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Digital eating into TV and print’s ad pie, says GroupM’s CVL Srinivas
MUMBAI: Ad monies are where the eyeballs are. This is ringing true for digital advertising, which is projected to grow at 30% in 2017 to touch Rs 9,490 crore, as per GroupM’s ‘This Year Next year’ (TYNY) 2017 report. In comparison, total ad expenditure in India is expected to grow at 10% to touch Rs 61,204 crore in 2017 compared to Rs 55,671 crore in 2016.
A large part of digital’s growth is being driven by video advertising, thanks to YouTube and other over-the-top (OTT) services dotting the digital media landscape.
GroupM CEO South Asia CVL Srinivas said that OTT is no longer niche. In fact, it has become a mass media, ranking third on the pecking order after TV and print in terms of ad spends and growing faster than all other media platforms.
In 2016, digital saw an astounding 47% growth in ad spends to end the year at Rs 7,300 crore. The digital spends on digital stood at Rs 4950 crore in the year before.
“We saw a huge spurt in digital mobile spends. A lot of campaigns are happening on mobile and a lot of campaigns are being conceptualised on mobile first. Within that the sweet spot is video so we saw a lot of growth for mobile video,” Srinivas said.
GroupM estimates the digital AdEx to take a 15.5% share of the total AdEx this year. Ad spends, it said, will grow on OTT platforms, as internet speeds improve and catch-up TV gains ground.
Unlike the previous years when the digital growth was coming at the cost of print, it has now started to pinch TV broadcasters as well.
Explaining the trend, Srinivas said that the sluggishness in economy has prompted advertisers to look at cost-effective solutions and digital with its high-engagement value is proving to be a hands-down winner.
“Unlike in the past when digital was growing purely on the back of print, this is the first that we have seen digital grow from print but TV as well. Digital is gaining whatever TV and print is losing,” Srinivas pointed out.
While OTT was hampering the growth of the English entertainment genre, it has begun hitting the general entertainment genre as well. “It’s happening across the board. Now one whole percentage point has moved to digital, which means it is eating into the larger pie. Digital today has also become more mass, so mass has started to pull from mass although it is very small,” he stated.
This explains the surge in launch of OTT platforms, with broadcasters too joining the party to hold on to their audiences. “This is why there is a lot of action on OTT front. All broadcasters have launched OTT services to retain their audiences. That’s a right strategy to stay with your audiences,” he said.
According to the report, in global markets for every $100 incremental ad spends as much as $77 is spent on digital, while the rest goes to traditional media. In India, the story is totally different with only $40 going to digital while traditional still getting the big chunk of the pie at $60.