IndustrySpeak: Has Internet come of age in India? It’s a 100-mn question – Part 1
In September 2009, the Internet population in the Asia-Pacific region reached 484 million visitors age 15+ that accessed the Internet from a home or work location, an increase of 22 per cent from the previous year. China, which has the largest Internet population in the world, saw a 31 per cent increase in its Internet population, while India saw an increase of 17 per cent of its Internet population (35.8 million) from last year (September 2008). This is as per the latest comScore report on the growth of Internet audiences in the Asia-Pacific region based on data from its comScore World Metrix service.
As Internet completes 10 years in India, the country currently ranks third in the Asia-Pacific region and has the fourth largest Internet population in the world. The 2009 edition on PricewaterhouseCoopers report for ‘Indian entertainment and media outlook 2009’ highlighted that Internet advertising is projected to grow by 32 per cent over the next five years and reach an estimated Rs 2,000 crore in 2013 from the present Rs 500 crore in 2008. The share of the online advertising too is projected to grow from 2.3 per cent in 2008 to 5.5 per cent in 2013 of the overall advertising pie.
The auto sector has emerged as one of the biggest online advertisers in India, having increased its digital spends to nearly 10 per cent. General Motors, for instance, not only launched its campaign first in digital media, but also made huge spends on digital media. This apart, even FMCG brands are now beginning to explore this medium. Coca-Cola India, Pepsi, ITC Group, and Colgate Palmolive are some examples.
exchange4media.com spoke to some industry players to find whether Internet in India come of age in these 10 years and the road ahead.
From marketers’ perspective
V Ramachandran, Director (sales and marketing), LG Electronics India, said, “The Internet is part of our marketing plans for most of our categories, particularly for our high-end products. The SEC A, A plus audience or youth as an audience Internet becomes a good medium for targeting them. For us, Internet is a very critical medium and its importance is growing and we are investing significantly to having a sound presence in the Internet. We find this medium cost effective. However, we would like to have more dynamic content being available on the net. The challenges in Internet are mainly related to infrastructure development.”
He further said, “Internet advertising will continue to grow dramatically. We are finding, Internet advertising doubling year on year and we are seeing a huge traction, however mobile will be the vehicle that will drive faster with Internet penetration. But the challenge will remain for brands to adapt to this form of advertising. Mobile has much larger reach, but what I feel is that this will speed up Internet adoption.”
The turning point
Prashant Mehta, COO, Komli Media, observed, “Internet in India has not grown as fast as we wanted it to grow. Secondly, the Internet represents the most educated part of the population, it also represents some of the wealthiest of the population, but when you think from a marketers’ perspective, the Internet is starting to become more important element of their thought process than it was a year ago. What will be interesting for us to follow over the couple of years is how the social media platform develops in India and that has really caught on fire in this market. I believe in the long term mobile will present a unique opportunity for both consumers and marketers, but only in the long term and not the short term.”
Amardeep Singh, Co-founder and VP, Interactive Avenues, explained, “When you compare the reach of individual properties like Moneycontrol versus its print equivalent or even some of its TV equivalents or even with horizontal portals like Yahoo and quite a few publications and TV channels, one would think that the Internet has come of age in India. However, when you look at the reach of the Internet as a percentage of the total urban population, Internet penetration is less than 20 per cent of the urban population.”
Singh further explained, “Compare this to 77 per cent in the UK and 60 per cent in the US. This is the reason why Internet ad spends have crossed TV ad spends in the UK, and in the US it has a dominant share. Advertisers in India will be forced to look at the Internet more seriously once the Internet user base crosses the 100-million mark, which is when I would say that Internet has finally come of age.”
According to Faisal Farooqui, CEO, MouthShut.com, “No one knows the real numbers, comscore numbers gives indication. I believe the real growth of the Internet is more than the comscore number, comscore panel/ sample for India still requires a little more transparency. The growth of Internet users in India is far more than comscore number, greater than 17 per cent, in my estimate there are 70-80 million Internet users in India, including cyber cafes. Internet has come of age, but only in class A and B, in the rural areas and small towns, the Internet is still arriving, which will take another few years.”
Neville Taraporewalla, Director, Advertiser and Publisher Solutions Group, Microsoft India (Consumer and Online), highlighted, “India has got one of the youngest population in the world, a vibrant middle class and as these youngsters born post-1980 are beginning to find their way into the mainstream, their lifestyles and media consumption patterns are fast changing. This generation wants to share what they are doing and they want to know what others are doing and that’s why we see the success of social media sites. I believe Internet in India will continue to grow.”
“With cyber café users, this number goes to 50 million, and thus India comes in at number three or four. In class B and C towns, there is a huge aspiration among the people to know what is happening around the world. One of the problems in the Internet market in India is that we lack good content site as compared to Europe or the Far East or even the US. I believe significant investment need to go into building good interactive content,” Taraporewalla pointed out.
Siddhartha Roy, COO, Hungama Digital Media, opined, “Internet consumption in India has definitely come of age. However, this cannot be measured merely by the number of users, but by the way the Internet is being consumed in the country. The Indian hemisphere is contributing to the global consumption of Internet in a big way. Today, India ranks between number 2 and number 5 in terms of traffic on all leading websites, including YouTube, Yahoo, Daily Motion, et al. It is also important to measure the consumption of Internet across devices.”
He further said, “Recent consumer studies have pointed out that Indian consumers spend a lot of time accessing the Internet from their mobile devices. They are spending close to 45 minutes of their daily active Internet usage is dedicated to entertainment and related content. Social networking through mobile Internet is also on the rise. This year alone, approximately 10 million urban Indians used their mobile phones for engaging in social networking. Being an Internet driven organisation, we believe that increasing Internet consumption has established a number of opportunities for creating various products and services that offer convenience for the digitally savvy consumer in India.”
Tomorrow: What Internet has to offer
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