Ever expanding penetration and improving understanding of the medium by agencies and marketers has been driving the growth of the internet medium in the past 12 months. According to Pitch Madison Media Advertising Outlook 2012, internet saw a whopping growth of 45 per cent in 2011 scoring advertising revenues of Rs 985 crore as against Rs 680 crore in 2010.Â This does not include search advertising. Search advertising grew by 57 per cent and reached a figure of Rs 550 crore in 2011, while in 2010 it was Rs 350 crore. The total size of internet advertising including search component is Rs 1,535 crore.
The mediumâ€™s share in the total ad pie (excluding search advertising component) has also gone up to 3.8 per cent in 2011, this was 2.9 per cent in the year 2010. If we add the search advertising component too, the mediumâ€™s share in the total ad pie will be even higher. Looking at these numbers, the year 2011 can easily be earmarked as the year where internet as the medium came of age.
Marketersâ€™ new love
Though internet, currently accounts for 3.8 per cent of the total advertising spends but is the fastest growing media of all. Online advertising is finally picking up pace, thanks to growth of internet users in India, which has now crossed 100 million users. At over 100 million internet users and growing, advertisers have started to take the medium much more seriously. Newer segments like telecom, FMCG, automobiles, education and media & entertainment apart from BFSI and IT marketers have increased their spends on the medium. Shefali Chhachhi, Director Marketing, Max Bupa says, â€œBiggest online ad spenders in 2011 were the travel, BFSI, auto and telecom sectors. FMCG sector, a large advertiser on traditional media platforms, is only now increasing spending on online advertising.â€
A lot of automobile companies have increased their spends on the digital medium. Take for instance Volkswagen Passenger Cars, which has doubled its spends on the digital medium in 2011 and currently the medium accounts for about 8 per cent of the companyâ€™s total media mix. The company plans to increase this further in 2012.
Praveen Sharma, Head of Media Sales, Google India feels, â€œThere is better understanding of the medium by agencies and marketers and theyâ€™re increasingly investing time to understand how they can create more value from the digital medium in their marketing mix. Currently, digital advertising spends in India are pegged around ` 1,500 crore and we expect that to grow significantly in the next few years to reach a billion dollars.â€ Sharma also believes that internet is well positioned to bring a new set of advertisers on board and India will be internet & mobile first advertising market.
â€œMore than ever, marketers are looking for ROIâ€, says Nitin Mathur, Senior Director Marketing, Yahoo! India. â€œInternet is the most cost-effective and measurable mediumÂ¸ and consumers are spending more time on it. More ad dollars will migrate online and market will consolidate as advertisers spend money in fewer places. Online video ad spending across the globe is projected to quadruple in 2011 to $1.9 billion,â€ he adds.
Whatâ€™s on display?
In display advertising, the rise of the video on the web has brought in newer set of ad-vertisers on board. â€œWeâ€™re seeing increasing amount of traction and willingness to do more amongst traditional advertising heavy weights from the FMCG companies,â€ shares Sharma from Google India.
Highly engaging rich multimedia ads and various new video ad formats ruled the roost in the display advertising space in 2011. Multimedia ad formats are getting greater acceptance on the web as it involves the users to engage with the ads and help the advertiser in building brand.
Yahoo! Indiaâ€™s Mathur agrees, â€œOnline video viewing is becoming increasingly popular, with increasing demand for high-quality engaging videos across Movies, TV shows, News, Sports amongst others. As markets get organised, we are seeing lot of demand for premium video content, and content producers are coming forward to put their content online. This will drive the revenues of the medium further.â€
What are you searching for?
As long as search is concerned, users search habits are evolving very quickly.Â Newer set of customers are logging online to do their research before they decide on a product. Overall, online searches are growing by leaps and bound across the verticals. Sample this: According to Google India, there was over 40 per cent growth in overall searches from desktop and over 90 per cent growth in searches coming from mobile phones.
Also, there is a very interesting trend emerging on the online medium: â€˜Research Online Purchase Offlineâ€™ (ROPO).
Sectors that increased their online spends especially in search were e-commerce (a lot of deals sites), auto, tech, telecom and education. Also, higher adoption from the small and medium business segments has driven the growth of search.
National or Local
As of now, internet advertising is largely driven by national advertisers but the participa-tion from small and medium business segments has been increasing fast. As Googleâ€™s Sharma says, â€œIn absolute dollar terms, we continue to see high spends from the top national advertisers but having said that the local small medium business market is opening up and a significant part of growth has been fuelled by our success with the small and medium business segments and we are confident of maintaining this strong growth over the next few years.â€
According to Google India, small and medium business segment companies have benefitted because internet offers them focused targeting of their audiences, and as a result they have been able to increase their revenues by 30-40 per cent by being online.
Google India has launched a number of initiatives in India to help small and medium businesses gain from the internet medium and increase their participation on the me-dium. One such initiative is building websites free of cost, which would otherwise cost them about Rs 25,000. â€œWe plan to get at least 5,00,000 Indian businesses online with a website that is quick, easy and free to set up in the next three yearsâ€, says Sharma.
The social quotient
We have already seen emergence of social on the web. As per IMRB report, the number of internet users in India stood at 112 million as of September 2011. Off this, about 71 per cent of users in urban cities were social media users. No wonder, marketers are flocking over to social media sites like Twitter and Facebook. Take for instance the Volkswagen Jettaâ€™s Twitter campaign launched in mid 2011. Lutz Kothe, Head Marketing and PR, Volkswagen Passenger Cars, Volkswagen India shares, â€œWe ran the worldâ€™s largest Twitter campaign during the launch phase of the new Jetta. Following this, we launched Planet Volkswagen â€“ an interactive portal that opens up the world of Volkswagen not only for customers but also to anyone who loves cars and especially children. Planet Volkswagen has been established to connect, educate and create interest in the brand with this large audience â€“ an audience without the barrier of time and distance.â€
Max Bupaâ€™s Chhachhi feels that emerging gaming platforms and innovative technological devices such as tablets will further pave the way for growth of social media.
However, Mathur seesÂ social media as an enabler and not always as a destination. â€œIt should be part of everything we do,â€ he says, adding, â€œSocial is not merely a set of relationships between people, itâ€™s a means by which people get things done â€“ sharing conversation, consuming content, asking questions. Our social strategy is about one-to-few as opposed to one-to-many. We believe that creating meaningful social relationships around interest is far more powerful than large social groups with no character.â€
Experts feel that while social networking platforms allow marketers to leverage the free elements of their platform – what matters is the scale which can be obtained through a paid model. So while advertisers are including various elements of social mediaÂ in their brand building initiative, itâ€™s still a very small segment of the total advertising market.
Googleâ€™s Sharma says, â€œI donâ€™t think that the free element of social media will eat into the advertising. Itâ€™s like comparing the PR industry to the traditional advertising industry. Both have their different space and scope in the industry. Similarly, social media will continue to be adopted by companies to drive various agendas and objectives.â€
Time to strike the deal!
The deals website or â€˜online Coupon category as it is called in India, has been another key trend on the online medium and has seen huge growth in the past twelve months.
According to a report by comScore Media Metrix report, in India, 4.6 million internet users, aged 15 and older accessed the Coupons category from a home or work computer in June 2011, reaching 10.4 per cent of the entire online population. Snapdeal.com, which has tripled its audience in the past year, led the category with 1.5 million visitors during the month, followed by Dealsandyou.com with 9,90,000 visitors and MyDala.com with 9,52,000 visitors.
Kedar Gavane, comScore Director for India, says, â€œThe convenience of the online channel coupled with enticing deals has attracted a growing number of visitors to the Coupon category and to daily deal sites, in particular. Consumer adoption of these types of deal sites could be an important step in the overall growth of e-commerce in India.â€
The demographic analysis of the audience for Coupon and daily deal sites revealed that males made up a significantly larger percentage of category audience at 61.8 per cent compared to 38.2 percent females, although this is largely in line with Indiaâ€™s total internet population. Persons between the ages of 25-34 accounted for the largest percentage of the Coupon category audience at 43 percent and were five per cent more likely to access a Coupon site compared to an average internet user.
Aneesh Khanna, Senior Vice President, Head – Marketing and Product Manage-ment, IDBI Federal Life Insurance, rightly points out, â€œOnline advertisement along with social networking give consumers 24/7 access to targeted brands, offers and discounts. Hence online medium today is utilised not only to communicate but to reach out to target audiences to solicit and undertake business transactions, making it a far more effective and measurable medium.â€
The digital platform today offers a variety of options to advertisers to achieve their ob-jectives. In terms of innovation from creative execution standpoint, there is no limit to what is possible on the web – 2011 saw a lot of innovative campaigns that were designed and executed only for the online medium. Google India introduced some new ad formats on the medium in 2011 viz. Remarketing, True View Ads, Click to call ads and Media ads (check box for details on these.
Undoubtedly the world wide web is the new cool place to be for the consumers and for the marketers but there are challenges too. The biggest challenge according to experts is that marketers today realise the power of the digital medium and want to do a lot of things but most of them are not clear on how to utilise the medium to maximise the benefit for the brand. Also, they donâ€™t know what to do with it in the long run. A case in point was Aircelâ€™s fantastic campaign: Save the Tigers got thousands of â€˜Likesâ€™, but what do you do with the property? How can you keep the audience engaged? And what do you do with these â€˜Likesâ€™?
Sharma answers, â€œInternet continues to be the fastest growing medium in the country and weâ€™re investing in skill building initiatives for partners and agencies to create an eco-system to support and execute campaigns online for both large and small businesses.â€
So the big question remains the same: will internet be able to sustain the growth and expand its share in the total ad pie? To find out, head to the OutlookÂ section.