Geo-targeting of ads on TV is a significant way of unlocking the hidden potential of available ad inventory. While
still in its infancy in India, it has the potential to help broadcasters tap into a much wider pool of advertisers and expand
the ad pie.
In our heterogeneous country, the ‘one size fits all’ philosophy no longer seems viable. With the language, culture, lifestyle, architecture and customs changing every few kilometres, not only content creators but even advertisers face the humungous task of customising their communication to target specific consumers. Could geo-targeting be the end of all woes?
Allow us to explain. With TV being the most mass medium, every advertiser fights for some airtime. But with every region having its own unique purchase behaviour and market adoption of various products, there is an urgent need to allow advertisers to segment their communication in regions of their choice. The question then remains, how does one bring regionally targeted advertising to a medium as mass as television?
Over the years, companies like Amagi, Vubites (acquired by Rediff) and AdSharp (of Star India) have been trying to tap into a much wider pool of advertisers and expand the ad pie through geo-targeting on various TV channels. An innovative method of enhancing the value of available ad inventory, it allows advertisers to air different ads on the same channel in different regions to maximise impact and reduce costs.
“Initially, we thought the biggest need would be from smaller businesses, which have a regional distribution process. But interestingly, even larger businesses are looking at India with regional cuts rather than as a single market,” highlights Baskar Subramanian, co-founder, Amagi Media Labs.
As a result, several national brands, especially large FMCGs, are using geo-targeting for communication and it has started becoming a part of the media planning cycle. The journey, however, has just begun — there are issues to be ironed out and apprehensions to be addressed.
Broadcasters, for instance, have remained sceptical of geo-targeting and are sitting on the fence, thinking that it may cannibalise into or reduce spends from some of their national advertisers, resulting in them limiting this targeted approach to a handful of channels on their network. On the other hand, instead of local advertisers, national advertisers are engaging in this opportunistic localised ad solution for specific campaigns — limiting the contribution of geo-targeted advertising on TV.
Incidentally, for broadcasters, like Sony Pictures Networks India (SPN), geo-targeting is not on their radar as their channels are anyway running on full inventory.
“It mostly works in favour of advertisers as they can pick and choose the channels they want for their communication, but we have been able to increase our ad rates regularly, and hence don’t see a need for it,” states Rohit Gupta, president — network sales and international business, Sony Pictures Networks. “Even if one sells slots at a premium, it will only impact around 5-7% of the revenues.”
With stakeholders still testing waters, what will it take for geo-targeted advertising on TV to be the next big thing?
Targeting ‘em wisely
TV has so far lacked targeted advertising options, but brands are reinvigorating this with sharper focus and with BARC providing a rural-urban split in terms of measurement, media planners are reworking their strategies and spends.
According to Gerald Roche, senior vice president, DDB MudraMax — Media, geo-targeting is a welcome addition to the ad tech repertoire for marketers. “Incremental is a misnomer; it allows for sharper reach in a market for advertisers seeking a wider audience without a large spill over,” he explains. It goes without saying that a prerequisite when using geo-targeted ads is to back them with additional attention to distribution and retail presence/promotions, else it can all go in vain.
For bigger brands, cost optimisation is a secondary factor. It helps them deliver the right message to the right audience. Maruti Suzuki, for instance, uses it to test the market or just push sales in a particular market. “Although we don’t quantify such initiatives in terms of revenues or sales as we have other push drivers, we have witnessed a decent increase in sales at some level or beyond,” states Sanjeev Handa, VP, marketing, Maruti Suzuki India.
But that doesn’t mean broadcasters have no advantage. With the help of players like Amagi, networks like Zee and Viacom18 are today able to split the feeds on the channels and insert targeted ads, commanding better premiums.
Ashish Sehgal, COO, Zee Unimedia, says, “The idea is to increase the client base. Also, with regional channels not having as much reach as national channels, targeting specific markets is helpful as it gives high reach and upside in terms of ad revenues.” Using this approach, advertisers pick and choose inventory in specific markets on Zee TV, Zee Cinema and Zee News, paying different amounts for different markets, resulting in a win-win where the sum of parts is 20-30% higher than the whole.
Despite this, geo-targeting doesn’t cut a big slice on a network’s revenues pie presently. “But we are looking at it more from the point of Amagi evangelising it and providing a sales service,” says MK Anand, CEO, Times Network.
Consider how Maruti used geo-targeting last year for the launch of Celerio. The campaign, Celerio — Dil thi Gujarat maate was run in four key cities — Ahmedabad, Rajkot, Surat and Vadodara. For Gujarat, being a key market, this campaign was designed at the onset of Navratri.
A similar campaign was started for the East coinciding with Durga Puja. Local channels were targeted, majorly from the Zee network. The campaign supported by strong purchase sentiments due to the ongoing festive season, doubled the enquiries and retail sales increased by about 35%. TV offers the lowest cost per reach but is also the most expensive medium because there is a huge amount of wasted spill over and reach, so geo-targeting offers a big opportunity with regards to higher effectiveness.
Shalini Raghavan, CMO, consumer products division, L’Oréal India says the brand uses geo-targeting primarily to boost deliveries in markets which are under-indexed versus national averages where there aren’t very strong local channels like UP, Punjab and Haryana, which are getting incremental reach by being on a top channel versus supplementing through regional channels. “However, for most of our categories we have a higher affinity with DTH consumers and that technology only allows national advertising. So if this changes, it will make a big difference to how we use geo-targeting,” she says, adding that geo-targeted advertising could easily go up by 10-15% over the next three years.
Idea is another brand that has used geo-targeted advertising, through split beam technology on television for an ATL campaign on the launch of its 3G network in Delhi last year.
“With all channels covered in the national plan, taking the geo approach to increase GRPs in a market is multiplying frequency rather than increasing reach in that market,” explains an Idea Cellular spokesperson. “However, for regular campaigns to drive brand growth or product sales, frequency more than the optimal number is a waste. South/ East markets can already be insulated so this approach is limited to HSM.”
Hurdles on the road to adoption
Contributing around 2% to the total TV ad pie presently according to industry experts, geo-targeting is growing, albeit at a snail’s pace. The challenges are in terms of limited inventory with broadcasters and also, when they split the beam, all markets have to be sold together to fetch the premium. While geo-targeting makes sense for a localised approach, it is not contributing significantly in terms of ad revenues for broadcasters.
However, some industry experts believe that geo-targeting involves more of a market readiness problem than anything else. Explains Ashish Bhasin, chairman and CEO, Dentsu Aegis Network South Asia, “Geo-targeting is relatively nascent in India. It is on an experimental basis and till the time there is no proper system for tracking, it won’t grow.” This is a reasonably successful model in the US, but in India, communication runs from big to small cities and there are complexities of language as well.
At the moment, it seems like everybody is experimenting but it can work in India if it’s done quantitatively. Brands are treating it as a test because if one wants them to put in serious monies, these brands would want measurement and concrete data.
Addressing this, Amagi Media Labs recently partnered with BARC India wherein TV networks offering geo-targeted split of their national channels, including national and regional feeds, will be monitored on a separate basis and will be listed across BARC’s interfaces. This can help Amagi’s advertisers evaluate their geo-targeted ads. Even the broadcasters are struggling to bring out the effectiveness of this model in the best way. “We have done a research on the viewership benefit in each city but the formal sales have not really kicked in. We are getting some business, but it’s not substantial,” states Anand. Star India has also been trying this approach with AdSharp but its inventory is already under heavy demand, making things a bit difficult.
Keeping aside the current challenges — fewer channels and even lesser inventory available for geo-
targeting — the fact remains that this model could be a game changer, going forward.