‘CTV has potential for increasing ad spends and reaching a targeted audience’

It is a new age for television due to the advent of Connected TVs in India, said Shashank Srivastava, Maruti Suzuki India’s Senior Executive Officer - Marketing and Sales - said on Friday at the e4m Connected TV Conference 2023.

Srivastava asserted that CTV has the potential for not only increasing ad spends, but also for reaching a targeted audience.

Delivering a keynote address at the inaugural edition of Connected TV Conference 2023, Srivastava said Maruti Suzuki has been leveraging OTT platforms on Connected TV (CTV) and mobile as a part of their brand campaigns.

“At Maruti Suzuki, we have been leveraging OTT platforms on CTV and mobile as a part of our brand campaigns but it is not really the main thrust. We believe it delivers just 2-3% incremental reach over television reach for various campaigns.”

Sharing insights in the context of sporting events, he said: “As part of our association spending, we are now specifically leveraging CTV with TV and mobile to target cord-cutters during key sporting events like FIFA and IPL. CTV advertising in India is expected to grow from Rs 450 crore to Rs 3,500-crore plus. That’s the estimate we have made for the next 5 years.”

Sharing his views on ‘Becoming Future Ready with CTV Advertising’, he said with the dawn of the internet age for television, there is a disruption in the world of advertising, not just for television but for digital spends too.

“CTVs are slowly bridging the gap of digital marketing and it has got many advantages. It has robust data targeting, superior measurement with the benefit that television provides – a large screen, great imagery and larger stickiness,” Srivastava said.

Talking about the statistics, he said 90% of televisions sold are now smart TVs, up from about 67% a year since 2021.

“Looking ahead, almost 5% of the 262 million television households in the next three years will be cord-cutters (non-cable TV options). As per a recent report, almost 83% of the smart television owners watch content using the internet,” he observed.

He further said that India has emerged as one of the fastest-growing markets in the world with respect to advertising spends, clocking almost Rs 90,000 crore in 2022. That’s a growth of almost 21%.

“The forecast is that this number is going to cross Rs 1 lakh crore in 2023 as the expected growth rate is 15-16%,” he said, adding that India ranks 9th in terms of ad spends.

Indian ad spending has a huge potential to grow exponentially in the future, Srivastava noted.

“In India, the current reach of television is about 800-900 million and it is higher than any medium, including digital where we have 450-500 million active users,” he said.

As per the data shared by Srivastava, in 2022 TV’s ad spends grew to approximately Rs 31,000 crore, and is further expected to grow around 9% this year to Rs 33,000 crore, considering major sporting events like the IPL, Women’s Premier League, the cricket world cup, and the thrust from FMCGs on television spends.

“TV penetration in India is expected to touch 76% in the next 3 years from the current 70%. India is set to become the third largest television market globally by 2026, and third largest television advertising market by 2024-25,” he said.

Srivastava also asserted that TV as a medium is not cluttered and is thus very impactful with respect to image-building, especially at the time of a new brand launch.

“In two out of three households, they prefer connected TV as a primary mode to access television. While the number of CTV households is expected to cross 40 million by 2025, it is important to note that the population of CTV is bound to grow in a big way,” he said.

“All this is being boosted because of high-speed broadband and 5G. For our economy, the scope of growing ad spends could not have come at a better time, thanks to the advent of this era of CTVs and STVs,” he said.

Srivastava also observed that though there is a decline in linear TV, it remains effective and efficient. If paired with rising CTV viewership, CTV can really aid linear TV to deliver a much more targeted audience.

“Even when recognising the continued decline of linear TVs, the decline of about 11 % in 2021 and 8% in 2022, the fact remains that linear TV still provides a very effective, efficient, and immediate reach in a premium and brand-safe environment.”

However, he pointed out that higher cost of OTTs vs Pay TV could impact the growth of cord-cutting in India. “We need to be wary of structural challenges, which may impact the growth of cord-cutting in India like the higher cost of OTT vs Pay TV as the monthly rentals are 3-4 times higher.

“Then there is a matter of fixed broadband connections. With approximately 31 million fixed broadband connections in India, as per the TRAI report. Fixed broadband penetration is at 9% in India. That compares very unfavourably with 95% in developed nations. So, the development scenario for the transition of linear TV to connected TV is indeed going to be very different,” he said.