Ad spend on digital increasing but moving at a slower pace compared to viewership growth, says BCG-CII report

Advertiser spend on digital is increasing but moving at a slower pace compared to viewership growth as advertisement dollars continue to flow in but subset of advertisers are starting to turn cautious, highlighted the latest BCG-CII report, ‘The trillion (and growing) touchpoint story – recognising the monetization conundrum’.

The reports acknowledged that the advertisers understand and appreciate the manifold advantages — better targeting, lesser wastage, ability to drive brand building through interactive experiences, among others, when it comes to digital advertising. But the questions on effectiveness and efficacy still remain in the absence of transparent and verifiable data and their concerns are getting louder.

It warned that possible challenging environment ahead might impact status quo and lead to tough decisions.

Another important point highlighted by the report is that advertisements in digital video are able to retain more visual attention than traditional TV as 55% viewers use TV advertising time in multitasking, switching screens or skipping content. In comparison, mobile advertising commands more viewer attention. The report suggested that a lighter advertising load on OTT can drive higher recall for brands.

In India, the share of digital in the overall pie increasing but still much behind the eyeballs.

Reasons for increasing spends or shifting spends to digital?

100% feel digital platforms enable more granular targeting.

83% feel digital gives quantifiable return metrics that justify investment.

Key concerns with digital marketing?

67% feel self-reported metrics raise mistrust.

Talking about the way ahead, the report said two key theatres of action may help translate the trillion (and growing) touchpoints into a more sustainable and value accretive proposition for all industry stakeholders.

1. Continuing to drive targeted investments around propositions (relevant content, affordable pricing, among others) that consumers value while making business model more sustainable.

2. Working closely with advertisers to further strengthen the relationship — increasing the spends and return on their investment; enabling them to measure the effectiveness and efficacy in self-serve mode.

The report summarised by saying that India continues its unique multi-modal growth pattern with video as the growth driver over the last 2-3 years. While TV has grown organically, digital video consumption has almost doubled in the past two years. All indicators suggest this growth will continue and the trillion touchpoints will only increase in the near future. The demand-side story is led by India’s favourable demographics, surge in smartphone adoption coupled with ubiquitous low-cost mobile internet.

On the supply side, the exponential growth of players investing heavily in driving a truly customer-centric experience (relevant content, affordable pricing, easy payment options, customised formats, among others) has not only driven the growth but set the benchmark for a truly enriching experience. This experience is visible in the form of the ever-increasing engagement levels both in terms of #sessions and time per session. The high levels of engagement are starting to address the issue of monetisation that traditionally has been the proverbial elephant in the room.

Consumers are increasingly looking to move beyond trials but the funnel flow is still small compared to the large-scale investments being made by players to both acquire and retain consumers. Our consumer research suggests the path being taken is the right one as users proclaim high stickiness and tendency to pay with the spend on media expected to follow the “lipstick effect” even in challenged environments.

Advertisers fundamentally continue to believe in the medium but with an uncertain economic environment looming up ahead, they do want the industry to quickly fix some of the inherent issues like transparent measurement of ROMI (return on marketing investment).

The coming year will be a pivotal one for the industry as it looks to balance the imperative of growth and helping translate the trillion (and growing) touchpoints into a more sustainable and value accretive proposition for all stakeholders. This is not an easy task and will require deep introspection and high levels of innovation. Success, however, will again re-iterate the industry’s position as a leader willing to always disrupt itself, showing the path towards a more sustainable future even in uncertain times.

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