advertising on Disney+ Hotstar, the inventory is available at Rs 180 CPM (Cost per mile/thousand).
Ritesh Ghosal, chief of marketing and business development, Infiniti Retail, Croma - a Tata enterprise, pegged it down to a lack of third party measurement of deliverables. Though Croma is not advertising during the upcoming IPL, Ghosal’s views come from his 26 years of experience.
“The fundamental issue with the entire digital advertising space, and not just OTT platforms, is that there is no third-party measurement. While digital advertising has started getting a larger share of the marketing spend, this is a fundamental issue they have not solved," says Ghosal. Adding, "On the other hand, television data is extremely measurable with third party-published spot monitoring reports and post-evaluation using Broadcast Audience Research Council (BARC) India data.”
Advertising on Disney+ Hotstar for the IPL also doesn’t ensure click-throughs, as people are hooked to the game for that moment. It’s unlikely that they will click on an ad and start scrolling to buy stuff.
“If you're watching on the phone, you're not going to get the same immersive experience of the advertising, and the advertiser will probably be more interested in click-throughs. He would want the ad to convert into an action. On the TV screen, getting an action is impossible, it's just swapping television advertising with OTT,” asserts Ghosal.
“To my knowledge, the data about the breakup of OTT viewership on a large screen, versus a small one, is not stable and again not verified by a third party. Without knowing the breakup, and being able to channel the feed separately, the advertiser will end up with a very action-oriented click now kind of communication being played on the large screen. Or, he will be trying to impress people with his brand story on the small screen,” he adds.
Shashank Srivastava, senior executive director, Maruti Suzuki India, has a different perspective and strongly believes in the medium’s potential. The company has not yet decided if it will be associating with the IPL, as it doesn’t match its marketing calendar. But if it does, it will be on Disney+ Hotstar and not on television, he says.
In the last five years, Maruti has invested more than Rs 250 crore in the IPL. It has been associated with the OTT platform for IPL since 2017. Last year, it only associated with Disney+ Hotstar as an associate sponsor and skipped television. Another large advertiser - Flipkart did same in the past.
“Both from a reach perspective, as well as from that of affinity and impact on our TG, IPL streaming on OTT matches very well with our overall objectives. Even from a financial viewpoint, OTT is much more effective, in terms of the return on investment. It is getting more traction now. The important thing is that the timing matches with our marketing plan. Then it's a great medium to invest in,” says Srivastava.
For the automobile sector, the TG has a high affinity for two genres - sports, especially cricket, and English news, Srivastava adds. With regard to reach through IPL, as per Maruti's estimates, in 2020-21, television was at 375 million and OTT was about 260 million.
“We have defined our target audience as young and affluent males. So, in that priority market, we have got a very good reach. In fact, it was 79 per cent for a million-plus towns and 66 per cent for 25 years of age and above,” mentions Srivastava.
Since Disney+ Hotstar caters to a premium audience, does the brand target its high-end automobiles on the platform and advertise its massy cars on television? Srivastava says the company has not done it so far since it advertised on both the mediums for just one season, and it was quite new then. And though it is now possible to do so, he would still prefer to advertise on OTT.
“Looking at our marketing calendar and the huge amounts for television, I would still bet more on OTT, than make that distinction between massy and premium. There would be some overlap there, but even our reach objectives are quite well served. Our TG is a little more affluent, and that also matches with the OTT consumer profile. So, that way, I think OTT is a great medium,” he says.
OTT has a lower reach, as compared to television. Srivastava mentions that for a new launch, where you may require a large reach and frequency, having a presence on both (OTT and TV) may be good.
“IPL on OTT seems to be doing much better. I wouldn't bet on OTT alone for other content. As the end penetration of the Internet, and the number of smartphones and other devices are increasing in the country, the OTT platform would get bigger. We're still at the initial stages of seeing the full efficacy and impact of OTT advertising,” he adds.
Amin Lakhani, chief operating officer, Mindshare South Asia, agreed with Ghosal on the absence of a third-party measurement system. “In the absence of an industry currency there is a limited potential for the combined growth of television and OTT. There will be more traction and participation if there will be an industry accepted measurement system,” he said.
Lakhani said that the IPL being behind a paywall doesn’t matter to brands. “Some clients want to target based on geographical locations, choices, etc. OTT allows them that. While television gives them the choice to target based on language. The only difference is with regard to the size of the audience in the cohort they want to reach,” he said.
He said that the audience on both the platforms overlap. Especially in the post-Covid OTT culture, people prefer to watch some content together and some other content alone. While some people choose to watch it on both. This leads to an overlap between the two audiences.
Though Disney+ Hotstar’s viewers are paid subscribers, many telecom providers offer subscriptions to the platform as part of their package.
Vaishali Verma, CEO, Initiative India, said that with these viewers the medium no longer remains premium but becomes ‘mass premium’ thus providing higher reach.
“Since it’s a paid platform, it would have provided a filtered audience and thus a premium audience. But Disney+ Hotstar is increasing its audience base on the back of these telecom deals. If it promises to increase its reach over last year on the back of these deals then it is not as premium but a mass premium kind of an audience,” she said.
If the platform had only paid subscribers then high end brands would have found it more relevant to reach their TG. “But we don't see that. Instead we are seeing the subscription numbers rising. And this could have come at the back of the telecom deals. Though it may not be premium it gives a high reach,” she added.
Brands use the two mediums as a combination- television for its reach and OTT for engagement. “But there are also many brands who are not on television and only on OTT as the entry cost there is not as high as television. While people are watching the matches on television, there are still some audiences who are not coming on television. Hence Hotstar gets that incremental reach. So with incremental reach and driving engagement, it always compliments television,” she said.
Manas Mishra, managing director, Mediant Communications said that brands eventually choose the medium based on what they aim to achieve. The brand evaluates the two mediums on the cost efficiency of reach and its objectives.
For example, if the brand wants to deliver to some audience segments in certain geographies, then Disney+ Hotstar is the better medium. If the brand wants to make an aggressive push and the objective is to provide a larger than life context, then spending on television makes more sense.
Ambika Sharma, founder & MD, Pulp Strategy, says this is an ideal medium for brands that want to reach a digitally advanced audience, yet, despite its premium nature, doesn't provide the kind of reach television does. Manas Gulati, co-founder and CEO at #ARM Worldwide said that online provides both scale and targeting for a niche audience whereas television has a lot of spillages. However since the cost of one ad unit is very high, only those brands that see a good return invest on it.
With inputs from Manas Mishra, managing director, Mediant Communications, Ambika Sharma, founder & MD, Pulp Strategy and Manas Gulati, co-founder and CEO at #ARM Worldwide.