When geo-targeting on TV in India started around 2008, one could see that TV was the only medium which has a massive reach but sadly not targeted. It is an expensive medium, digital’s traditional reach-based older sibling, so to speak, and more importantly, a privilege available only to the industry big boys. A transformation was required.
The total number of advertisers on TV stands close to 11,000, whereas advertising interest on print is approximately 150,000. This is despite the huge gap between the penetration of TV vs print. To put things in perspective, while the number of TV viewers is around 800 million, print receives a readership of only about 150 million. That pegs televised reach at five times that of print media, however the number of advertisers on TV is far less than print or radio. A major detractor that prohibits TV for small and medium advertisers, is cost. Secondly, India is a diverse heterogeneous buying market with varied regional preferences, and TV was unable to singularly address this diversity. There was no option for brands to target a specific market using TV.
The statements above corroborate the gap between TV as an advertising medium and small & medium business owners as advertisers. Companies like Amagi pioneered the concept of targeted advertising on TV by making TV ads much more effective and affordable.
Benefits to Broadcasters
Broadcasters can monetise their inventory in a specific market by reaching out to first time TV advertisers (long tail of advertisers) in that specific market which otherwise was not possible. Geo-targeting has opened the doors to those long tail of advertisers who were otherwise never on TV. For a TV channel, traditionally the problem has been that unlike newspapers, who can print more pages to increase their revenue, they only have 24 hours and can have 10-12 minutes of advertising in one hour. So how can they grow?
- By increasing their ad spot cost. But the viewership on TV and amount of time spent on TV is already under threat from Digital and OTT and there are multiple platforms and more channels to choose from. So the pressure is to keep the price competitive.
- By launching a big show with large marketing and production budgets. This may increase losses but will increase viewership and will hopefully create a halo effect on viewers to watch other shows aired on the channel.
- By increasing distribution. But today everybody is saturated in distribution so there is not much they can do.
Hence, there are very few avenues for a TV channel to increase their revenue and geo-targeting provides one of those unique avenues to them.
Secondly, broadcasters are also able to provide better advertising option to Big brands who were already heavily advertising on TV, as they now have access to better media efficiencies. Geo-targeting also opens endless possibilities for big brands to effectively use it for a specific business need; such as priority market targeting, product testing, regional launches, local consumer promotions, ad versioning, (different brand ads for different markets) etc to boost sales in markets of their choice.
Benefits to advertisers
Tons of advertisers who have used geo-targeting in the last decade, have seen growth in terms of sales in the specific markets that they have advertised. This is because, traditional TV is a crude tool. Certain channels do well in certain markets and not so well in others. Companies were unable to match their share of market requirements with their spending, also called as their share of voice. So geo-targeting provides them with a tool that allows them to do targeting so they can decide which market they want to target and how much they want to spend based on their desired market share. Secondly, some companies have brand variants specific to certain markets. So geo-targeting not only allows them to target the right amount of advertisements to the right market but also helps target the right product to the right market. Thirdly, they can use our technology for consumer promotions. Earlier, this was not possible on TV as TV advertising could not be isolated to certain markets.
TV incidentally from a cost per reach perspective is the cheapest media because of volume but also the most expensive because of the volume. The reach was far more than required. By eliminating the spillage and wastage, geo-targeting makes it truly cost effective
Future of Targeting on TV
Future of targeting on TV is indeed interesting with more advanced targeting options coming to the fore front. As television viewing changes from being linear to more on OTT and hand-held devices – options like device based targeting, demographic targeting and contextual targeting will soon become a reality in India.
To know more, log onto www.amagimix.com