This is why you should prioritize Video OTT Advertising in 2020

Online video advertising

Backed by cheap data rates and throat cut competition among more than 30 OTT platforms in the country, people have warmed up to the idea of including video OTT platforms in their daily entertainment routine.

In this article, we would delve into reports by industry leaders like KPMG and BCG to learn how consumer behavior around Video OTT content consumption is evolving and why video OTT advertising is the future of digital advertising. Following are 4 reasons that we are going to discuss in this article:

  1. Video OTT usage not restricted to metro cities and premium users
  2. Favorable strategies leading to the growth of digital OTTs
  3. Comparatively uncluttered environment and a higher level of engagement
  4. Psychometric targeting options

India leading the digital adoption race

Image Source: KPMG India’s Media & Entertainment Report 2019

In 2016, there were only 200 million people in India who were connected. With the introduction of Reliance Jio, data costs came down drastically that led to the addition of more internet users to make it 563 million internet users by March 2019. The same is expected to become a billion by 2030. The above image summarizes the factors that have helped India to lead the digital adoption race.

Image Source: KPMG India’s Media & Entertainment Report 2019
Image Source: KPMG India’s Media & Entertainment Report 2019

In the image seen above, almost 94% of the urban population is connected in one or the other way. In rural areas, this number is hardly 25% of the urban population. But the good news here is that there has been a rapid rise in the digital consumers in non-metros and rural areas. Another good news is the increasing number of female population being introduced to the internet.

The biggest gainers of this phenomenon are video OTT players. It is estimated that by the year 2024, there would be 580 million OTT users with the daily average time spent about 30 minutes watching videos. While there is an unprecedented growth in viewership of video OTT platforms in India, according to a report by BCG and CII, an increase in advertising spend on video OTT platforms has been slower.


What is referred to as OTT platforms?

OTT refers to Over-The-Top. This term originated in terms of a television set-top box. Video platforms that do not require the TV set-top box to be accessed are known as Over-The-Top platforms. The same term has been extended to audio OTTs as well.

Following is the classification on various Indian video OTT platforms based on ownership:

  • TV Distributor: TV distributors like Videocon, Tata Sky and Dish TV have introduced their own OTTs. Access to these platforms is mostly available to TV subscribers.
  • Telecom Companies: Telecom companies like Jio and Airtel have their own OTTs that mostly offer curated content. Access to these platforms is mostly available to the Telecom subscribers.
  • Companies with content presence: These are mostly owned by content-generating companies. These are mostly free of cost. The videos on the platforms are sponsored content by advertising brands.
  • Broadcasters: TV broadcasters like Star, Sony, Zee, and Colors have their own video OTT platforms. They mostly contain the old TV contents as well as new curated contents. These follow the AVOD and Freemium, pricing model.
  • Independent companies and platforms: Companies like Netflix, Amazon Prime, Eros Now, Hungama, etc.

The platforms can be further classified into the following based on their pricing model:

  • AVOD (Advertising Video on Demand): Video OTT platforms that provide access to content for free and earn money through advertising. Ex- Voot
  • SVOD (Subscription Video on Demand): Video OTT platforms that provide access to content for a subscription fee. These usually don’t allow advertising on their platform. Ex- Netflix
  • Freemium: Video OTT platforms that have some content available for free and some behind the paywall.
Image Source: KPMG India’s Media & Entertainment Report 2019

Here are four reasons that show why 2020 is going to see significant growth in video OTT advertising and should be included in your advertising plan:

#1: Video OTT usage not restricted to metro cities and premium users

One of the biggest myths that our customers mostly have about video OTT platforms is that the usage of these platforms is restricted to the premium users (NCCS A population living in metro cities). KPMG recently shared it’s Media and Entertainment Report where they have classified the Indian digital consumers into four categories:

Digital Video Users Classification
Source: KPMG India’s Media & Entertainment Report 2019

Based on the table above, we can infer the video OTT advertising insights:

  1. Digital Sophisticates (3%): These are the premium digital audience who adopted digital before 2016 and have moved on to premium content through paid subscription platforms which are primarily ad-free (except live matches). These are only 3% of the total digital population of India. These are not the primary video OTT advertising audience.
  2. Digital Enthusiasts (36%): This category has both premium and the non-premium audience who mostly consume data in native languages on smartphones. With 36% of the digital population of India, these people primarily access OTTs to catch up with TV content and access regional channels. Both digital enthusiasts and digital mainstream form the primary audience for video OTT advertising.
  3. Digital Mainstream (59%): This category which forms the highest percentage of the digital population consumes most of the data in regional language. The primary reason for this category for coming to digital is to consume free and bundled content. This category is the primary audience of AVOD and hence, video OTT advertising is the perfect way to reach out to this population.
  4. Fringe Users (2%): This population that forms only 2% of the total digital population is hardly regular on video OTTs except for bundled content, for example, offered by Jio TV. This population is beyond the scope of video OTT advertising.

#2: Favorable strategies leading to habit building

In the past few years, video OTT platforms have implemented several strategies to eliminate the friction that prevents connected users from subscribing to video OTT platforms: (Source: The Trillion Touchpoint Story by BCG and CII)

  • Free trials and affordable monthly subscriptions: Premium platforms offer free trials and affordable monthly subscriptions to help people get over the hesitation to try out video OTT.
  • Partnerships: With bundled offers with Telecom brands and cross channel partnerships, people get hooked to new video OTT platforms.
  • “Relevant” Content: From showing old TV content, Video OTT platforms have evolved to include content tailor-made for all strata of the audience including teen, youth and regional audience, etc.
  • Increased Awareness: Video OTT platforms are spending a large amount of money to promote original video OTT content through OOH, YouTube video ads and display ads. This has lured a number of internet users to opt for video OTT platforms.

#3: Comparatively uncluttered environment and a higher level of engagement

As discussed earlier, video OTT platforms are seeing a growth much faster than the growth of digital advertising. This makes video OTT platforms comparatively less cluttered than television in terms of advertisements.

Image Source: KPMG India’s Media & Entertainment Report 2019

According to the report, The Trillion Touchpoint Story by BCG and CII, advertisements running on video OTT apps are more engaging than ads running on traditional TV.

About 55% of commercial breaks on TV are mostly spent on switching channels, multitasking and skipping content. By design, video OTT platforms are on-demand and hence, the content is more engaging. Also, since the ad breaks in OTT platforms are much smaller than that of TV hence making it easier for the audience to watch it completely. The less clutter in video OTT ad space also leads to higher chances of ad recall for digital video ads.

#4: Psychometric Targeting Options

(Image Source: The Trillion Touchpoint Story by BCG and CII)

When asked, marketing managers agreed to the fact that video OTT advertising provides detailed targeting options for video advertisers. 

(Image Source: The Trillion Touchpoint Story by BCG and CII)
  • Brand Intent: People who looked up for a particular brand
  • In-Market: People who are actively searching for a product
  • Socio-Demographic: Based on people’s age, gender, location, income group, etc
  • Psychometric: Based on people’s behavior like interest, habits, spending habit, apps already present

Targeting Preference Decoded: The above image shows the targeting approaches of the top three industries that contribute almost 50% to digital advertising in India. Not only product/brand searches or demographic filters like age, gender, income or geography, brands nowadays want to engage with the audience portraying specific interest/behavior. For example, a toothpaste brand might want to show its ads to foodies especially people having a sweet tooth. This type of targeting is complex and can happen only when consumers’ online behavior is tracked for a long time. Most video OTT platforms offer this type of targeting.

Following is a table that summarizes the type of targeting offered by each video OTT platform: (Source: The Media Ant Internal Data)

Type of targeting options offered by Video OTT platforms

Through this article, we have tried to cover the latest insights into video OTT advertising in India. If you would like to know something more about video OTTs, you can check out our previous article about the audience profile of the OTT platforms and which one would suit your brand the most.

In case you have any more questions on video advertising on OTT platforms, let us know in comments or by writing to us at

You can also visit this link to know the advertising rates for various video OTT platforms.

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