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PMMAO 2011 INTERNET REVIEW : In the fast lane

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Kuber Chopra, Founder, Rasta

Increasing awareness among advertisers as well as an increase in the Internet penetration are driving growth of the online medium. In the past twelve months, internet media has zoomed northwards. According to Pitch Madison Media Advertising Outlook 2011, internet saw a whopping growth of 50 per cent in 2010 cornering advertising revenues of Rs 680 crore. This was much higher than the growth rate in 2009 which was 25 per cent.  The medium has also increased its share in the total ad pie to 2.9 per cent as against 2.4 per cent last year. Looking at these numbers, the year 2010 can easily be earmarked as the year where internet as the medium has come out of its age.

Online medium currently accounts for just three per cent of the total advertising spends but is the fastest growing media of all. Not only there is a surge in the online audience base, more and more marketers have become aware of its potential. Additionally, the traditional media space has become overly cluttered with spiraling price gradients. In that context, online offers low entry fee and a measurable ROI. As video advertising, innovative display and brand building techniques becoming the order of the day, marketing through internet has become a completely different ball game.

 

Net worthy

The next wave of digital marketing shows promising signs for the medium, as according to Pitch Madison Media Advertising Outlook 2011, internet saw a whopping growth of 50 per cent in the last one year as against 25 per cent in 2009. That is why there is growing interest from newer segments like telecom, FMCG, automobiles, education and media & entertainment apart from BFSI and IT/internet marketers. “The early adopters like travel, finance, internet companies like matrimony, jobs sites, e-commerce and IT, and telecom are also looking at significantly enhancing their budgets into the online pie,” says Kiran Mani, Head, Vertical Sales, Google India.

Yahoo! India, on its part is working closely with sectors, such as real estate, who are yet to harness the power of the medium.

New kids

Similarly, the consumer goods industry is looking enthusiastically at the medium to attract young customers. For instance, Godrej has utilised the virtual space in the form of a 3D interactive gaming site Gojiyo.com, which facilitates consumer engagement with Godrej’s portfolio of products in an innovative way. “Since its inception, Gojiyo has been visited by over 40 lakh visitors resulting in the acquisition of about four lakh registered users,” says, Ashutosh Tiwari, EVP – Strategic Marketing, Godrej.

Even sensitive categories such as condoms like KamaSutra, are using the medium for message building and communication. Ranju Kumar Mohan, Director – Sales & Marketing, JK Ansell, feels that e-commerce facilitates people to buy condoms with ease. Hence the company has built kamalounge.in to create an environment that enables the brand to connect directly with consumers and their interests.

Moreover, international branding, Indian companies going international and advertising opportunity on the internet will bring a new set of advertisers. “The medium allows maximum creativity, thereby leading to better ROI on campaigns,” says, Upen Rai, Director, Advertising & Sales, Indiatimes, which was instrumental in launching Airtel’s new logo online and also saw its ad revenue grow up by 40 per cent in 2010.

Nitin Mathur, Senior Director, Marketing, Yahoo India, too believes that the medium easily scores over traditional media, particularly print and television. “The digital medium offers various advantages like precision targeting, measurable ROI (Return on Investment), low entry fee and global reach. Online advertising is increasing rapidly and the deals are aimed at offering better solutions to large brands,” adds Mathur.

He also feels that the medium provides the advertisers a platform to tap their audience 24×7, which helps them reach their potential consumers even in remote urban pockets and by lower socio-economic groups.

 

Trendsetter

Interestingly, with increasing telecom penetration and growing broadband usage in the country, mobile is emerging as a key driver in the growth of the medium. Another important trendsetter for the medium is the advent of social media platforms that are constantly engaging with the consumer. “In fact India is the only country in the world where Facebook consumption is higher on mobile than on PC!” exclaims, Anuj Kumar, Executive Director (South Asia), Affle.

The young consumer is giving ample opportunity to advertisers and marketers alike to reposition and reconnect with this generation, as they are the ones who are the prime users of digital services.

Location-based advertising is another winner enticing not just biggies like Google, LinkedIn, Facebook but even small businesses and advertisers to experiment with the medium. Google Adwords is one such platform catering to SMEs, thus internet provides a level playing field to advertisers across the board. Marketers are hence looking at increasing their digital spends.

 

Creating Connect

Does innovation play a premium role in the overall scheme of internet advertising? While Sudesh Samaria, National Creative Director, Chairman and Co-Founder, Webchutney, feels that since Indian online advertising landscape is mainly dominated by display advertising and Search Engine Optimisation; Augmented Reality, 3D innovations in online video, e-commerce, app-vertising fail to impress the ‘hits and clicks’ oriented marketers in India who’s perception and understanding of digital remains limited.

However, Google’s Mani states that the consumers’ digital footprints are  expanding from search and research to social and entertainment. Hence, Google’s innovations on the YouTube platform (exclusive premium content offerings like IPL, Dabanng, catch up television) plus its enhanced search functionalities (instant search) is enabling a better experience across these pillars.

Marketing innovations, hence, require analytics to reach the right person, mediums to enhance the communication from information to engagement and tools to track a relevant consumer. Internet allows this to happen better than any medium on a very relevant and large audience base. Moreover, while video based display ads have also gained traction recently, rich media innovation will be the most common route adopted by existing and new online advertisers across various verticals in 2011. The line between display and search will blur making advertising more targeted and as Yahoo India feels, internet will significantly influence ‘word-of-mouth’ brand conversations. Along with online publishing, video advertising is set to rule the roost for most of the internet advertising. Live streaming too will elevate user experience further.

Samaria points out that depending on the context, audience and the product, ad innovations around the world have proved to click with masses and considerably increase brand value. Bar-code scanning, location-based advertising, iAds (specifically built to suit for iPhone/iPad platforms), promoted tweets and personalised videos are some noteworthy innovations. Examples here are P&G’s Old Spice, MakeMytrip, Microsoft and Airtel viral ads.

Some of the innovative campaigns done so far in this space include Webchutney’s Jaago Re campaign that transformed into a social change network. Consim created a programme on its matrimonial site Bharatmatrimony to allow its users create a virtual wife. Google helped clients like Kerala Tourism Board, Airtel, Nestle HSBC use its YouTube platform for some real time engagement. HUL became the official sponsor of Dabangg to be premiered online on YouTube. Dell India launched the Dell Streak phone on MSN India, in which, the users could interact with the ad to experience the phone. MSN India also handled campaigns of Toyota Etios, Tata Sky, Perfetti and Travelocity, among others. “We’re also introducing innovative formats for brands to reach out to a broader audience. For example, for the recent Nokia N8 launch, we partnered with them for a live web cast of their event,” shares Taraporewalla.

 

The social factor

In spite of the numerous possibilities being counted on internet, the major challenge anticipated with the rise in social media marketing is the lack of return on investment perceived on this medium. Marketers need to reorient their grasp of how this medium really works else this could turn out to be just another fad that disappeared as quickly as it appeared due to lack of proper execution.

For Prasad Ajgaonkar, MD, iRealities, social media advertising is a challenge of sorts. “Rather than calling it as social media advertising, I would like to call it social media branding activities. On social media sites, user has completely different psychological needs. Social media addresses the human need of social networking. The conventional display advertising may not be too much effective on Social Media. But using social media as a platform and enriching the users’ online social interaction through branded experiences can form a true social branding.”

 

Stretching the bandwidth

Internet advertising seems to be currently in charge of national advertisers as Neville Taraporewalla, Director – Advertising, Microsoft India, feels, “This is because online penetration was by and large a metro phenomenon until recently. As IP targeting /resolution gets better, advertising will become more local. Internet can lure local advertisers provided there is sufficient local content available which is consumed regularly. Also targeting ads in local markets poses a challenge because of the resolution of IP Pools in India.  So the accuracy of local targeting is questionable at a city level. Mobile advertising serves a better purpose for local advertisers.”

In addition, the mobile phone is the only two-way marketing medium that can be fully customised to the subscriber’s specific interest and precise location. Plus, a lot of the internet search traffic could be diverted to mobile internet with increased adoption of mobile internet among consumers.

 

Making an impact

M A Madhusudan, CEO, Virgin Mobile India, observes that marketers are exploring newer avenues and formulating innovative strategies to ensure widespread reach, focused messaging and a higher brand recall, which in turn has led to a rise in advertising on non-traditional media.  Virgin Mobile’s Indian Panga League campaign leveraged from the IPL frenzy in the country by creating an online game in line with its new STD value proposition.

Video and Rich Media have been the game-changing elements of Mobile advertising. “Thanks to the invasion of Smartphones, advertising is literally ‘coming to life’ on screens. Users are touching, emoting, engaging, interacting and spending more time exploring video and rich media ads that appear within Apps or within the Mobile Web,” shares Debadutta Upadhyaya, Vice President India, Vdopia.

Dialing a new number

Traditional advertisers like FMCG, consumer durables and automobiles, in the last two years have started allocating bigger budgets into mobile advertising as compared to online. So those who were slowest adapters of internet have become earliest adapters of mobile advertising investing in multi-crore campaigns “as they see it as a complete solutions tool with an immense outreach and Voice and Apps being the key drivers of growth,” believes Kumar.

Even Beerud Sheth, CEO, SMS Gupshup, shares that consumer brands such as Pond’s, Pepsi, Cadbury’s, ICICI Lombard, eBay are using mobile advertising in different ways. “While some of these brands used the medium as a call to action for ongoing promotions, others invested in longer term initiatives like mobile communities, loyalty programs and mobile apps. Mobile has effectively bridged the gap between the online store and the phone call, and made the process of discovery easier for the masses that do not access a computer,” adds Sheth.

 

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While there are opportunities there are challenges too. And primarily the challenge is low internet penetration and more so lower broadband penetration, hindering then growth. Will internet be able to sustain the growth, to find out, head to the Outlook  section.

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