In the last five years, there has been a shift in video and audio content consumption from traditional sources of radio, iPods, cable and payTV to on-demand/streaming platforms such as Netflix, Spotify, Roku, iFlix, BoomPlay, FireTV, iTunes and recently ShowMax.
Although the growth has been very benign, this year, Internet streaming services will outperform conventional platforms. However, there is no doubt that this growth has been fueled by the rise in the adoption of smartphone and mobile devices.
The numbers are worthy of reviewing- according to data compiled by Deloitte, smartphone sales crossed 2 billion units in 2014, global sales of smartphones are expected to reach 4.6 billion by the end of this year. To put things into perspective, Cisco, the world’s largest networking equipment maker estimated that mobile data traffic will rise by nearly tenfold from 1.7 exabytes* (EB) to 18 EB this year. Deloitte estimated that global audio and video traffic combined has already reached about 82% of all internet traffic.
In Nigeria, Jumia estimated that smartphone usage has reached over 21 million as at 2018 and many streaming services are already gaining sizeable market share in the market with Netflix and iFlix already doing local marketing activities as well as content acquisition.
As streaming platforms gain more traction, marketers will follow the trend to spend more money targeting audiences. There is data to back this up. Digital advertising spend has grown from 28% of total adspend in 2015 and it is expected to reach 36% by 2020.
As you plan to latch on these opportunities, there are effective and efficient ways of matching your brands with the audience, however, there are stark differences that you will need to understand. Many streaming services are audience-funded (paid subscription), they often, therefore, shut-out traditional advertising that prevents the audience from getting value for money. Audiences also tend to be more fragmented but distinctive, they are more heterogeneous across all demographic and geographic characteristics but very delicate to stereotype.
The answer lies in understanding the channel and working with the right team to navigate this gold mine.
*1 exabyte = 1 000 000 000 gigabytes
First published in NEXTGEN, a weekly newsletter of SBI Media Limited.