PMMAO 2010 Internet Review – Happily clicking away

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The virtual world has braved the real world downturn blows in the smartest way. While other mediums either crawled or took a step back, all through the year 2009, internet emerged as the fastest growing advertising medium for the second consecutive year with its evolving character luring more and more players and users to the domain.

Parminder Singh, Business Head, Google India, sums the mood aptly. “Creativity with efficiency kept the internet thriving in 2009,” he says.

That advertisers reiterated their confidence on the online medium is evident from the fact that internet advertising grew by 25 per cent. According to the Pitch-Madison Media Advertising Outlook 2010, internet clocked a total revenue of Rs 453 crore in the ad pie worth Rs 18,670 crore in 2009.   That is an increase of Rs 90 crore over the previous year. The share has grown by 0.7 percentage points in the ad pie.

According to Manish Vij, Co-founder, Quasar Media, the medium consolidated on its edge over other mediums in the year 2009. “Those who experimented on the medium earlier, invested consistently and with conviction,” he says.

As a result the major players strengthened their market position and the leaders got stronger as more money came to the medium. Sanjeev Bikhchandani, CEO, Naukri.com, says, “The slowdown separated the men from the boys. Those who created real value for the customers beat the others by a mile,” he elaborates.

More engagement

With new formats evolving for internet advertising, increasing number of advertises exuded confidence in the medium. Advertisers focused more on return-on-investment (RoI) and opted for the medium because of its better measurability. That also meant that many experimental advertisers adopted the web for more continuous and consistent campaigns. “Different companies utilised the medium cautiously and judiciously, and put more money into internet as the medium gave them an opportunity to map themselves in the market as well. The advertisers are picking up quality model of internet ads rather than the quantity model,” says Vij, adding, “They are differing from ‘cost per impression’ or ‘click through rate’ models. They are picking a ‘cost per engagement’ model which means advertising impressions are free and advertisers pay only when a user engages with their ad unit.”

The range of engagement varied as the user got to interact with an ad in a number of ways, including playing a game, participating in a poll, rolling over an ad unit for a specified amount of time or taking a product tour.
While almost all the advertisement categories saw an increased interest online, categories like FMCG, automobiles, telecom, education and financial services significantly increased their ad spend online and led the overall growth.

Gen-X spurs V factor
The growth online was led by Gen-X, which also happens to be the target audience for most marketers. According to comScore, youth in the age group of 15-24 are the heaviest users of internet.

While the increasing number of young users boosted the ad-prospect on the medium, the evolving character of online advertisement also brought a significant change in the internet ad patterns, for example, video advertisements.

“Use of video on internet has picked up this year. It has also integrated the utility of the internet. People have stated using online video heavily for their comprehensive knowledge. In a similar fashion, advertisers are picking up video advertisement as an important tool. Consequently ads in the form of banners carrying video contents are becoming more popular,” says Vij.

Recognising the edge internet has over mediums, in terms of reach, measurability and cost, new players like small and medium enterprises (SMEs) too have come on board. “Increasing number of SMEs took to the digital way of operating their business. The fashion to keep business alive for 24X7 on internet caught their attention,” says Singh, adding, “The measurability factor helps them get an opportunity to find their voice on the medium and get assessed.”

The mobile way

The telecom revolution in India has given yet another boost to the prospect of on-line advertising, especially in the rural areas where bringing adequate infrastructure for the broadband connections still looms large. The mobile internet looks to be an easier way to explore and engage the rural market.

According to a study released by IAMAI (Internet and Mobile Association of India) and IMRB (Indian Marketers Research Bureau), there are close to 12.7 crore mobile subscribers who have internet ready mobile devices. That is effectively 27 per cent of the total subscriber base of 47 crore.

“The immense growth in the telecom sector has boosted the growth prospects of mobile internet network in the country, especially in the rural market. 3G smartphones with large screens, such as the iPhone, BlackBerry and others will further allow mobile users a close-to-normal web-browsing experience,” says Singh.

But some industry players say that the mobile internet is yet to play any major role in the growth of internet advertising as the base of active users is still very low.

“The mobile internet will take another couple of years to benefit the ad industry as the low active user base does not encourage much advertising,” says Vij, indicating to the study finding which puts the active user base at around 20 lakh only.

The study states that, of the 12.7 crore subscribers who have internet ready mobile devices, less than 10 per cent accessed internet over their mobile at least once in the last one year, and that there are only about 20 lakh users accessing internet through their mobile phones on an active basis; which means they use internet on their mobile phones at least once a month.

Let’s play
Online gaming too is giving a major boost to the advertisers to engage with the youth online. The IAMAI-IMRB report suggests that the internet is the driving force for the gaming market in India. According to a recent market report, the gamers are said to constitute over 40 per cent of the total active internet users in India, which is a whopping 89 per cent increase since 2007. “Online gaming is evolving and advertisers are out to utilise the option as a good medium for brand promotion. The increasingly available free gaming content has also added more users and helped the advertisers to explore the platform in a more effective manner,” says Vij.

Besides, internet portals introduced products with cross-tie ups with mobile platforms to broaden their base and cash in on the fastest growing mobile subscriber market
in the world.

Rediff.com services such as latest news updates available on the mobile handsets and partnership between Vodafone and Shaadi.com for mobile matrimony on Vodafone enabled mobile phones are a few examples.

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