Starting January 2019, YouTube, the video-sharing platform owned by Alphabet (earlier Google), is once again doubling the rate of its high-impact fixed homepage advertisement — from Rs 70 lakh a day at present to Rs 1.4 crore, according to a letter YouTube sent to various media agencies.
Even as media experts debate on the return on investment (ROI) on digital spends, several media agencies ET spoke to said that the trend of digital platforms like Facebook, Twitter, and Instagram, raising rates between 20-30% annually will continue in 2019, too, as time spent by users and engagement levels increase.
The media agencies have been projecting a higher – over 30% — growth rate for digital media for the last three years. Ad spends on the digital medium touched Rs 11,000 crore last year, and is expected to reach Rs 14,500 crore by end of 2018.
“In 2017, the overall digital advertising stood at approximately Rs 11,000 crore of which Google was approximately Rs 6,500 crore, Facebook Rs 2,500 crore and Rs 2,000 crore by others. Google and Facebook expect to close 2018 with approximately Rs 8,000 crore and Rs 3,500 crore, respectively, with other players contributing around Rs 3,000 crore,” said Amardeep Singh, CEO at Interactive Avenues, the digital agency owned by IPG Mediabrands.
As per industry estimates, a basic digital media campaign reaching 1 billion impressions — total number of views — costs around Rs 3 crore currently.
Agency leaders say digital is now becoming an important part of the media mix and given the rate of digital penetration and adoption, the players are bound to jack up prices.
“Today, you have between 400-500 million people on internet because Jio has dropped the data prices significantly. With increase in consumption and reach, the rates will also increase commensurately,” said Ashish Bhasin, CEO (South Asia) at Dentsu Aegis Network.
Except Snapchat, which has seen a drop in monthly active users (MAUs) in India this year, all other platforms have seen a significant jump.
As per the industry consensus, YouTube reaches out to 250 million MAUs, Facebook has 220 million, Instagram touches around 68 million, while Twitter’s MAUs have gone up to 30.4 million.
And while YouTube’s repeated ad hikes are being debated in the agencies, Singh feels that given the reach of the platform, the advertisers see value. “YouTube is now reaching 120 million users a day with over 1 billion impressions. Few media vehicles can deliver such reach in a day,” he said.
Executives at Alphabet told ET that YouTube is seeing some of the fastest growth in India and other Asian countries. “When Google bought You-Tube for a mere $1.65 billion it seemed crazy at that time, but today it feels like a steal. We have seen it grow from 7 hours of video content being uploaded every minute to now 450 hours+ of content being uploaded every minute. Today, everyone at the Silicon Valley knows that Reliance Jio has shaken up the Indian market and still there is untapped opportunity up for grabs,” said two executives who are not authorised to speak to media.
A Google India spokesperson said that advertisers are finding value in the platform. “At YouTube, the daily active users are growing at 100% since last year,” the spokesperson said.
Even platforms like Facebook and Twitter have been hiking rates despite problems such as fake accounts and bots, as per sources. Twitter said there has been 32% decrease in cost per engagement for Twitter over last year but for the company total yield per impression has improved.
A Twitter spokesperson said improvement is driven by mix shift towards higher yield ad formats as well as higher click-through rates (CTRs).
Vivek Bhargava, chief executive officer at DAN Performance Group said that these platforms have de-cluttered the news feed and timelines and users have reached a critical mass so it made sense for them to push up rates. “If you take FB, the news feed ads now costs over 100% compared over last year,” he said.
A Facebook spokesperson, however, denied any price inflation for advertisers on the platform given the numbers, while maintaining that that the social network’s pricing is “transparent” to every ad buyer. “Our ad demand continues to go up because we are getting more and more advertisers on board as we expand the business. At the same time inventory is also going up as we see more and more users on the platform,” the spokesperson said.
Original Link to this story :https://tech.economictimes.indiatimes.com/news/internet/digital-ad-rates-shoot-up-as-indians-get-hooked-on-internet/66599334