OTT players need to provide safe environment to brands to grow ad rev

MUMBAI: For brands, it has become very important that their ads are being viewed in a safe environment after the recent YouTube fiasco wherein ads by reputed brands appeared alongside extremist and illegal content.

While YouTube gobbles most of the digital video ad spends, independent OTT players stand to gain if they provide a safe environment to brands. At the same time, there is an opportunity for the OTT platforms to focus more on regional content which is a white space.

These points were brought out in a panel discussion at the Mobile Marketing Association Forum 2018. The session was called ‘Video 2.0 Time To Pay’ and the panelists were Hotstar Executive VP, CMO Sidharth Shakdher, Sony Pictures Networks India business head digital Uday Sodhi, Isobar South Asia group MD Shamsuddin Jasani and Patanjali Ayurved CGM and Marketing Head Avinash Kumar.

SonyLIV’s Uday Sodhi noted that the first steps have been taken to make clients pay for data in a very way. There is a movement of money from other media firms to OTT platforms which basically means that there is subtle value for the consumer.

He further stated that brands value quality content, the environment, viewability and brand safety. He added that the rates that the OTT platforms get are higher than the rest of the digital environment.

He also said that inventory is sold for sports events, shows and the advertiser knows that the ad will play out in that environment to a certain kind of audience.

This, he noted, is a subtle way of targetting a certain kind of data although it may not be precise and evolved data. But if someone is buying inventory on sports then that person is targeting a certain kind of consumer and paying a premium for it. There will be an evolution. So an advertiser might want to target a gaming audience who likes to play along and so pays a premium to come on-board ‘KBC’. “This is a subtle way of saying that there is a certain amount of data, consumer there and therefore there is a premium attached.”

He further noted that a layering of audiences will happen where groups like just car owners and mutual fund users are targeted. It has started happening with a small section of advertisers. However, clients are paying a premium for the audience of sports and high-impact properties.

Hotstar’s Shakdher noted that advertisers keep in mind the audience profile. One does not buy cricket for the sake of cricket. Brand marketers know the demographic composition and the products that he is positioning there. It is never a black and white decision.

He said that the advantage of the freemium model is that it allows an OTT platform to cast the net wide. There are windows between free and premium content. He noted that it is possible to build a complete business out of the subscription. Different kinds of content can be created for free and premium. At the same time TV has grown. It is about how smartly a brand wants to play. Digital is a strong part of a brands strategy. Today any brand will think twice before leaving digital out of their strategy.

Isobar’s Jasani said that it is a priority for brands like HUL and Patanjali to be in a brand safe environment. “It has been one of the foremost things on their agenda. We don’t hesitate to yank advertising of content that is unsafe. The change will happen with time. Reach for the sake of reach sometimes does not mean anything.”

Sodhi noted that digital will be a large play with the number of users growing by millions. So significant ad dollars will move into this ecosystem. “Advertising on digital is growing the fastest. For every new dollar coming to the Indian ad pie a disproportionate amount is going to digital and to digital video. So as an industry I think that we are in a purple patch, a good situation.”

Patanjali’s Kumar noted that his company was the first to go into digital with a video only approach. “We started with Youtube but we realised that we need to be seen in the right context and environment. Patanjali is a brand rooted in Indian culture. In YouTube, you do not have the facility to interact in an environment that is safe and secure. That is why we moved out of Youtube and we only interact through OTT platforms.”

The issue of control over programmatic display also came up and it was pointed out that video is safer in this regard. Kumar noted that YouTube is free for all and it is more of a search engine and has a lot of choices. But on other OTT platforms whether it is SonyLiv or Hotstar if one wants to listen to a song then one has to leave the platform and go elsewhere to an app like Saavn. This is the challenge for OTT platforms that charge users.

The panellists noted that 20-25% of OTT revenues come from subscription which shows that users value quality content. This will allow OTT players to invest in quality content. The question was raised of whether brands will pay a premium for data, brand-safe content. Brands will do both placement and audience buys.

Jasani said that it is a horses for courses situation. There is a need for both OTT platforms and for YouTube as well. It is not a competition between the OTT platforms and YouTube. When buying a brand there is a mix because the KPIs are different. Programmatic buying is helping reach the right kind of consumers. He feels that once OTT platforms whether it is Hotstar or SonyLiv achieve a certain kind scale then a shift will happen where advertisers will spend a lot more money there. This is two to three years away. Data will play a major role in driving consumption.

Kumar noted that for sports properties the first thing his company does is ask the TV channel for the rates which is often over the top. Then he goes to the OTT platform, gets a deal and then goes back to the TV platform. He said this is affordability working at its best.

He noted that the data he gets from digital is similar to the TV. This is despite the fact that there are image and video recognition software, a lot of AI online that can let his company know the geography, kind of customer he is targetting.

You may be interested