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According to a report by comScore, India’s online video consumption has doubled to 3.71 billion videos per month in the last two years. Also, the online video audience grew by 69 per cent in March 2013.

The online video streaming ecosystem consists of content ranging from movie trailers, advertisements, daily soaps, international programming and regional cinema and programming. According to statistics by The Nielsen Wire Blog, 54 per cent of online audience tunes in to video content because they forgot to watch a particular serial when it was aired on television. 47 per cent were catching up on the entire series, 33 per cent on past programmes, 12 per cent tuned in at work and 12 per cent while travelling (the figures have been revised lately).

With the increase in consumption of video content arises the need to monetise it and thus, an opportunity to advertise.

Online video advertising ecosystem in India
Online video advertising in India is currently an economy with limited options. Two major forms of advertising in this domain are the compulsory 30-second ads or the skip-after-five-seconds ads, both of which seem to be accepted by the Indian audience.

Nonetheless, there have been pockets of innovation in the form of video ads in banners, independent digital video advertisements and specialised web content that promotes a particular brand.

“Online video advertising market has grown tremendously in the last few years,” said Shivam Srivastava, Director – Business Development-APAC, Vdopia. “The market has grown substantially. Demand is very high from advertiser point of view. The inventory is 80 per cent sold generally and 100 per cent sold in peak months.”

With online video streaming in India being used mostly for catching up with the missed shows and not for replacing television, most advertisers that are bullish on television are also high on online video advertising. FMCG, telecom, beauty and healthcare, mobile handset makers and technology are some of the sectors that are bullish on the segment.

The green pastures
Online video advertising has grown from its adoption mode to an established niche advertising mode. Marketers are now aware not only about how to use the medium, but also how to experiment on it.

“Online video advertising is now adoption the television advertisement format. Thus, when consumers are seeing a show they missed, they see certain portion of the show, which is followed by ads, then the show and then ads. Also, these advertisements are somewhat related to the nature of the show, making them relevant to viewers,” said Anuj Kumar, Co-Founder and Managing Director, Ripple.

Thus, if the user is seeing a piece of content related to computers, it might be followed by an advertisement of an anti-virus or some other software. The adaption of this form of advertising has made online video ads more engaging and less intrusive, thus increasing the scope of the medium.

The increasing variety on online video content such as live television, online channels and special web content has stimulated the growth of advertising. UTV Bindass created an array of special web shows of short duration, such as ‘Chickipedia’, ‘MENtals’, ‘Bad News breaker’, etc. While these shows are not monetised directly, they give the online channel an opportunity to increase traction and monetise the channel on the whole.

Srivastava added that live streaming of events is now a major trend and has given online video advertising a tremendous push.

The challenges
Online video advertising arrives from the need to monetise the online video streams. The major problem with the online video advertising industry is that it is undervalued in terms of its ad rates. Srivastava explains that 30-40 per cent hike in ad rates will give the industry its true value.

Also, the apt monetisation of streaming is not possible till the quality of content goes up. “There is not enough Indian content available,” Kumar pointed out, adding, “The content that is available is usually pirated, which is not appetising. Regional content available is the same that is available on TV.” Not only larger content, but also a larger platform is required.

Lack of measurement is another issue faced on this medium. While there are options such as video start and end, rewind, audio, forward, etc., there is no absolute measurement as to how many people saw an ad as all these elements can be accidental.

Technology is one of the major problems faced in online video advertising. Viewers who usually are online are not very patient to buffering and thus fast data plan and high band width is required, which is still not default in India.

Online video advertising is surely on the growth path, however, to grow from a niche to a mainstream advertising tool, a tremendous technological push and content innovation has to be on the cards. Nonetheless, it is still one of the best advertising options to reach out to precise TG with tailored communication or act simply as a recall medium.