Better broadband penetration, more Connected TVs

A smart TV is defined by its operating system, the ability to connect to the internet and run internet-enabled services. Photo: iStock
A smart TV is defined by its operating system, the ability to connect to the internet and run internet-enabled services. Photo: iStock

Summary

Addressable advertising accounted for 9.8% of total TV ad revenues in India last year, with total active connected TV households of nearly 34 million.

With improvement in broadband penetration, Indian households are increasingly opting for connected or addressable TVs. As of the end of last year, India had 33-34 million addressable TV households, and the number is expected to reach 45 million by the end of 2024, amounting to 21% of the total TV households, as per GroupM’s second edition of ‘The Changing Landscape of Indian Television’ survey. This is a 32% increase over 2023.

The survey on the state and potential of addressable TV in India is done by Ampere Analysis which received responses from 4,000 respondents and delves into the transition from linear TV to Connected TV (CTV) within the Indian TV industry, highlighting the transformation in audience media consumption patterns.

“When we published the first edition in December 2022, we had forecasted that addressable TV household is expected to surpass 40 million by 2025. And we are very happy to admit that the rapid growth and the potential this medium has shown has exceeded all our expectations," said Rajiv Rajagopal, head-advanced TV, GroupM Nexus.

He added that there has been rapid, yet consistent, growth across India. “Initially, more than 85% of the CTV penetration was from the metros, which isn't the case anymore. Today we are seeing that the Hindi-speaking markets have witnessed 4X growth in the last 12 months. These include Maharashtra, Haryana, UP, MP, Jharkhand, Uttarakhand, Chhattisgarh and Bihar. Down south, Karnataka leads growth with 7X growth," he said.

The survey finds that addressable advertising, or advertising via connected TVs, presents unprecedented opportunities to refine audience targeting and is set to surpass 13% of total TV (linear TV and digital extensions of TV) ad revenues in India by 2025—underscoring a substantial shift in the advertising paradigm. It reflects the growing importance of targeted and personalized approach in Indian marketing.

When asked about the gap between the penetration of addressable TV and ad revenue contribution, Rajagopalan said that therein lies the opportunity or potential to bridge the gap for CTV advertisers. 

“Based on our respondents’ data, pay-TV remains the most common means of TV access. Seventy-five per cent of the respondents have claimed that they have watched one or more pay TV services in the last month. That means that linear TV is here to stay. What has changed is only the modes of distribution and it just got more fragmented," added Rajagopalan.

Atique Kazi, president – Data, Performance & Digital Products – GroupM India, said the impact of these findings for advertisers is positive and has opportunities for advertisers.

“It's becoming more and more crucial for advertisers to adopt a total TV planning approach and not just operate in silos. If you do a separate TV plan, a separate mobile OTT plan, and a CTV plan, you are creating a lot of cracks in your overall strategy. So we ask our clients to adopt a few planning scenarios which they can gain from. And those planning scenarios are mostly in the areas of creating better efficiency with less spillage," Kazi said.

Meanwhile, the surge in Connected TV advertising, anticipated at a 31% CAGR, underscores the pivotal role it plays in reshaping the television ecosystem, he said.

The survey also highlighted that two-thirds of the respondents found ads on OTT services more appealing and relevant than their linear TV counterparts, and 41% were willing to view ads on OTT Services to reduce subscription costs. 

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