Regional language content startups see spurt in ad revenues

New Delhi: Indian language content startups, such as Dailyhunt, ShareChat and NewsDog, are increasingly becoming an attractive advertising platform for brands to woo non-English speaking users, considering the rapid growth in their user base. Indian language internet users are growing at 13% annually, against a mere 1% growth in English-speaking internet users, according to report by RedSeer Consulting.

Currently, digital ad spending in India accounts for $2.9 billion, or 19%, of the total ad spending by brands. Total advertising expenditure is estimated at $12 billion, according to RedSeer analysis. Digital ad spending is growing at 2.5 times the overall growth in ad spend.

However, a majority of the digital ad spending still goes to Google and Facebook, leaving little for the thousands of other internet platforms, including startups.

Indian language content startups such as social network ShareChat, news aggregators Dailyhunt and UC News, and video content app Tik Tok, among others, are witnessing double-digit growth, and have accumulated a substantial user base, the report said.

Dailyhunt, which has 120 million monthly active users, has seen nearly 80% growth in its user base in the third quarter of 2018, the report added. Others, including ShareChat, Alibaba’s UC News, and Tencent-backed Newsdog, have witnessed user growth rate of over 30% in the quarter.

Facebook and Youtube, who have 271 million and 225 million monthly active users, respectively, are also growing at over 30%.

Even though content startups are accumulating a large number of users, they are facing challenges. For one, many local content players rely on user-generated content, which is making advertisers wary of such platforms.

Additionally, it is important for news aggregators and content platforms to have high-paying capacity users to successfully convert user traffic into revenue. Digital ads on content and video platforms need to be in Indian languages to engage better with audiences in Tier 2 and 3 cities, the report said.

According to the report, Facebook, YouTube, Dailyhunt and Instagram, among others, have better content from more trusted sources. Others like NewsDog and UC News have relatively low-quality content.

The report added that excluding Facebook and Instagram, the other six content startups have been able to seep into the Indian language target segment and are focusing on growing it. However, only Instagram, Dailyhunt and Facebook have so far been able to tap users who can pay.

“Published generated content players will achieve monetization faster than players banking on user-generated content to achieve scale without putting proper checks and balances on quality,” said Ujjwal Chaudhary, associate director, RedSeer Consulting.