CEO | 09 Sep 2006
While it is true that search advertising helps in getting a new consumer, it would be wrong to say that an old consumer will not search for better solutions. When it comes to buying financial products or travel solutions, consumers want the best deal and they will compare and search for the best bargain. Thus, search attracts both kinds of consumers.
With over 15 years’ experience in sales, marketing and entrepreneurial experience, Rajiv Parikh leads the worldwide team at Position2. He is the Co-Founder and Board Member of Aperon Biosystems and Met-roFi, both growing VC-backed companies. He founded and grew the AltaVista Business Solutions Group to $40 million in revenues. He also led marketing and business development groups at 4Info, Sun Microsystems, NCR, and AT&T.
Parikh has an MBA from Harvard Business School and a BS in Electrical Engineering from the University of New Hampshire.
In conversation with exchange4media’s Saurabh Niranjan Turakhia, Parikh discusses in detail about search engine marketing, the advantages, challenges and how globally it has benefited several corporates.
Q. Tell us something about Position2.
Position2 is a search engine marketing agency serving clients across the globe. It was started around the end of 2005. The concept came out of my own experience as VP (Marketing) in some organisations. What caught my attention was the pressing need to use budgets more effectively. I observed that most of the SEM operators focused on Fortune 500 customers. Mid-sized companies have a hard time managing the campaigns themselves. But they too need to grow, and grow efficiently. It’s not that they do not have the budgets, but that they like to spend more effectively. And you find companies like these in India and across the globe.
We started the company along with co-founder was Soumya Ravi, a search engine marketing consultant. She has a strong understanding of marketing and advertising as well as statistics and mathematics. As part of building the business, we first acquired US based company Creative Consultants Group, who come with deep domain knowledge. CCG offered SEM with particular focus on e-commerce.
Later, we acquired Webshastra in India to set up our India operations, which is core to our business model. Our acquisition of Webshastra is significant and brings to the company lot of online advertising skillsets and tools.
Our key service offerings are paid search and search engine optimisation. For paid search, we offer end to end solutions that include keywords, ads, landing pages, bid optimisation and have also been successful at integrating into client CRM systems.
Search engine optimisation is a more long drawn process akin to a marathon. There is no quick way to get a better ranking. The difference between SEM and other forms of media is that SEM actually allows you to track responses and have a fair amount of measurability.
Q. What works better for the client – paid search or search engine optimisation?
The advantage of paid search over natural search is that in natural search only the top three results are given attention by the consumer, whereas paid search offers a lot of control and freedom. You can bid for thousands of key words. For a client of ours who is in the area of debt consolidation, we concentrated on 890,000 keywords, including misspellings and it worked for the client.
Q. Is it true that paid search helps in getting new consumers and after they are familiar with the players, search advertising may not be that effective?
While it is true that search advertising helps in getting a new consumer, it would be wrong to say that an old consumer will not search for better solutions. When it comes to buying financial products or travel solutions, consumers want the best deal and they will compare and search for the best bargain. Thus, search attracts both kinds of consumers. Moreover, search advertisements appear at a time when the consumer is searching something on his own. So to that extent, it is not interruptive, rather it is supportive.
Q. What have been your experiences like in the US and the UK?
In the US, the market is more competitive and large. It is a mature market out there. Online advertising constitutes to around 8-10 per cent of overall spends, which is a significant chunk. Search advertising is growing at the rate of 30-50 per cent while total advertising is growing at a rate of 1-2 per cent. So, search is grabbing an increasing portion of the spends. What we have learnt in markets other than India, we try to leverage it.
UK, too, is similar. It is more of a difference between mature markets and lesser ones. Like in the US, the UK, too, has a healthy Internet ecosystem. Over 600 e-commerce shops, millions of searches, etc. exist. While search engine marketing is there in India, when compared with markets like the US and the UK, the difference is that of sheer scale.
Working in markets like the US and the UK help us perfect our process and tools. And that’s a great advantage to Indian clients.
Q. How has the acquisition of Webshastra helped you?
Our model was based around offering all our services in India. We came over with a build versus buy intention. Webshastra came in with a team, clients, knowledge and tools. That’s a good headstart for a business like ours.
Q. How does the association with Advertising.com help?
Advertising.com helped clients run their advertisements on a performance basis. In fact, technology has advanced enough to work on a cost-per-lead system. It means that the client pays for an initiative only when the effort has resulted in a positive lead. This kind of partnership is the perfect way to truly share the success of the clients.
Q. According to you, how is search marketing growing? What are emerging challenges and positive trends?
Search marketing is growing very rapidly. There is a lot of competition, which is very good for the industry. We are seeing breakthroughs across text and newer formats like video, audio, email, etc. What this does is that it opens more avenues for the clients. Moreover, the clients also have a very fair understanding of what they are paying for and where their penny is being spent or invested in.
Q. What do you think of India as a market for search marketing?
India has a smaller base. We feel that the online medium has not got its due. There is a lot of scope in areas like online education and entertainment. Such domains are going to open up. While banner ads have grown substantially with domains like finance, travel, matrimonial, etc., and have made hay while the sun shines, there are opportunities for search as well. The fact that there are around 25 million people on the net with 6 million active shoppers, reflects the tremendous scope that search can have.
Q. Tell us something about Erasmic Venture Fund that helped fund Position2.
Erasmic helps companies start their operations and furthermore take them overseas. It has taken care of legal formalities and procedural requirements. It is quite a hands-on partner and has been funded by Silicon Valley Angels that is focusing on how to tap the Indian market.
Q. How do media planners look at the online medium?
For the media planner, it is important to understand which medium works best in which situation. For a category like deodorants, we found that the audience surfs the net extensively and an experiential promotion can be done through the Internet as a medium. Another example is that of BMW. It found that most of its consumers were savvy Internet users. So they created 8-9 films that encompassed a great driving experience which brought considerable traffic to the net. The result was that BMW sold 40,000 units in two months’ time. This goes on to show that the choice of the correct medium can enable vast possibilities with effective results.
The Government has been an enabler and what it has done to the mobile telephony segment is definitely laudable. There are very few restrictions and a lot of benefits, which helps ventures. There are new developments like country-specific search engines. This will foster more competition and help the medium grow further.
Q. Please share some future plans of Position2.
The objective is to help clients take advantage of the opportunities that search engine marketing has opened up. It’s the most effective way to use the Internet for marketing. We already have a roster of 20 clients whom we work with and these are all through word of mouth. We wanted to go slow while we set up processes and scale up our teams.
The plan now is to really go full steam ahead. The US, the UK and India are key markets we will look at this year. Position2 plans to invest around $5 million over the next three years in India. This should help us build a substantial business.