Business Today

Digital Soars

Digital advertising has started eating into the share of not just print but also television.
By Ajita Shashidhar | Print Edition: March 12, 2017

Krish Sridhar, 18, seldom misses any episode of popular English television shows such as Flash, Quantico and Sherlock Holmes. The aspiring film-maker most often ends up watching these shows not on the 42-inch LED TV, in the comfort of his home, but on his phone, and that too during the hour-long train commute between home and college.

Sridhar is among the 130-odd million consumers who are fast adopting the entertainment anywhere and everywhere culture. This may not have made television passe but has definitely forced both content creators and advertisers to take digital video platforms seriously. This is clearly visible in the steep rise in advertising spends on digital, the only segment growing at a decent pace (see AdEx Trends).

Sunil Kataria, Business Head, Godrej Consumer (India and SAARC), had told Business Today earlier that digital was no longer an after-thought. He said there was a serious effort to allocate some television ad spend to digital platforms.

A recent report by GroupM on Indian advertising expenditures validates this. In 2016, TV spends grew 10 per cent, compared with the earlier growth of 15-20 per cent, while digital spends grew over 47 per cent. The report forecasts 8 per cent growth for TV and 30 per cent for digital in 2017. Though the dominant advertising expenditure contributors are still TV and print (77 per cent last year), this is declining. The GroupM report forecasts 75 per cent contribution in 2017. Digital, on the other hand, contributed 13.3 per cent last year; this year, the figure is expected to grow to 15.5 per cent. The GroupM report also indicates that TV and digital will become the largest contributors in the next few years, displacing print.

This explains why digital has become a focus area for all broadcasters. "We have 100 advertisers on our OTT platform (Voot) within eight months of the launch," says Gaurav Gandhi, COO, Viacom 18 Digital Ventures. But he adds that things are a little more complex than they appear. "Advertisers are not abandoning TV for digital. They are saying they want to be on both the screens." Even Lakshmi Narasimhan, Chief Growth Officer, GroupM South Asia, says that while there is a movement of advertising spends from TV to digital, this is happening mainly across youth-oriented platforms.

Digital is expected to contribute $1 billion to the total advertising expenditure in the next four-five years and is set to displace print as the largest contributor. However, India is the only market where print advertising, too, is growing. The GroupM report says the growth was 4 per cent last year; this year, it is expected to be 4.5 per cent.

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