India's ad penetration at just 0.5%, leaves significant room for growth: Meta's Devanathan

New Delhi: Social media giant Meta counts India among its key priority markets globally, as the rising popularity of its offerings - from Reels to business messaging - and increased engagement on AI tools is supercharging growth, according to Meta India Vice-President Sandhya Devanathan.

Aiding its prospects is the current levels of ad penetration that have a clear headroom for growth. The overall advertisement spending in India is lower than its potential, and over time, the ad penetration is expected to increase, she said.

"...the ad penetration is only 0.5 or so %, which is lower compared to more mature markets like the US... there is big headroom for the overall industry to grow in this space.”

In an interview with PTI, Devanathan said India is the leading market for short-form video Reels' watch-time on Instagram. The Facebook and Instagram parent Meta is upbeat about the pace and extent to which Reels has caught on with creators and brands alike.

"Reels is big for Meta globally, but Reels is certainly huge for Meta in India," Devanathan said.

Having recognised the power of Reels in influencing buying decisions, brands are including it early in their campaign blueprint and customer outreach plans, Devanathan said.

According to her, Reels is now in the consideration set for brands as they conceptualise their campaigns, marking a big shift in the way campaigns are being designed.

"Not only are we seeing the medium exploding in terms of consumption on our platform, but we are seeing brands and creators make use of that to get outcomes they want with their businesses and audiences," she said.

India is also the largest adopter of Meta AI, she said and added the company is "buoyed" by its uptake here, with users turning to the AI-powered chatbot for information on parenting tips to Onam Sadya (traditional vegetarian feast served during Onam festival).

Describing India as one of the key priority markets for Meta globally, Devanathan said the company is very excited about the prospects here and continues to double down and invest in the country.

"So, in terms of user growth, we are very excited by the opportunities and also in the value that we are driving for businesses," the top executive said.

Meta's optimistic outlook for the Indian market is supported by multiple factors, mainly the strong growth forecast for the economy.

The Indian economy is well-poised for growth and aspires to be a 7 trillion dollar economy in coming years, promising new avenues of opportunities, she added.

The optimism about India is evident in industry conversations and backed by factors like the demographic dividend with Gen Z and youth population, the momentum in the private sector, growth and innovation, the startup ecosystem, as also the strength of India's capital markets, she pointed out.

"All of this points to the larger trend of India rising to the economic superpower status that it has deserved for so long," Devanathan said.

"So, both in terms of growth potential we see in India, and the opportunity that exists as the ad market matures, and digital will grow as a piece of that pie... we definitely see ourselves as very well-positioned to help businesses succeed and hopefully share in their success as well," she said.

India is one of the largest markets for WhatsApp globally, with "great revenue momentum" and heightened interest around 'build for India'.

With more businesses embracing messaging to engage with their customers, Meta, last week, announced a slew of new features and programmes, including the full availability of a verified badge - a trust marker - for small businesses to establish credibility and credentials with consumers.

At the WhatsApp Business Summit in Mumbai, Meta also spotlighted Artificial Intelligence tools for enhancing the messaging experience.

To start with, Meta will make it easy to activate AI directly from the WhatsApp Business app to enable businesses to engage more efficiently with their customers - it has recently started testing this in India, and says early results are exciting.

The US social media giant also announced customised messages on the WhatsApp Business app, as it pledged commitment to supporting the growth of small businesses in India.

Meanwhile, Reels continues to supercharge Meta's growth in India, Devanathan said.

"If you look at some global statistics, about 50 per cent of all global watch hours are now Reels-driven watch hours. So, it is significant for us on the platform, that is on Instagram - and India is a leading country for Reels watch-time on Instagram," she said.

The 'MadeonReels' programme - launched last year to help brands understand the power of creators and the format - yielded strong results.

"What we are now seeing is brand organically build for Reels. So, instead of building at the bottom of the funnel, once the whole campaign is done...say when Diwali is upon us...sort of putting something together... Reels are now becoming part of early planning by brands, and it is already in the consideration set when they think about their campaigns. That is a big change we have noticed," she said.

India is also the largest adopter of Meta AI, she said, and pointed out that "Indians love Meta AI, which is great".

While it is still early days for Meta AI, the company is "buoyed" by the takeoff it has seen and conversations that are unfolding on it.

Meta Platforms topped street expectations for second-quarter revenue and gave a strong sales outlook for the third quarter amid healthy global advertising demand.

Globally, Meta's revenue rose 22 per cent to USD 39.1 billion for the April to June quarter.

"Last year, we talked about how our hope is that Meta India continues to also be a big contributor to Meta Global's growth and I am happy to say, we continue to do well in the country. While we do not break down the numbers for India, what it means is that businesses large and small are finding value on our platform, be it Facebook, Instagram or WhatsApp," she said.

Meta wants to keep up the momentum in India, and be "the best rupee that an advertiser can spend" on the platform, she added. PTI MBI BAL BAL