After a mixed bag of business in 2009, Communicate2, a leading search engine marketing company in India, is eyeing nearly 200 per cent growth in 2010. This apart, Communicate2 also aims to focus extensively on social media and SEM. Vivek Bhargava, CEO and Founder, Communicate2, shares the company’s growth plans with exchange4media.
Said Bhargava, “The results for year 2009 were mixed. As we are the dominant digital agency in the financial sector, the first couple of quarters were tough, many of our financial partners shifted spends from products such as personal loans and credit cards into products such as fixed deposits and home loans. However, this was more than made up by the entire insurance sector. In a nutshell, although we did grow reasonably well, we were not able to keep pace with the growth rate over the past years.”
“The year 2010 looks very exciting. If I were to take a conservative estimate, I still believe that we shall grow anything between 100 per cent and 200 per cent during the year. This confidence comes from fact that most of our current partners are set to exponentially increase their spends, and we are now being approached by companies who have large ATL advertising budgets, but have had a limited digital presence,” he added.
Some key initiatives
According to Bhargava, while the focus was on lead generation and getting the same to at the lowest cost per lead in 2008, in the year 2009 one of the key initiatives taken was to move their partners away from the CPL model and getting them to focus on cost of acquiring the customer. “A lead at the cost of Rs 2,000 is not expensive if the lead converts into business, while a lead at Rs 20 is expensive if it does not lead anywhere. The only way to change this mindset was to allow our partners to measure the cost of acquisition. Becoming the first certified analytics company in India helped us in getting our partners use analytics for measuring the entire customer acquisition lifecycle,” he said.
Bhargava further said, “One of our new partners was able to double their conversion ratios as well as increase their average ticket size for fixed deposit to 2.5 times their earlier average. Thus, arithmetically speaking, they could now afford to generate a lead even at a cost of 400 per cent more than still increase their ROI by substantially. This method of digital planning allows one to increase their acquisition volumes substantially, else many marketers reach saturation point of digital spends very quickly.”
The other key initiatives taken by Communicate2 for its partners were in the space of owning media rather than renting media. “Although we are used to the term ‘buy media’, however, if we have to buy it every time, it actually signifies that we are only renting media. Building digital platforms allows companies to really buy media as that digital platform shall be owned by the advertiser. Content creative is the spinal cord of such initiatives, search allows Communicate2 to guide the digital asset strategy of our partners. As search tells us which content is gaining popularity, which content gets traffic from conversion keywords, formats of content that will get traction (videos). I believe that over the next few years, marketers will spend significant portions of their media budgets to either create content or provide a platform where they will be able to get their target audiences to create content. Communicate2 plans to build our expertise on strategy and execution of building such platforms,” Bhargava explained.
He further said, “The focus for the year 2010 would be on using contextual advertising for branding solutions. YouTube, Orkut, Facebook can become really effective solutions for branding and engaging with consumers. For instance, only a consumer with broadband access would use YouTube. Thus, one can reach and engage niche target audiences by video ads as a pre-roll on YouTube. This apart, the focus is also on how social media and SEM can be used by companies to gain a competitive advantage. We are taking digital workshops for companies on how they can use different digital platforms to differentiate themselves and get digital into the DNA of the entire organisation.”
Mobile is already the key focus area for Communicate2, which cannot be ignored, especially because of the enormous number of mobile users in India, and once 3G is rolled out in India, it will give a big boost to the mobile industry in India. “We believe the best way to leverage mobile as a medium would be to create content that can be consumed through mobile devices as well as create mobile applications that can engage with the TG rather than only using mobile as an advertising medium,” he added.
The Aegis Media-Communicate2 deal
On the state of the Aegis Media-Communicate2 deal, wherein there were talks of Aegis Media acquiring Communicate2, Bharagava highlighted, “Communicate2 believes that the Indian digital market is going to explode over the next few years. Our management took a call about six months’ back to finance our growth through a fresh round of funding from a consortium of investors rather than aligning ourselves to Aegis Media at that stage. Although we do not have an equity relationship with Aegis Media, we continue to work with them and other media groups through a loose partnership, which may culminate into an equity relationship. We don’t have a time frame set for this.”
So, what are the possible trends for search engine marketing in India? According to Bhargava, “I see search being increasingly used for branding campaigns. One of our partners created 100 profiles of a TG that they wanted to target for a branding campaign. We built and ran a successful branding campaign targeting these specific users at a CPM of less than Rs 8. Examples of these profiles were – Blackberry users, golf players, club members, stockbrokers, doctors, etc. I see similar campaigns being run through search by companies.”
He further said, “Most companies are going to invest heavily in building digital platforms, the only way to seed to increasing traction of these platform is by using search (as search allows to target specific set of users). So, I see search being used for community creation and engagement. Lastly, I see B2B companies increasing their spends on search.”
Some of Communicate2’s clients include ICICI Bank, HDFC Bank, The Times of India, UTV, Bindass, Parle, Godrej and MTV.