PMMAO 2011 INTERNET OUTLOOK : High bandwidth

Although online advertising forms a small chunk of the overall ad pie - only three per cent of the total ad spends - the mood in the digital advertising industry seems buoyant. The year 2011, as marketers predict, looks promising to the industry with growing internet audience base and increasing mob

by Neeta Nair
Published - February 01, 2011
6 minutes To Read
PMMAO 2011 INTERNET OUTLOOK : High bandwidth

Although online advertising forms a small chunk of the overall ad pie - only three per cent of the total ad spends - the mood in the digital advertising industry seems buoyant. The year 2011, as marketers predict, looks promising to the industry with growing internet audience base and increasing mobile usage. The Pitch Madison Media Advertising Outlook 2011, expects the internet share to be Rs 917 crore. The growth rate of the medium in the next twelve months is expected to be a little slower than 2010 i.e. 35 per cent. Yet the medium is expected to increase its share in the ad pie to 3.3 per cent from the current 2.9 per cent, eating into the share of press and outdoor. Kiran Mani, Head, Vertical Sales, Google India, explains, “In terms of net revenue, the Indian online advertising is still small compared to the overall advertising industry. But with over eight crore internet users and about three crore mobile internet users, the online advertising industry is poised to see a robust growth.” William Kanrick, Worldwide CMO, Sapient, believes that marketers today are excited about the ability to use new digital media via the internet, digital screens and mobile phones, to reach their respective target audiences without being intrusive.  This is why even brands that earlier preferred to stick to traditional media are today excited enough to experiment with online and mobile media. Neville Taraporewalla, Director – Microsoft Advertising, Microsoft India, feels that since digital advertising is a two-way communication, it facilitates and keeps the users engaged and that’s why more and more advertisers are being lured by this medium in the recent past. “It is an all embracing approach where marketers, audiences and various media owners co-exist. We believe that consumer participation and involvement so as to move beyond a one-way interaction is the key to success”, he adds. Talking about the growth of this medium in 2011, it is expected to be fuelled both by newer advertisers coming on board and increase in investments from existing ones. Earlier the domain was dominated by BFSI, IT sector, travel and auto, now it will see the entry of education, government, real estate, FMCG and many more categories that were not present on the medium earlier. Google feels that international branding and advertising opportunity on the internet will bring a new set of advertisers. It has created online campaigns, videos and contests for Nestle, HSBC and HUL. For many marketers, IPL and Bollywood promotions online have been a watershed moment and now most of the advertisers find it easier to connect with the consumer on this platform. Case in point – Virgin Mobile’s Indian Panga League, an interactive online gaming contest. Also, FMCG which has a low presence on the internet so far, is looking at the medium and is expected to move up its online ad spends substantially over the next 12 months. Prasad Ajgaonkar, MD, iRealities (a digital agency), admits, “We are seeing big shift in budget allocation from the FMCG sector. Some of the top brands like those from HUL are really looking at the medium seriously. And they are being positive in their approaches.” Additionally, Social Media Marketing has given boost to the industry as platforms such as Facebook, Orkut, Twitter and YouTube, among many others provide a highly engaging platform. “And the ability to engage these audiences through innovative ad-formats has made internet advertising an extremely attractive proposition for advertisers,” Taraporewalla  from Microsoft India, adds. Sapient’s Kanrick points out that social media acts as a conversation monitoring system providing real time input, and therefore more actionable. The other important trend boosting the online medium has been the increasing usage of internet on mobile handsets. Interactive voice and SMS apps are becoming the order of the day. Sidharth Rao, Co-Founder and CEO, Webchutney explains, “A lot of the internet search traffic could be diverted to mobile internet with increased adoption of mobile internet among consumers. While text based mobile ads have taken off very well on this platform so far, but  application-based value added services will help create mobile inventory services and enable greater mobile advertising spending in 2011. Marketers who are slow to move will stand to lose out on the opportunity to grab a larger consumer base and bigger market share.” Text based ads and rich display ads rule the Indian online advertising landscape and will continue to contribute significantly to overall online ad-revenue. Video advertising and live streaming will definitely enhance the scope further. Debadutta Upadhyaya, VP (India), Vdopia, informs that location-based mobile advertising is another winner. “A number of apps like Foursquare, Gowalla, Google Places offered small business owners and big brands a chance to entice users based on their physical location” she adds.  Apart from these, the  role of the ‘I’ factor i.e. innovation will also be very crucial in shaping up of the online industry over the next few months. Despite the enthusiasm, functional problems remain a big challenge for this medium. Measuring effectiveness of the medium is one such challenge. While Webchutney has moved from impression based CPM (Cost Per Mille) model to more rational, performance based CPC (Cost Per Click) and CPL (Cost Per Lead) models, Rao still feels, “We must, however, be careful with measuring effectiveness of this medium through clicks and views only, as it often leads to going over the top with ‘over-measuring’. Such metrics are meant to provide ‘quantitative’ guidance and cannot become a long term approach to brand building.” Google’s Mani echoes the same that a click is probably the worst way to evaluate a campaign. “It attributes no value to ad exposure. It also means that if you haven’t clicked you aren’t interested. Less than 0.4 per cent of the people click on an ad on an average but it doesn’t mean the others are irrelevant to the campaign.” Overall, online advertising is here to stay in India as Kanrick feels, “Today, consumers behave very differently, and digital and social media are fast becoming the focal point for consumers’ media attention.” Thus, iIn a world where people are spending more time online than on TV, where the 3 screens (PC, mobile, TV) rotate and interoperate, digital thinking will surely be among the top priorities for a marketer to ensure the brands presence is felt in the consumer’s mind and life.