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Growing Advertising Revenue on digital TV platforms and devices

Abuja, May 6, 2015

A perspective from MIPAN

Presenting on behalf of…

Kunal Jamuar

Chairman – Technical Committee (MIPAN)

Past experience:

3+ years of Media Researchsetting up PeopleMeter panels in Indiapart of the team that created theworld’s largest readership survey – IRS

15+ years of Media Planning, Buying andImplementation

Growing Advertising Revenue on digital TV platforms and devices

Abuja, May 6, 2015

Lets put things in perspective…

177

26 24 17 17 17 14 12 10 7 6 4 3 2 2

 Nigeria

 Gh

ana

C' D

ivoíre

 Niger

 Bu

rkina F

 Mali

 Sen

egal

 Gu

inea

 Ben

in

 Togo

 S Leon

e

 Liberia

 Mau

ritania

 Gam

bia

 Gu

i-B

Popln Mn

52% of the West African Population resides in Nigeria

Source : Wikipedia, World Economic Output, WARC, mediaReach OMD Estimates

510

44 28 7 12 11 15 6 8 4 4 2 4 1 1

 Nigeria

 Gh

ana

C' D

ivoíre

 Niger

 Bu

rkina F

 Mali

 Sen

egal

 Gu

inea

 Ben

in

 Togo

 S Leon

e

 Liberia

 Mau

ritania

 Gam

bia

 Gu

i-B

GDP USD Bn

Nigeria’s GDP (nominal) is 3/4th that of all West African Countries put together

Source : MMS, mediaReach OMD estimates

Nigeria forms 2/3rd of the West African Media Investments estimated at USD 953m

663

155

37 10 16 14 20 8 11 6 5 3 5 1 1

 Nigeria

 Gh

ana

C' D

ivoíre

 Niger

 Bu

rkina F

 Mali

 Sen

egal

 Gu

inea

 Ben

in

 Togo

 S Leon

e

 Liberia

 Mau

ritania

 Gam

bia

 Gu

i-B

Ad Spends USD m

Source : MMS, IPSOS, mediaReach OMD estimates

However, media investments stagnating at N100b ±10%

55.8

90.997.5

102.8

91.8

103.893.1

63

7 5

-11

13

-10

2008 2009 2010 2011 2012 2013 2014

Advertising Investments vs YOY Growth

MI in Nb % Growth

Source : MMS, All mass media except Digital

Does this mean that the market growth is saturated for media investments?

Investments as a % of GDP indicates scope for growth

0.8

1.08

0.9

0.75

0.35

0.13

0.31

World Average USA Japan China India Nigeria Ghana

Advertising Investments as a % of GDP

Source : WARC, MMS, wikipedia

With more than 200 stations already in the fray, does this scope hold for Television still in Nigeria?

Growth in TV media investments stagnant! (driven largely by terrestrial)

39.7

46.149.4

47.0

34.6

2010 2011 2012 2013 2014

Nb

Source : MMS

The Marketing Imperative

Why measure?The MIPAN perspective

When the USA sneezes, the World catches a cold!

In such a scenario, traditional marketing is not what it used to be!

Modern marketing is about

& it is about

Data is KING!

Evolution of Media ROI

Cost per spot

Cost per Rating Point

Cost per ‘000

Cost per unit awareness/ CPC

Cost per unit sales/ objective

Buy the cheapest inventory!S : Low outlayW : Peanuts & Monkeys

Buy the efficient inventory!S : Good ROIW : Does this translate into objectives?

Buy the efficient medium & inventory!S : Good ROIW : Does this translate into objectives?

Inventory efficiency gives way to ROIS : Better ROIW : Does this translate into objectives?

The Holy Grail

So what will trigger the growth in Advertising investments?

1 2 3

Robust and accurate Viewership Measurement

Relevant content Accurate monitoring

So what will trigger the growth in Advertising revenue?

Robust and accurate Viewership Measurement

Relevant content

Accurate monitoring

Challenges for the current viewership measurement system in Nigeria• Diary based panel

• Memory based – leads to over and under reporting

• Is not designed to capture the nuances of viewership on a minute-by-minute interval

• Does not provide for a sustainable ecosystem for specialised/ niche products

The long tail viewership phenomena

As options increase, the viewership for higher rated shows gets fragmented!

Current Scenario

Digitized Scenario

The Holy Grail

• PeopleMeter system

• Using a robust technology• Frequency Meters

• Watermarking

• Audio Matching

• Picture Matching

So what will trigger the growth in Advertising revenue?

Robust and accurate Viewership Measurement

Relevant content

Accurate monitoring

Accepting foreign culture/content is a slow burn process!

Need for good quality content (including adoption of foreign formats)

What will drive digitization among consumers?

• Aspirational local and international content

• Value costing

• Omnipresent distribution

The adoption curve is getting steeper!

So what will trigger the growth in Advertising revenue?

Robust and accurate Viewership Measurement

Relevant content

Accurate monitoring

Current monitoring challenges

• Infrastructure challenges lead to incomplete monitoring which in turnleads to lower revenues despite inventory being carried

• Apart from monitoring, what is required is advertising investmentsdata being provided to the industry – in the interest of the largergood for the industry

• Currently monitoring data costs are prohibitive for Mediaindependents to procure independently

Likely drivers of Advertising revenue growth with digitization

Pecking order for Advertising revenues of Satellite stations

Sports & General Entertainment dominates most advertising

revenue on the digital stations

Other niche genres like News, Lifestyle, Kids, Music and other Genres come into play

Testing of different content. Search for

relevance

A1

B1

A2

B2

Start of Digital Signals

Current Scenario

Post digitization

scenario

To summarise

• The growth of the media ecosystem lies in better measurement

• It lies in providing better content in a more cost effective manner

• It lies in delivering better ROI to the marketer and the consumer

We will see more change inmedia in the next 5 yearsthan we saw in the last 25years!

Thank You!