MxMIndia

Tag: Dentsu Agies Network

  • Younger adults are hooked on to streaming services, notes a DAN report, writes Indrani Sen

    How India’s Gen Z is addicted to Streaming

     

    By Indrani Sen

     

    Covid-19 has transformed the media consumption trends in India. Globally, streaming platforms gained in a big way since the pandemic struck and India is no exception. The report published by Dentsu Agies Network – “Now Streaming: The Indian Youth OTT Story” – is a study conducted among urban India’s Gen Z & Millennial reconfirms this trend. These trends could be reflecting behavioural changes of the two younger generations which are likely to last even after the cloud of pandemic shifts from the Indian sky. The highlights of the findings from the report are shown below:

    Source: https://dentsumarketing.cloud/dmcinsights.php

     

    As many as 74% of the respondents came from the Top 8 metros with 26% coming from rest of urban India. 47% of the respondents were male and 52.2% were female. 78.5% came from Gen Z (5 to 25 years) and 21.5% came from Millennials (25 to 39 years).  The report therefore cannot be taken as uniform trends across urban youths across India but trends which are visible among youths residing in the top 8 metros and mostly below 25 years of age. They are, however, the future targets of marketing and advertising in India.

     

    Average daily time spent in hours
    Gen Z Millennials
    On line Gaming 1.97 1.11
    Binge Watching 4.45 3.66

     

     

    Among the various OTT platforms, Amazon Prime and Netflix lead the pack, followed by Hotstar. The other OTT platforms are yet to build up significant presence among the Indian youths. Gen Z spends more time than Millennials both on gaming and binge watching on OTT platforms.

     

     

    The choice of genres by the two sections of youth explains the popularity of the top three platforms which offer more content as per their preference. Zee 5, Voot, Jio, Sony Liv, etc have less content to offer in the Comedy, Action, Thriller and Science Fiction genres. Amazon Prime, Netflix and Hotstar have also invested more in production of original content. However, the report has also shown that both in North and South India across different demographics the primary usage of OTT platforms were for viewing TV shows and movies.

     

    During the lockdown north Indian youths invested on an average in three OTT subscriptions than their counterparts in south India who invested on an average in two OTT subscriptions. The Gen Z invested on an average in 3 OTT subscriptions while Millennials invested in 2 OTT subscriptions during the same period. The report does not give details of the demographic profile of the sample, but we can safely assume that the sample was skewed towards higher SECs as indicated by higher spends on OTT subscription by Gen Z, most of whom would not have been financially independent and had to ask their parents for the subscription money. Obviously their parents were not financially affected due to the economic slowdown during the lockdown and could afford to indulge their children. The report therefore captures mainly the trends of OTT consumption of urban youths from 5 to 25 years age belonging mostly to NCCS A and the top 8 metros.

     

    The report has also captured that 73% have no concern about the content of the OTT platforms. The other 27% have stated obscene content, anti-national content, strong and bold language of the content as well as content hurting sentiments of religion/ caste as causes of concern related to OTT platforms. On the other hand all respondents had concerns about internet connections, pop-up ads and buffering related to steaming of the contents. Both Millennials and Gen Z have shown a clear preference for OTT services and believes that the positives factors outweigh the negatives.

     

     

    The report concludes that content distribution, attractive marketing, transitioning the gaming industry and personalisation are the key factors which is helping consumption of OTT platforms to dominate over consumption of traditional TV viewing. The analysis does not mention about the tie ups between OTT platforms and Telecom giants like Airtel, VI and Jio, a practice which began in 2017/ 2018 and has been continuing since then.

     

    As per the range of packages offered by the three telecom companies, it appears the leading OTT platforms do not believe in exclusive tie ups with any single telecom company and have created a level playing field for all the service providers by having tie ups with all of them. It seems this survey did not probe into this aspect of free subscription with mobile connection among the Gen Z and Millennials, most of whom would have been enjoying some such free benefits through a single sign in. The findings of the reports outweigh the apparent skewing of the sample and a few gaps and have provided all of us a crystal globe for gazing into the future of media consumption.

     

     

  • After the first giant leap from 2016 to 2019, in three more giant leaps digital advertising could achieve fantastic growth, writes Indrani Sen

    The Four Giant Leaps

     

    By Indrani Sen

     

    According to the DAN Digital Advertising Reports, spends on digital advertising in India is increasing by 100%+ every three years and is poised to cross the 50,000 crore milestone before 2025. It was only in the second half of the last decade, the Indian advertising industry crossed the milestone of 50,000 crores, so it seems strange that the newest and youngest competitor for the share of the advertising pie will be crossing that same milestone by middle of this decade! We have already witnessed the first giant leap from 2016 to 2019 and it seems quite possible that in three more giant leaps digital advertising will achieve this fantastic growth.

     

    Digital Advertising Spends in India (Rs Crore)
     First Leap 2016 2019 Growth %
    6,228 13,683 120
    Second Leap 2017 2020 F Growth %
    8,202 17,377 112
    Third Leap 2019 2022 F Growth %
    13,683 28,249 106
    Fourth Leap 2022 F 2025 F Growth %
    28,249 58,550 107

    Source: DAN Digital Advertising Reports

     

    The question which comes up next is which industry verticals are contributing to this spectacular growth of digital advertising? An analysis of the DAN Digital Advertising Reports show that almost across all industry verticals, advertisers have been increasing their spends across various platforms of digital advertising. The following table shows the comparative weightage on digital advertising by industry verticals in their total advertising budget in 2017 and 2019. Except Media & Entertainment where the weightage has remained 23% and miscellaneous small categories grouped under “others” where the weightage has gone down, across all other industry verticals, advertisers stepped up their expenditure on digital media. Digital media is no longer a myth; it is a reality now competing for share of the advertising pie and propelling the growth of advertising in India.

     

    Weightage on Digital Advertising
    2017 2019
    FMCG 7% 19%
    Auto 12% 16%
    E Commerce 30% 37%
    Retail 16% 20%
    Telecom 28% 35%
    BFSI 24% 42%
    M&E 23% 23%
    Consumer Dur 19% 38%
    Others 9% 4%

    Source: DAN Digital Advertising Reports

     

    Though FMCG as a category spends 19% of their advertising budget on digital media, it contributes 27% of the total digital advertising pie, followed by E Commerce 19%, Consumer Durable 11%, BFSI 10% and Telecom 9%, followed by others as shown in the chart below on the left. So, across all industry verticals, advertisers have got into the Indian digital bandwagon.

     

     

    The next chart on the right shows that based on the target audience and their use of different digital media, the various industry verticals use the different digital formats for advertising; while E Commerce and BFSI rely more on paid search, Retail and Telecom rely on Social Media. However, a comparison of 2017 and 2019 shows that the share of formats in digital advertising have hardly changed except video increasing at the cost of classified and paid search.

     

    2017 2019
    % %
    Social 28 28
    Paid Search 26 25
    Display 21 21
    Video 19 22
    Classified 6 4

    Source: DAN Digital Advertising Reports

     

    In 2017, 43% of the digital advertising was through mobile, which increased to 47% in 2019 and is expected to grow to 53% in 2020. Clearly, the mobile revolution in India has contributed in a large way to the growth of digital advertising. By the time digital advertising crosses the 50,000 crore mark mobile will have 60% + share in that revenue. Programmatic buying has also been growing year on year and by 2020 direct buying will be 44% with programmatic buying going up to 56%.

     

    The digital media industry still faces many challenges, but apart from a detail discussion on ROI for digital advertising, the current report does not touch on the other issues like ad fraud, ad blocking software, lack of metric for measurement etc. On the whole, the DAN e4m Digital Report 2020 is an informative and excellent resource and the advertising and marketing industry should be thankful to the leadership of Dentsu Agies Network for sharing it free with all concerned.

     

     

  • …we must have a robust economy and the solid financial infrastructure leading to a favourable exchange rate with US$, writes Indrani Sen

    In the race to the top of M&E industry…

     

    By Indrani Sen

     

    In early June, PWC released their Global Entertainment and Media Outlook 2018-2022 predicting that in India the Media and Entertainment(M&E) industry will grow at a compound annual growth rate (CAGR) of 11.6% growth of between 2018 to 2022 (https://brandequity.economictimes.indiatimes.com/news/media/indias-me-industry-to-clock-over-rs-353609-crore-by-2022-pwc-report/64477039). This growth rate will be 2.5 times the growth rate of 4.4% predicted for the global M&E industry. However, in terms of M&E revenue per capita in US$, the developed countries will be far ahead and in 2021 US M&E per capita revenue ($2260) will be 10 times of China ($222) and 70 times of India ($32).

     

    Source: PWC Outlook 2018-2022

    The PWC analysis also predicted that India will earn a place among the Top 10 countries in terms of absolute revenue for M&E industry by 2021, a fact which is extremely reassuring given the exchange rate of INR and US$. Among the BRICS countries, China, India and Brazil will be among the top ten countries in terms of absolute revenue of M&E industry. China will overtake all other countries and will be in the number 2 position after US, followed by Japan, Germany, UK, South Korea, Canada, India and Brazil.

     

    Source: PWC Outlook 2018-2022

    Last week, the Dentsu Agies Network predicted that adspend in India will grow by 12.5% in 2018, a substantial increase from 9.6% in 2017 and against a global growth of 3.6% in 2018, up from 3.1% in 2017 (http://www.mxmindia.com/2018/06/dentsu-adspend-forecast-for-2018-down-from-12-5-to-10-5/) The advertising market in India is forecast to grow by a further 12.5% in 2019. Ad spend is a component of the total M&E industry, but any small fluctuation in the affects the industry’s overall revenue and growth. It is reassuring to find that the DAN Global Advertising Forecasts (January 2018)based on data received from 59 markets, supports the trend predicted by PWC in their overall forecast for the M&E industry and particularly for India. Both the studies agree that the future growth will be driven by various forms of digital media. DAN forecasts that during the current year, digital media spend in India will increase by 30% with 43.6% growth in mobile spend, accounting for 47% of total digital spend in 2018.

    In a comparison of the growth rate in adspends across countries the Dan report shows that only India will continue to enjoy a double digit growth rate over the period 2016-2018. Russia and Lain America, who had similar two digit growth rates in 2016, are going to experience declines in their growth rates over 2017 and 2018.

     

    Global Ad Spends 2016-2018

    Source: DAN Global Ad Spends Forecast (January 2018)

     

    Going back to the forecast of PWC, after attaining a place among the first ten countries in terms of absolute revenue in 2021, India’s next goal should be to attain a position among the top five countries. Apart from the growth which will come from within the M&E industry fuelled by technological changes and ad spends growth, we will need to improve our exchange rates with other foreign currencies, particularly the US$ which is used as the currency for global comparisons. How much demand there is in relation to supply of a foreign currency determines that currency’s value in relation to the local currency.Other geopolitical and economic indicators that affect the exchange rates between two countries are changes in interest rates, unemployment rates, inflation reports, gross domestic product numbers, data on manufactured commodities, etc. So, in the race to the top of M&E industry we must have a robust economy and the solid financial infrastructure leading to a favourable exchange rate with US$.