India is the second biggest market in APAC for Finecast, says CEO Nicola Lewis. For Finecast, it is not always about getting into big established markets but it is also about creating the marketplace, shared Lewis.
In an interesting conversation with exchange4media, Lewis spoke in depth about the company’s journey, their market in India, the Connected TV ecosystem and much more.
Below are edited excerpts.
It’s exactly been a year since Finecast was launched in India. How has it performed in the last year?
We are working with 70-plus brands in India across a variety of categories, including CPG, telcos, retail, pharmaceutical and auto. We have executed 100-plus campaigns in the same period, and have got really good feedback from the clients. Moreover, we are developing and building something in a very nascent space to have significant engagement from clients who are based in India. Most of them are just beginning their journey of total TV transformation.
But as of now, you have not integrated linear TV into Finecast. Is it only for Connected TV?
Yes, it is for Connected TV. We work with live linear TV in other markets like the UK and Australia. In India, it is going to take a while more as distribution and broadcasters are two different ecosystems here. Connected TV in India is still too small although I think when you look at the numbers of TV around 90% of households, in terms of penetration in India, have a smart TV. And when you look at the gross trajectory penetration of smart TVs in the country, that means today, nine out of 10 times you end up buying a smart TV. In terms of penetration, it has crossed 25 million as per our data.
Also, I think there is a growth trajectory for CTV daily audiences. When we look at CAGR numbers between 21 and 26, it’s about 46% growth. And we were discussing earlier that in Q4 of 2022, shipments of smart TVs within India were up 45%. So, it’s definitely at a sort of tipping point within India.
You work with a lot of other markets. So globally, which markets are doing well, and what factors have worked for them?
We are now live in 14 markets, and we’re going to be launching four other markets this year. We have a healthy APAC footprint, of which India is our second biggest market. When we start to think about creating Finecast, we have to look at two factors: market readiness from a macroeconomic perspective. The conversation we were just having was about where the market is now, and importantly, where the growth is potential in terms of supply. But there are other ingredients too. Do we have the right data partners? What’s measurement like in the market? Also, what’s the appetite of the client? So, for us, it’s kind of looking at those when we think about what makes Finecast a success. It’s not always going into those big established markets. It’s also defining markets and creating the marketplace itself.
We are in EMEA – in Germany, Spain, Italy and Poland – which, again, is a really good, healthy footprint, and of course, including the UK into that. And then we’re in eight markets in the APAC region.
If you had to pick up one market and tell me how it has done very well in that one market, which one would that be?
I’d say the UK has done incredibly well and is our most established market. So, we look at live linear within the UK environment. Live linear includes news or live events. Also, we’ve done incredibly well in the UK because of measurement. So, we’ve been able to work thoroughly from a measurement perspective, from sort of brand uplift through to sales uplift, and then through to measurement frameworks across total TV. It was our first market to launch in 2017. So, clients are very much along the journey of total TV transformation and looking at how they can have incrementality against their total TV plan I’d say the UK but I think that’s also symptomatic of it being the most mature market.
How is the CTV ecosystem looking from an advertising perspective because it’s been there in developed markets for quite some time? It’s still relatively new in India. How is it shaping up?
If you look at the journey of CTV, for a lot of clients, it is about that complementary nature to their original linear TV plan, where you reach a point of diminishing returns when you’re planning TV and then you want to make sure that you can get that incremental reach. I think the satisfaction level comes down to understanding how you’re using television. So, it’s not just about the top-of-funnel brand awareness, it’s also down into the lower funnel, into sort of the more performance, outcome-based metrics. And with a lot of clients, you can work with individual specific KPIs that might be around incremental reach or segmentation or geo-based targeting. And so because of CTV and because it’s in such a growth pattern at the moment, we find a lot of clients satisfied with it, because ultimately, in many markets, linear TV audiences are in decline. TV is still very healthy, but the ecosystem is changing. They still want to be on TV. It still drives a lot of ROI and brands see the good response and good performance from TV. So as much as we can do as an industry to keep propelling that and making television relevant, I think brands are there, and brands are responding to it.
In India, the strategy for CTV has to be a little different. It’s more of a mobile-first kind of market. And 400 million people here use mobile, so what is your plan for India?
It is about looking first and foremost at working with clients. We look at the evolution of TV planning for our clients. TV, we’ve normally sort of planned TV, to broad reach on sort of set audience segments. And again, as the industry and as the shape of the industry changes, we need to evolve through that.
So, it can almost be sort of video-neutral planning. Looking at the combination of linear and addressable TV to enhance a TV plan – that’s got to be one of the first big strategies because it’s always got to be client first. And then it is also about understanding where those pockets of growth are for us from a supply perspective, and how we continue to work with partners as they transform their strategies in terms of CTV consumption. We also have data partnerships that we’re looking to enhance, which will also enable us to leverage segmentation within the CTV industry.
One more point probably we can bring is the growth in the broadband subscriber base. Just to give a comparison between last March 2022 to this year, there are 5 million additional broadband subscribers who have come right now. I agree to an extent that India is still a mobile-first country or market, but largely what is happening is also there’s a lot of adoption of broadband penetration. Now with the advent of 5G, there will be people who will be streaming or taking hotspots and still streaming content. So, end of the day for us, if the OTT viewership is rising, that’s eventually going to move into their experience sitting on a large screen as well and will catapult the growth of CTV also in a way.
In India particularly, CTV shows advertisers high-value consumers with disposable incomes and high purchase intent. So, will the entry of the FTA dilute that pool?
No, because that’s not what we’ve seen around other markets. And again, it has to come back to the viewer. It has to come back to the consumer and how they’re consuming content. And if you look at the way consumers are consuming content, it’s on their terms on the platform that they want – typically the big screen in their household. So, no, I don’t think that it does dilute the value of that at all. If anything, it increases it because we will continue to see the shifts through into CTV addressable TV environments.
What challenges do you face when you’re dealing with clients?
The challenges start with understanding the ecosystem. We’ve always worked in every market on panel-based TV buys, where you’ll plan to your certain metric and you will deliver to that certain metric, and you’re able to measure that through a post-campaign report. And I think what CTV and Addressable TV do is it’s opening up a whole new ecosystem that clients need to take time to understand.
As I said, their Total TV plan now works in an addressable world, particularly where we don’t have an exact measurement. So, we’re looking at panel-based and fusing that with more digital metrics. It’s not an exact science, but I think clients need to be there whilst we work through making it an exact science because the consumers are there. So that’s one of the biggest things. Our role is thought leadership. Our role is about helping clients understand the ecosystem and where they need to be on their total TV transformation.
How do you explain what exactly Finecast does?
We essentially take the precision of data and apply that to the big screen in households. We allow household segmentation and targeting and a higher degree of addressability within the household. So, the kind of one to few, it’s not one-to-one, not that kind of one-to-one personalization, but being more targeted within your TV advertising, is essentially what we do. We also pull together the ecosystem of suppliers and broadcast partners to ensure that we can manage the reach and frequency. A holistic approach to reach and frequency, again, ensures that there’s efficiency and effectiveness across the total TV plan. And then we also work a lot with clients in the space of innovations. So, whether that be, again, creative message optimization, or understanding certain new opportunities to leverage reach across new providers. Essentially, we’re kind of that single-point access to the television ecosystem.
Despite the benefits, the accuracy in measuring the ROI on these ads is still a challenge. Considering CTV is a shared viewing platform how can one overcome that?
At the moment, we are targeting a PIN code at a household level. And so, we do have that degree of accuracy. I think it comes back to my previous point. We can prove the ROI of TV and we know that addressable television works. I think the industry as a whole, both in India and on a global level, is realizing that measurement is not perfect right now. To be able to say how we combine panel data and fuse that with other sources of data – that’s where the challenge sits. For us at Finecast, it’s about finding those pockets of growth and pockets of opportunity that enable a client to leverage the addressable TV ecosystem without having that necessary sort of perfect measurement.
In terms of measurement, it’s not a one-to-one right now to exactly do a clickable solution and see whether the person has responded or not. It’ll always be at a household level. And in the aspect of that, what you have done is that today when we do the Total TV planning approach, we are using uniform reach curves and seeing how you can tap the linear reach curve, linear TV reach curve and add additional addressable TV reach curve and see how you can layer the duplication over there. So, end of the day, when you go hyper-local, you’re able to reduce the spillage and create a more hyper-local level of concentric targeting, which probably a linear is not able to give. Anyways, reducing spillage is one of the ROI metrics which you’re able to try. I think the other areas; we’re always looking at innovations that help to prove the ROI, such as ACR. So Automated Content Recognition is a technology that enables us to understand what content consumers are viewing within the addressable TV ecosystem.
We can then take that and overlay that into the household targeting sort of segmentation and the PIN Code approach that we have to then qualify the consumer and how they’re behaving at a household level. And then again, from an ROI perspective, creativity, and bringing commerce into addressable TV is a huge opportunity. Whether that is Shop for Ads, QR codes, and advancements like virtual product placement, they’re all triggers that enable us to really sort of hone in on that sort of ROI delivery as well.
What is your five-year growth plan?
Over the last 12 months, we’ve built a global innovation team because I feel this is such a rich space and we have an opportunity to get it. But each of our clients, they’re at a very different position in their total TV transformation. We’ve got an opportunity to help them innovate while they’re doing that transformation piece. One of the big areas we’re focused on at the moment is creative message optimization. If I look at a global level last year, we would have served 11 billion impressions, and under 1% had any form of creative message optimization. The creative had been pre-optimized based on the household, based on the targeting, and based on the platform. That’s a huge opportunity because if you bring that hand in hand with household targeting, and creative message optimization, particularly again in countries like India, where content is so rich and so great, that’s an amazing opportunity. That’s probably one of our big focus points. And then, we will be expanding to four new markets this year, taking our total number to 18 markets.
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