State of the online advertising industry was discussed in detail at the Digital Download - Behind the Headlines summit, held by the International Advertising Association (IAA) in Mumbai on March 26. Industry experts spoke about ways to grow online advertising in India and the various challenges and opportunities before it today.
According to the IAMAI report 2009, there are 45 million Internet users in India and 57 percent of these users are in the 18-35 age group. However, online advertising in India is still at a nascent stage and has a long way to go before it can join mainstream advertising in the country.
The event commenced with keynote addresses by Ajit Balakrishnan, Chairman, Rediff.com, who spoke on the ‘State of the Online Advertising Industry in India’, and Hemant Sachdev, Joint Managing Director, Microsoft Corporation India, who spoke on the ‘Changing marketing dynamics in Digital Space’.
According to Balakrishnan, “Today, India has around 35-45 million users who log on to the Internet at least once, and looking at the population of India, this 35-45 million is not a huge number, and in relation to our national ambition is very small. According to IAMAI, online advertising revenue is a mere 3 percent of the total advertising budget. However, things are changing fast in the Indian digital space, with all major ad agencies having a digital arm. The Indian online scene could be viewed as a glass half full or half empty.”
He stressed on the driving force of the online space, namely broadband penetration in India, which is still a challenge. Balakrishnan called it an investment of faith. He further said, “3G mobile phone activity will take India ahead of the PC era.”
According to Hemant Sachdev of Microsoft Corporation India, “There is a huge growth and potential in this market. The whole industry is so apt for this dynamic category, though there are still a lot of gaps to fill. Contextually, today is possibly the best time to take this space seriously and this is a phase where a lot of accountability comes into play. Unfortunately, advertisers still seem to buy those mediums that they consume or understand, and not necessarily think about an emerging medium.”
The second session focussed on the new technologies and tools available to tap the minds of consumers and put the spotlight on privacy, data collection and storage, and security.
The panellists included Benjamin Edelman, Assistant Professor of Business Administration, Harvard Business School; Sanjeev Bikchandani, Founder and CEO, Info Edge India Ltd; Shyamal Ghosh, Chairman, Data Security Council of India, Nasscom; and Jayant Pendharkar, VP and Head Global Marketing, Tata Consultancy Services.
The session was moderated by Vijay Mukhi, Chairman, Cyber Security Committee, Maharashtra Government, and Chairman, IT Committee, Indian Merchants Chamber.
Benjamin Edelman spoke about two kinds of frauds – Click Fraud and Syndication Fraud. He said that there was nothing to complain about online ads when there were numerous methods of measurements available for online ads, but felt that the click method was better than pay for impressions. He also cited the example of syndication fraud, where Google at times got paid even when it was not adding value.
Vijay Mukhi noted, “A lot of e-security budgets moved to physical security, because e-security is still invisible and post 26/11, the online world has become more insecure.”
Shyamal Ghosh pointed out, “There is a provision that referred to sensitive personal information. New guidelines on privacy will soon be applicable across board as it is a sensitive matter and requires considerable amount of thought.”
Jayant Pendharkar opined, “People are not confident that information is secure. We are now seeing an invasion of malls, however, most people who come to the malls are window shoppers, therefore, culturally they are not ready for e-commerce. In the US, they are more conscious of privacy, in fact, the richer you are, the more private you become.”
Sanjeev Bikchandani too felt that the more senior one was, the more concerned he/she was about privacy. According to him, “Better targeted ads are useful for the surfer. Advertising, in our case, is content and more relevant to our audience. If you show useful and relevant advertising, the more effective and better it is.”