OTT spends to increase this year, but will it come close to social media? Here’s what experts think
Binge culture is attracting more users and advertisers are also following eyeballs. Plus sports on OTT have evolved as a rich viewership stream. Social Samosa speaks to experts to find out how OTT advertising is going to shape up in 2023.
Indian audiences have taken to Over-the-top (OTT) platforms like fish to water. Its advent has disrupted the traditional models of television and cable distribution. Advertisers were also quick to adapt to these changes in the media landscape, further dividing their eggs into different baskets.
OTT advertising is also becoming the golden egg in this basket. 2023 saw some of the biggest OTT campaigns in the Indian space. This includes Tata Cliq Luxury’s association with the latest season of Koffee With Karan, a myriad of products seen in Alia Bhatt starrer Darlings (Daawat rice being the most prominent), and Disney+Hotstar creating a #SeeEqual playlist for Ariel’s marquee campaign, Share the Load.
According to Eros Now and KPMG report, an average OTT viewer in Indian approximately spends 70 minutes on video streaming platforms, with a consumption frequency of 12.5 times a week. Viewers are accessing 2.5 platforms at a given time.
On the other hand, globally, on average, an internet user spends 6 hours, 53 minutes online per day, revealed We Are Social and Hootsuite. So, after social media, OTT comes a second close.
This is why OTT platforms are also ringing in more money. According to a recent report by CII, the Indian OTT market is set to grow at a rate of 20-23% CAGR reaching $11-13 dollars in 2030 from $2.6 billion in the current year.
Consumer usage of OTT platforms is only on an upward trend.
“OTT has already come at par with social media platforms because mobile has become a screen of choice for users and anything available within the reach of a fingertip draws favorability & inclination towards the platform,” said Swati Kardak, Group Account Manager – Media Planning & Buying, SoCheers.
This made us wonder if OTT will get the same amount of attention from marketers as social media platforms in 2023.
“It is possible that OTT could come on par with social media or traditional media in terms of reach and influence in the future, as the popularity of streaming video continues to grow and OTT platforms continue to evolve and expand their offerings. However, it is difficult to predict exactly how the media landscape will evolve in the coming years,” said Suraj Nambiar, National Media Head at Tonic Worldwide.
Digital agency Hashtag Orange has seen a jump in advertising spends directed towards OTT.
“In recent times, there has been a significant rise in the budget that marketing agencies allocate towards advertising on OTT platforms. Streaming TV advertising on OTT platforms is an efficient way to reach an audience migrating away from traditional linear television in a more cost-effective manner… It is noteworthy that marketers can optimise brand campaigns for better performance and increased audience engagement based on the analytics result. At Hashtag Orange, our OTT spends have gone up by almost 80% in 2022,” said Ankush Vij, Vice President, Hashtag Orange.
Shradha Agarwal, co-founder and CEO of Grapes is optimistic that OTT can replace digital TVs.
She said, “With the phenomenal rate at which the audience is flocking to the OTT platforms, it has the ability to replace digital TVs. The consumption of content on OTT has increased drastically and it has been observed that people are ready to pay for more than three subscriptions in a year. Consequently, people, these days are consuming a lot of OTT content on a regular basis which has translated into OTT emerging as new categorization of the media plan. Gauging the rising demand for OTT, brands nowadays allocate approximately 30-40% of total ad revenue to OTT advertisements. This is indication enough that OTT is growing by leaps and bounds and brands are even going for yearly deals on OTT.”
He further said that with immense popularity amongst the masses and wide public outreach, OTT platforms certainly have the potential to come at par with social or conventional media platforms.
“As per recent statistics, 72 % of people living in urban areas with Internet access are OTT subscribers. About two-thirds of India’s streamers (64%) are more responsive to advertising on OTT streaming platforms as compared to advertising campaigns running on conventional media. OTT platforms possess unparalleled potential as advertising mediums with the ability to engage viewers. The mentioned scenario clearly states that OTT platforms will be one of the prime platforms to run marketing and advertising campaigns to ensure increased audience engagement in future,” said Vij.
OTT does offer some attractive metrics to advertisers, which can draw them closer to the landscape this year.
Rishabh Mahendru, VP, Client Success, AdLift said, “Brand and advertisers had ramped up their marketing spends in 2022 towards OTT as per reports. It is believed that OTT advertising outperforms other mediums like social media when it comes to attention and purchasing power. However, OTT spends are nowhere close to social media platforms as there is still a huge difference in audience base.”
While Neha Puri – Founder and CEO at Vavo Digital said that it is challenging to forecast how OTT will precisely differ from social media and conventional media in the upcoming year since it depends on several variables, including customer behaviour, technology advancements, and monetary situations.
“But OTT will gain more acceptance and importance as a tool for marketing and advertising. I strongly believe that the rise of OTT has created new opportunities for advertisers and marketers to reach and engage with consumers. It has also led to the development of new ad formats, such as interactive ads and sponsored content, which allow advertisers to create more engaging and interactive experiences for their audience,” said Puri.
Binge culture is attracting more users and advertisers are also following eyeballs.
“As the OTT market is continuously fueling the content needs of their viewers and have them hooked on the binge culture, today we are seeing a steady increase in the audience base and newer marketing plays made to acquire newer audiences which is not only led on by live sports streaming but also entertainment. Resulting to an increase in the spending pool of the marketers,” said Pooja Dua, Account Director at The Rabbit Hole.
Dua said that OTT advertising can offer tangible results.
“There is a level of transparency that allows you to immediately understand the viewership and reach of that ad. It also allows you to put a call to action which instantly measures the effectiveness of the communication. OTT enables Performance based ROI which has already led to big brands participating in this new wave. We are definitely going to see a surge in investments here… Numbers also suggest that 64% of streamers are responsive to ads on streaming platforms with 48% searching for the product and 33% converting to purchase makes it a hot place to be at,” she said.
For OTT to come at par with social media advertising spends, Das suggested, “What OTT has over social media is the ability to make the inference on each member spending hours on the thing that interests them from genre to topic. When the interface will allow engagements only then will the spends be at par.”
Platforms prepare to attract more advertisers
Regional platform Planet Marathi saw more advertisers in 2022 and is hoping to see innovate marketing plans in regional landscape this year.
“Since OTT content is being considered on the same plane as theatrical releases, 2022 saw spends on OTT marketing and advertising increase. Marketing, packaging and promotions of OTT content scaled up. However regional players need to increase and innovate their marketing tactics. Only a few regional OTT platforms invested in quality marketing campaigns for their content slates, which should change in the coming year. More non-language viewers will be seen consuming content from regional OTT platforms given the innovations and originality in stories,” said Akshay Bardapurkar, Founder, Planet Marathi OTT.
Home-grown platform ZEE5 has been working on offering targetted marketing plans to advertisers.
“OTT caters to a wider set of audience, so we have gone for more localised and targeted marketing. Marketing spends depend on a variety of factors and the strategy is to identify the right audience cohorts, engage with them and build a certain connect while promoting the content. We make decisions basis what will work best to reach the right set of audiences for the specific project… Social media integrations have increased and is playing a key role in enabling brands connect with the audiences and create talkability options,” said Manish Kalra, Chief Business Officer, ZEE5.
All eyes on Jio IPL
Last year, after a competitive bid, Viacom18 won the streaming rights for Indian Premier League, which has proven to be an audience grabber.
“It will be interesting to watch how Jio Cinema performs with IPL in its fold. Advertisers will likely use OTT data and analytics to better understand their audience and optimize their campaigns. In th future we will continue to explore ways to integrate their OTT campaigns with other platforms and channels, such as social media and traditional media,” said Nambiar.
Mahendru said, “ In 2023, IPL (which was a biggest draw for advertising) has also shifted base from Disney+ Hotstar to Jio(Viacom18) – So, right now advertisers aren’t very sure of what they’ll get out of OTT platforms. We might see a lean year for OTT advertising in 2023.”
OTT advertising trends in 2023
“In 2023, in terms of the trends, we can look forward to the growing investments in the AVOD segment across the industry. When you adapt the hybrid model [ad-free and ad-based], you are attempting to sustain the investments in your content. It’s like a stepping stone in the middle. Hence, we at ZEE5, provide a diversified and power-packed slate to both our AVOD and SVOD consumers and deliver exclusive content under both the content umbrellas,” said Kalra.
Kalra also expects to see more collaborations between OTT platforms and content powerhouses and independent creators, which he believes will set the stage for more authentic and relatable stories.
Apart from that, OTT’s next stage of growth is expected to come from regional audiences.
“With around 47% digital penetration in India, tier 2 & 3 cities are fast familiarising themselves with the various video streaming platforms. This accessibility among the deeper segments of the population, positions OTT as a favourable marketing media for the e-commerce players as well. As anticipated by reports, the next stage of e-commerce growth in India is likely to come from smaller cities, so Flipkart, Myntra, Nykaa, etc. would leverage the OTT space to target mass audiences,” said Kardak.
Vavo Digital’s Puri said that OTT this year will see more personalization, greater use of interactive and immersive ad formats, expansion into international markets, rise of regional platforms and interactive content.