By Manish Sinha, Vice President & Business Head, Media & Entertainment, TO THE NEW

How has the rise of digital media impacted advertising in the industry?

Digital media has impacted advertising in a big way. With digital, advertising has become more targeted, more measurable, and two-way communication. In India, digital media advertising is expected to overtake television advertising in 2023, with a current market share for them being 40% and 35%, respectively.

How does advertising impact media and entertainment industries in terms of revenue generation and sustainability?

The Media and Entertainment industry primarily has two sources of revenue - advertising from brands and consumer spend that includes subscriptions, rentals, tickets etc. These two account for more than 95% of industry revenue. Out of these two, advertising has a much bigger pie and has always been the mainstay of revenue generation and sustainability for the media and entertainment industry.
As consumers continue to cut cords on traditional TV models and suffer from subscription fatigue in the new digital world, advertising-based AVOD (Advertising Video-on-demand) and FAST (Free Ad Supported TV) are expected to have the fastest growth.

How does advertising influence consumer behavior and purchasing decisions in the industry?

The advertising serves three purposes - creating awareness or discovery, describing purpose or utility, and influencing in favor of the brand or product. It is the only mechanism available for establishing a connection or acquaintance between consumers and brands.

How can advertisers measure the success of their campaigns in the industry?

The beauty of advertising on digital media is its ‘measurability’. The advertisers can plan their campaigns around very targeted, number-oriented, and outcome-driven advertising. For example, if a brand is looking to create more brand awareness, it can go for campaigns that maximize impressions for its target group and pay digital media publishers based on actual and not estimated impressions. Another brand looking for more conversions can define a campaign that maximizes conversions, irrespective of the number of impressions. The advertiser can always calculate the ROI or success based on the outcome, impression counts or the number of conversions, achieved for every dollar spent on advertising.

With the rise of ad-blockers and cord-cutting, how are media and entertainment companies adapting their advertising strategies?

When we talk of cord-cutting, we are talking about consumers shifting from traditional TV to digital consumption. With the burgeoning digital consumer base, advertisers are significantly increasing their spend on digital media. They want to be there where the consumers are. The winning theme for large players is all about providing the best of both worlds. These companies are also focusing on innovation to find out ways of maximizing value for advertisers with levers such as brand integration, gamification, native advertising and e-commerce integration.

Media and entertainment companies and advertisers focus on making ads less intrusive for their consumers. There is more and more experimentation with brand integrations, native advertising, and ways and means to strike the right balance between experience and monetization.

How does social media advertising compare to traditional advertising in terms of effectiveness and reach?

Social media advertising is way more effective than traditional advertising in multiple ways. Social media advertising is very targeted as these platforms have multiple data points about the consumer and can make the ads really contextual for TGs and minimize wastage that is showing ads to consumers who are not part of TG. Another aspect is acceptability. When the consumer is on a social media platform, he or she is there for consuming or creating content and hence is more receptive to ads. This is not always the case with traditional advertising.

The most important difference to me though is the two-way communication that enables measurability. With social media advertising, the platforms and hence the brands can discover how consumers interact with their advertisements and whether they are getting the intended results. With the current level of technology at hand, there’s so much that can be done to track, study and analyze consumer behavior and leverage that for maximizing returns on every dollar spent on advertising.

In what ways can media and entertainment companies tailor their advertising to different demographics?

Digital media enables highly tailored or contextual marketing that can target different demographics in a very meaningful way. An important point to note here is that demographics in the digital media world would be two or three levels deeper than in traditional advertising. I call it the ‘digital demographics’. It has multiple dimensions and additional data points to fine-tune demographics even further, and both the inventories and ad campaigns shall be planned around them; location, gender, age, device, interests, journeys, persona, etc.

The media companies shall have their ad inventories segmented for these digital demographics to ensure that they get adequate fill rates while the advertiser gets maximum value on their spend. Similarly, the agencies and advertisers shall map their TGs with these digital demographics for better results.

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