Potential of CTV advertising in India: Revolutionising how ads are targeted and delivered

Connected TV (CTV) advertising has emerged as a formidable force in the digital advertising ecosystem. With its ability to deliver targeted, engaging, and measurable ad experiences, CTV is capturing the attention of brands across industries. According to Statista, as of 2023, the ad expenditure on CTVs in India accounted for $86 million. With the fast-increasing adoption of CTVs in India, it has been forecasted that CTV ad spend will increase fivefold by 2027. As per a VDO.AI report, India’s CTV users are expected to reach 40 million by 2025. The report further states that connected TV is the preferred connection at 65% Indian homes, comprising smart TVs, devices such as Firestick, and Internet-enabled set-top boxes versus 35% linear (cable and DTH).

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In this two-part report, Adgully does an in-depth analysis of the growth of CTV advertising in India, and the numerous factors driving this growth. The report also tracks the emerging trends and opportunities in CTV advertising, besides dwelling on how to leverage CTV advertising for stronger brand awareness and recall; digital targeting and CTV’s immersive experience; impact of Generative AI on CTV advertising, and much more.

Growth of CTV Advertising

The cord-cutting phenomenon, coupled with the increasing popularity of streaming services, has fueled the rapid growth of Connected TV (CTV) advertising. As more consumers shift their viewing habits from traditional television to streaming platforms, advertisers are following suit. CTV offers a larger, more engaged audience with higher viewership compared to traditional linear TV. This shift has created a lucrative opportunity for brands to connect with consumers in a more personalized and impactful way.

Key factors fuelling growth

Technological Advancements: The proliferation of smart TVs has been a major catalyst in the shift towards CTV. These devices offer enhanced internet connectivity and app integration, providing users access to a wide range of streaming services and digital content. This has expanded the viewing options available and enabled advertisers to reach audiences through sophisticated digital channels.

Rekha Motwani, VP - Media, #ARM Worldwide, highlights, “Technological advancements have significantly contributed to the rise of CTV. The enhanced internet connectivity and app integration in smart TVs provide users access to a wide range of streaming services and digital content, expanding the viewing options available and enabling advertisers to reach audiences through sophisticated digital channels.”

Changing Consumer Habits: With time, consumer tastes and preferences have evolved, leading to an accelerated shift from traditional TV to streaming services. The demand for on-demand, personalized content has driven this change, making CTV platforms well-positioned to deliver.

Ambika Sharma, Founder and Chief Strategist, Pulp Strategy, notes “In recent years, the CTV advertising landscape has transformed swiftly, driven by a few key factors. The widespread adoption of smart TVs and streaming devices has made internet-connected viewing more accessible than ever before. As urban consumers increasingly cut the cord on traditional cable and satellite TV, they've turned to streaming services for their entertainment needs. This shift has been fueled by a demand for on-demand, personalized content, which CTV platforms are well positioned to deliver.”

Increased Internet Penetration: The rising popularity of over-the-top (OTT) streaming services and the increased penetration of high-speed internet have significantly expanded the CTV audience. This trend is especially evident in markets like India, where internet usage has surged.

Yasin Hamidani, Director, Media Care Brand Solutions, explains, “The CTV advertising landscape in India has seen significant growth in recent years. Key factors driving this expansion include increased internet penetration, the proliferation of smart TVs, and the rising popularity of OTT streaming services. According to industry reports, the number of internet users in India has surpassed 700 million, creating a vast audience for CTV content.”

Ad-Supported Models: The introduction of ad-supported tiers by streaming giants has opened up new opportunities for advertisers. These models provide content at lower or no cost to viewers in exchange for watching ads, broadening the audience base and providing advertisers with access to premium, engaged viewers.

Rekha Motwani adds, “The introduction of ad-supported tiers by streaming giants has broadened the audience base and provided advertisers with access to premium, engaged viewers. This has been particularly beneficial for brands looking to reach specific demographics that are more likely to consume digital content.”

Data-Driven Personalisation: The rise of advanced data analytics has revolutionized how ads are targeted and delivered. By leveraging user data, advertisers can create highly personalized ad experiences that resonate more effectively with individual viewers.

On this Motwani states, “The rise of advanced data analytics has revolutionized how ads are targeted and delivered. By leveraging user data, advertisers can create highly personalized ad experiences that resonate more effectively with individual viewers. This precision targeting enhances the relevance of ads, leading to higher engagement rates and better return on investment (ROI) for brands.”

Omnichannel Strategies: The integration of CTV with other digital advertising channels, such as mobile and Digital Out-of-Home (DOOH) advertising, allows for a seamless omnichannel experience. This cohesive approach ensures that brand messages are consistently delivered across multiple touchpoints, reinforcing brand recognition and improving overall campaign effectiveness.

Programmatic Advertising: Programmatic advertising has revolutionized the CTV landscape by automating the process of reaching the target audience precisely and efficiently. This method ensures effective ad placement, better return on ad spend (ROAS), and scalability.

Delphin Varghese, Co-founder and Chief Revenue Officer, AdCounty Media, comments, “Programmatic advertising has revolutionized the CTV landscape by automating the process of reaching the target audience precisely and efficiently. This method ensures effective ad placement, better ROAS, and scalability.”

Rise of First-Party Data: The shift to a cookie-less world emphasizes the importance of first-party data. Advertisers can seamlessly integrate their first-party data with CTV platforms to craft targeted and personalized ad campaigns, ensuring that the ad reaches the right people at the right time.

Varghese adds, “The shift to a cookie-less world involving first-party data helps craft targeted and personalized ad campaigns. Advertisers can seamlessly integrate their first-party data with CTV platforms, ensuring that the ad reaches the right people at the right time.”

Vikas Chawla, Co-Founder, Social Beat, noted, “CTV is amongst the faster growing trends in adex. The growth has been fuelled by two pillars – one is growth of on demand content on OTTs, YouTube and music streaming apps. The second pillar is quality and price of smart TVs and home entertainment systems.”

Emerging Trends and Opportunities in CTV Advertising

The CTV advertising landscape is rapidly evolving, presenting numerous emerging trends and opportunities. Industry experts share their insights on the dynamic nature of CTV advertising and the key developments shaping its future.

Programmatic Advertising

Ambika Sharma of Pulp Strategy highlights the significance of programmatic advertising, stating, “The CTV advertising landscape, much like any other media, has frequently emerging trends and opportunities. One significant trend is programmatic advertising, which allows for automated, real-time ad buying and placement, enhancing efficiency and targeting precision.”

Yasin Hamidani of Media Care Brand Solutions echoes this sentiment, noting that “the rise of programmatic buying is enabling advertisers to automate the buying process, making it more efficient and targeted. This trend allows for real-time bidding and better audience targeting, optimizing ad spend and effectiveness.”

Interactive and Shoppable Ads

Interactive and shoppable ads are gaining traction in the CTV space. Ambika Sharma mentions that “interactive and shoppable ads enable viewers to engage directly with ads and even make purchases without leaving their screens.” Delphin Varghese from AdCounty Media adds here, “Interactive and shoppable ads allow users to engage directly with the content and hence, are highly effective. They facilitate the movement of prospects through the purchase funnel seamlessly.”

Emerging Technologies and Techniques

Abhishek Tiwari, Global Business Head, NetSetGo Media, points out several emerging technologies and techniques. He says, “Increased usage of shoppable ads and QR codes can create direct response opportunities. Dynamic Ad Insertion technology supporting real-time ad decisioning is on the rise. Contextual targeting is taking center stage as a privacy-friendly path to behavioral targeting.”

Deepak Verma, COO, Images Bazaar, adds, “The increased use of targeted advertising on CTV platforms enables advertisers to target specific audience segments based on their demographics, interests, and behaviour, resulting in more personalized and relevant advertising experiences.”

Data-Driven Targeting and Personalization

Data-driven targeting and personalization are becoming increasingly important in CTV advertising. Vikas Chawla of Social Beat notes, “YouTube is a large player in CTV thanks to the scale and diversity of its content. This, combined with the OTTs and OEMs like Samsung, allows for integrated CTV media planning.”

Hamidani emphasizes the role of advanced analytics and audience segmentation, saying, “With advanced analytics and audience segmentation, advertisers can leverage viewer data to deliver personalized ads. This enhances the relevance of ads and improves the return on investment.”

Cross-Platform Integration

Cross-platform integration is a growing trend, allowing advertisers to create cohesive, multi-channel advertising strategies. Hamidani states, "Brands are increasingly integrating their CTV campaigns with other digital platforms to create cohesive, multi-channel advertising strategies that enhance reach and engagement."

Focus on User Privacy and AI

The focus on user privacy and the integration of artificial intelligence (AI) are transforming the CTV advertising landscape. Rekha Motwani, VP Media, #ARM Worldwide, explains, "In 2024, a major trend will be the heightened focus on user privacy. Advertisers increasingly use tools like Consent Management Platforms to ensure transparency and build trust while delivering personalized ads."

Motwani also highlights the role of AI, stating, “Artificial intelligence is transforming CTV by enabling precise real-time targeting and personalized content recommendations, which enhances viewer engagement and optimizes ad spending.”

Contextual Advertising

Contextual advertising is becoming more prevalent, especially as third-party cookies become less common. Motwani notes, “The rise of contextual advertising focuses on placing ads that align closely with the content viewers are consuming, boosting relevance and engagement.”

Advertising-Based Video on Demand (AVOD)

Speaking on the rise of AVOD, Varghese says, “Consumers are switching from SVOD (Subscription-based video on demand) to AVOD amidst the burgeoning cost of living. Ad-supported streaming services witness greater engagement rates and are sought-after by a majority of advertisers.”

Overall, the CTV advertising landscape is seeing significant advances in targeting capabilities, interactivity, data-driven optimization, and automation. These developments provide marketers with numerous opportunities to engage viewers in more meaningful and measurable ways.

(Tomorrow: Part 2 of this report will discuss at length: Measuring the ROI of CTV ad campaigns; Data & Analytics: The Key to Efficient CTV Advertising; Leveraging CTV Advertising for Stronger Brand Awareness and Recall; Digital Targeting and CTV’s Immersive Experience; Impact of Generative AI on CTV Advertising, and much more.)