OTT players to invest Rs 2.5 bn in content creation & distribution: MMA-GroupM

India’s Internet user base is forecasted to grow at a CAGR of 10 per cent from 2019 to 2023. As of Q1 2019, India has an active user base of 451 million, while the Internet penetration hovers over 36 per cent. This was revealed in the third edition of ‘Mobile Marketing Ecosystem Report 2020’, launched by The Mobile Marketing Association India (MMA India), in collaboration with GroupM. The report further states that the global smartphone devices are estimated to be around 3.8 billion. While China has the most number of active smartphone users, India stands at 2nd position with 502 million smartphone users. 

This year’s theme for the report revolves around how mobile is a bigger platform than digital platforms. The report also delves deep into various trends impacting consumers and marketers, and highlights reasons why it’s necessary to go beyond the traditional realms of digital marketing to drive business and brand outcomes. It analyses where mobile marketing stands today, what has led us here and what the future holds. Marketing to a generation of mobile users in the most effective way is only possible with a true understanding of these users and the platforms they so ubiquitously utilise. 

For the first time, the report incorporates POV (point of view) articles from industry experts like Sandeep Bhushan, Director & Head, Global Marketing Solutions, Facebook; Madhubanti Banerjee, Director, Marketing Effectiveness, Nielsen Media, South Asia; Gulshan Verma, SVP & Head, Client & Agency, Hotstar; Sameer Singh, Vice President, Monetization, TikTok India; Niraj Ruparel, Head – Mobile, Mindshare; Amit Relan, Co-founder & Director, mFilterIt; and Rohit Sharma, Founder & CEO, Pokkt Mobile ads. From metrics evaluation, brand safety, mobile entertainment to gaming and voice/audio marketing, these opinion pieces from industry leaders will help marketers to understand the gaps in content, measurement and brand safety, which are widely acknowledged as key industry challenges. 

Speaking on the announcement, Moneka Khurana, Country Head, MMA India, said, “Considering the importance that mobile marketing holds for brands, marketers must be armed with the information on the trends and changes in the landscape and leverage the opportunities they provide. With the ecosystem report, our aim is to highlight these trends and opportunities, some of which have already become active in 2019 and will likely form vital elements of mobile marketing campaigns in the coming years. It is our hope that this report acts as a guide for marketers, highlighting the key focus areas, their challenges, and helping them to decipher what they must expect from this ever-changing mobile ecosystem.” 

Prasanth Kumar, CEO, GroupM South Asia, commented, “India will continue to witness an upward trend in the growth of mobile ad spends this year. Cheaper data tariffs, the exponential growth of entertainment on mobiles and a variety of smartphones have led to the emergence of ‘mobile-first consumption’ users in the country.” 

“India is a diverse and mobile-first country, and this will further boost the growth of mobile advertising compared to digital. The availability of content in regional Indian languages is driving consumption of the mobile Internet in India. We have also witnessed the use of e-commerce apps on mobile phones growing in the last few years. With a mix of utilities, mobile is going to be bigger and better in the country.” he added. 

Rise of OTT 

With more than 30 OTT players and 10 music streaming apps in existence catering to various entertainment and media demands, Indians are prone to consuming content across an array of digital formats and platforms. At this rate, soon, the focus is bound to shift towards the monetisation of content. 

The report states that identifying an immense potential for original content, OTT players are estimated to make hefty investments of approximately Rs 2.5 billion for content creation as well as distribution. 

Pioneered by YouTube, original content creation and programming for the space of digital media has come a long way. The journey began with independent Youtubers engaging their followers with User Generated Content, further giving birth to large-scale content creators such as Dice Media and TVF that introduced original webisodes, specifically catering to the taste of the Indian consumer. 

To balance out the above capital investments, OTT players have further strategically introduced basic affordable packs, for example the ‘Hotstar VIP’ low-cost subscription pack and Netflix powered ‘mobile only’ plans introduced at 50 per cent cheaper rate. Amazon Prime and Netflix have even tied up with multiple renowned film production companies to produce cutting-edge original content. The latest entrant in the industry that has meticulously targeted regional content is ZEE5, which provided 100,000 hours of content at the time of its launch. 

Expressing his point of view in the report, Gulshan Verma, SVP & Head, Client & Agency, Hotstar, said, “As devices and data access get cheaper, we will see greater mobile entertainment consumption and newer technologies – all of which will make our mobile viewing experience richer.” 

He also turns the industry’s attention towards the following points:

• Mobile video is a key tool for brand-building now 

• The creative must be more than a 30-second ad spot or impression. Without social, gamification and content-driven experiences, it’s unlikely to work 

• RoI measurement must link to core business and marketing goals – whether that’s incremental sales to new footfalls or consumer perception changes 

Key highlights from the report: 

Ephemeral Content: Ephemeral content is a rich media format which disappears after a short duration. Due to its temporal nature, ephemeral content forces creator to be more spontaneous and thus increases the likelihood of the content being authentic. 

AI: About 80% of large corporate giants have adopted some or the other form of machine learning in building new competent systems, complementing their core business. 

E-Wallets: India’s local UPI (Unified Payments Interface) platform crossed the 1,000 million-user mark in October 2019, making it one of the fastest adopted payment gateways in the world, leading to a massive rise in social commerce. 

Gaming: There are approximately 250 million mobile gamers in India, spending about 60 minutes every day playing mobile games. 

OTT: With more than 30 OTT players and 10 music streaming apps in existence catering to various entertainment and media demands, Indians are prone to consuming content across an array of digital formats and platforms. 

Original Content on OTT: OTT players are estimated to make hefty investments of approximately Rs 2.5 billion for content creation as well as distribution. 

Influencer Driven Content: Marketers believe that influencer marketing helps them engage with customer in an interactive way and thus, 80% of them would increase ad spend next year. 

Video: With attention spans of consumers being short, short-format advertising content is key. Currently, India is the sixth largest market in consumption of video ads. 

Vernacular: 90% of new Internet users over the next five years are expected to prefer regional languages to access the Internet. 

Voice: 25% of search queries in India are through voice commands. 38% of consumers who have engaged with voice ads find it less interfering as compared to other forms of advertising. 

MarTech: CRM to programmatic ad buying, automation and artificial intelligence are making the advertising process more efficient. Nearly 80% of large corporates have adopted machine learning in some form; 30% of new-gen start-ups. 

Measurement Metrics: The key metrics that matter to business are output metrics, Brand and Sales metric. Very often, advertisers measure input metrics as a way to quantify or metricize their advertising efforts. While these metrics are important to ensure hygiene and efficiency of campaign input, these are not output metrics that ultimately matter to business growth. 

Current mobile landscape statistics: 

• India has active user base of 451 million, while the Internet penetration hovers over 36% 

• Currently, across both rural and urban areas in India, 99% of users are using the internet on their mobile phones 

• Along with cheaper data plans, smart phones have also become more affordable, allowing wider access 

• Out of a population of 1.3-1.4 billion, India has 1.16 billion mobile subscribers, comprising 700 million unique mobile subscribers 

• With the increase in number of mobile phones, time spent on mobile also grew to 3.7 hours per day which is a 25% jump as compared to 2017 data 

• Currently, data in India is priced at USD 0.26 for 1 GB, as compared to the global average of USD 8.53 per GB 

• In the third quarter of 2019, the smartphone market in India shipped a whopping 46.6 million units, fuelled by launches of new models, online sales and price corrections 

• In 2019, consumers downloaded a record 204 billion apps worldwide, spending close to $120 billion, which is 2x of 2016 spending 

• Among all active mobile Internet users in India, which stands at approximately 451 million, entertainment is the purpose for a whopping 84% 

The report is in line with the mission of The Mobile Marketing Association India, to consistently strive to create a pool of resources that marketers can consult while building futuristic strategies, to stay abreast and adopt mobile advertising at scale. It also continues to build on its vision, ‘Shape the Future’ through breakthrough studies, thought leadership, setting standards and optimising current activities and constantly monitoring mobile market trends.