Industry POV

Double Standards: How will ‘display free’ platforms impact digital? - Rajiv Dingra

8/5/2015

Internet.org stated at launch that it will not be supported by display ads and that the service would primarily target mobile users. How will the ‘no ads’ clause affect advertisers on digital and mobile?

Rajiv Dingra (RD), founder and CEO, WATConsult: If you look at it, currently, Internet.org looks at the bottom of the pyramid because it’s a free service to access free websites. A lot of people in the last three weeks have raised questions on it being against net neutrality as well because it creates a free service. At this moment in the shorter term (up to a year) a lot of advertisers will not be affected because the platform has to become a large movement in itself for advertisers to feel like they are missing out on something. Let’s say that internet access via mobile multiplies multi-fold in India to 50 million users, then possibly there could be a case made for advertisers having reach issues.

Amaresh Godbole (AG), managing director, DigitasLBi: First of all, for a theoretical assessment, we’ll need to put aside the issue of net neutrality as the outcome of that debate and TRAI policies can completely change the context. For the below analysis I have left aside these considerations. In theory, the salient feature of internet.org is that it will suddenly give immense reach to digital content and services (albeit limited sites). Which means, that mass brands which viewed digital as a ‘good to have’ item in their budget will start diverting investments. Even if the conventional ad units don’t exist, there is always a scope for advertiser funded content/search/services/branding units within the native content of the sites which make up Internet.org.

Are we likely to see a slowdown in growth of overall digital spends as a result? Or will spends go up? What will be the short term and long term effect?
RD: Internet.org is a very small segment of the audience and overall internet (paid) is growing none the less. The growth charts before zero internet was between 30 per cent and 35 per cent. I don’t think that will slow down. The paid space is growing and I personally feel for the next five years you’ll see spends grow at a double digit number and a significantly higher digit (high 20s or early 30s).

AG: Existing users of the internet are not going to downgrade to Internet.org voluntarily, hence they will continue to be targeted with the same gusto. Mass brands will divert some of their budgets from other media to leverage the reach of Internet.org. The lack of conventional ad units will create a need for innovations and partnerships with the sites on internet.org and since they have no competition they will be able to command premium rates. In the long term, as the Internet.org audience matures and becomes hungrier for internet content, they will join the wider world of internet, thus increasing the user base. In summary, the spends on digital advertising are likely to increase in the short term and long as a result of Internet.org

Will the no-display clause force advertisers to innovate?
RD: If it becomes a fairly significant platform then advertisers may have to innovate. But, for that to happen there are a couple of years left.

AG: Mass advertisers will effectively have to embrace the principles of content marketing rather than broadcast advertising. Collaborations, content innovations, sponsoring valuable content and services will become the norm. Think of it as Red Bull’s marketing approach extended to a wider audience. You are likely to see many more cases like Kan Khajura Tesan emerging.

Will we see more brands building apps to be present on ad-free platforms? If yes, what will the nature of such apps be?
RD: Brands at the moment will have specific apps and I don’t think Internet.org will include these apps also, because the idea behind it is social. Airtel Zero might since it is a for -profit platform. It’s too premature to think that brands will participate in offerings like this. If Airtel Zero takes off after the TRAI consultation paper is announced, brands will participate. Then there is a chance for branded applications to have free access .

AG: Even with the free internet, brands have not had much success with apps unless they offer genuine value to the consumer. For example, Nike app for measurement and social gamification of performance. The phone is an Indian’s one true personal device, and the space and processing power is valuable. The only reason one would install an app is because it gives them rich content they desire or need, utility, transaction or loyalty benefits. Even if you gratify a consumer to install an app which doesn’t add value to them, they will not use it or will uninstall it eventually.

Will media planning for digital have to be re-thought for such ‘ad-free’ platforms?
RD: Again, I don’t think it will change in the short term (next two years). Given the huge concern for net neutrality that has happened through the TRAI and save the internet campaigns, my view is that the internet is going to be largely free of such platforms until and unless Airtel pulls it weight. If silos get created then media planning would look at it as a channel to reach the bottom of the pyramid in India, because the way I look at it is, anybody would prefer paying and getting full access rather than a service where you can access select websites. Overall it will make people think about these services in terms of, ‘who are the users who use this and does my brand require to target them’. It will still be an afterthought in media planning and not the primary way to do it.

AG: Yes, it will be more about creating partnerships and collaborations with content and utility providers than buying media. The attempt will be to put on the table ideas that work for the brand as well as the publisher and their audience. The publishers will have the veto power at least till the time there’s no competition, and hence you might see a closer collaboration of media and creative in the planning stages as the ability to ‘buy’ space will depend on the idea. Think of it as high impact planning like buying sponsorships or advertiser funded programs with a channel rather than interruptive planning such as spots during the game.

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