Head | 19 Aug 2011
We have a four-part strategy for MSN India. Firstly, we are going to grow our content both vertically and horizontally. Secondly, we are looking to engage with rich media content increasingly. Thirdly, there is going to be a seamless conversion between MSN on the web and MSN on the browse… Our next phase will focus on going local and hyperlocal. We will be focusing on it when Bing comes in India, which is expected soon… We just launched a new portal, MSN She. We are looking to launch two or three more interesting projects by the end of this calendar year. They will be in the domain of astrology and other similar domains.
Microsoft’s MSN India is amongst the most popular web portals in India. With the launch of a new portal MSN She, it is looking to expand its functions in India across other categories as well. Going mobile is also an important part of the MSN strategy this year.
Sanjay Trehan, Head of MSN India, is an Internet veteran with over 20 years’ experience in the industry. Prior to joining MSN India in 2009, he was CEO of NDTV Convergence, the digital arm of NDTV Group. He has also worked as VP, Broadband and Web 2.0 at Indiatimes and as Chief of Internet with HT Media.
In conversation with exchange4media’s Shubhi Tandon, Trehan discusses the challenges and growth opportunities for the digital advertising market in India and MSN India’s growth strategy in India...
Q. How big is the digital advertising market in India?
If you look at the overall size of the digital advertising market, it will be around $240-250 million at this moment. But the digital market is expected to grow three times its size in the next three years and reach $750 million by 2013-14. So, it is the fastest growing industry and the future augurs really well for this industry. By digital advertising market here, I am referring particularly to display and search.
Q. What are the growth drivers for this market then?
For the growth of this market, I believe that the whole environment is actually conspiring to make it happen. Today, we have about 70-100 million Internet users. The personal computer (PC) penetration is increasing. We are seeing increasing adoption of the usage of computers in the youth. The bandwidth and broadband prices are going down. Access is no longer an issue for consumers. Mobility access of Internet through mobile devices is also opening up. India is leapfrogging technology, and the technology consumption levels are rising. There is also the emergence of the middle class and disposable income is growing, while the economy is recording an 8.2 GDP growth. So it is this whole environment and the ecosystem that will drive the growth.
Q. While you say the market is growing, the digital pie in the advertising spends is still at 2 per cent. Why is it so?
I believe that what is a challenge today is an opportunity tomorrow, because the spends are only going to grow. In developed countries like the US, for instance, it has already crossed more than 5 per cent. So it is only going to grow.
One of the reasons that I believe that the spends are low today is because of the fact that to some extent, the larger ad agencies are not actively evangelising the digital medium. There are instances that the clients are demanding digital, but the larger ad agency is not actively selling it, as it is lazy selling from their point of view and I have often said it.
Because when the larger ad agencies make an ad on television or print, they straightaway make their commission off the big budgets. But digital requires a lot of planning and detailing in terms of narrowcasting of the message and the medium. It is also a very accountable and performance driven medium. As a result, in terms of their time spent on this medium, they feel that they can make easy money in other mediums. That is why they are not supporting it.
Q. What would the challenges be in the growth of the digital advertising market in India?
I think that firstly, PC penetration in India still needs to be improved. A PC is still an expensive device in India. So that is the single biggest challenge.
The second biggest challenge is the last mile connectivity in broadband. While we have laid down the infrastructure and the cable, the access to the consumer’s house is still not there. There is a lot of lethargy in the system and the delivery mechanism is still not in place completely.
The third challenge I believe would be, how we can go into rich media. It is important to note that while we have defined broadband in India as 256 Kbps, it really is not broadband and this impedes the adoption of rich media content.
And the fourth and the most important challenge is monetisation. The monetisation pie has to grow. Currently, as you rightly said, it is 2 per cent of the total ad spend. The pie in itself is so small, and there are so many players who are struggling to get a share of the pie.
The fifth challenge would be a rollout of services in the Tier II and II cities. While we are seeing an uptake in the Tier II and III towns, it is still not fast enough in speed and wide enough in reach. It also not monetised at the moment. I believe that as the Internet is truly an all pervasive medium, there is no reason why it should not grow.
So despite these challenges, it is my belief that the medium will grow as it is essentially a game changer.
Q. Why do you say that?
To see the power of the medium, look at how it has changed the fate of nations – from Tunisia, to Libya to Egypt and look at the role social media is playing in mobilising mass support for Anna Hazare. While Anna’s movement is also being led by television, but the whole movement – India Against Corruption – was born on the Internet and social websites such as Facebook and Twitter.
Q. What role do you think mobile plays in digital advertising?
I feel that from India’s point of view, mobile is the most important screen of the three screens – TV, PC and mobiles. The challenges that content developers will be facing increasingly would be to customise the content for mobile. So, we are very gung-ho on mobile and what we are looking at is the convergent play between the mobile and the PC or web space. I believe that the ‘web’ and the ‘browse’ need to talk to each other. The content needs to flow seamlessly across these screens, and any play which seeks to harness this interface between the ‘web’ and the ‘WAP’ browser will be able to truly leverage it to its advantage.
Q. 3G has just been introduced in India this year. What are your thoughts on how it can help leverage this medium?
I am a great believer in 3G, because what 3G does in simple terms is actually give users better access. It is a fatter pipe, which allows users rich media downloads. So, as rich media consumption goes up, so does the data consumption. This is better not only from the consumer’s experience point of view, but from the operators’ point of view as well in generating more revenue. But I think the overall experience is better. Just like multiplexes replaced old cinema halls, 3G will allow a similar change for mobile web.
Q. What are your views on the buzz on social as part of the digital marketing strategy?
I believe that it is a must do. But it should not be like a tick in the box and has to be the most logical part of the digital strategy, because it is nothing but the buzz about the consumer. If the consumer activity is happening outside your domain, then the brand will get irrelevant. So the brand has to necessarily join the conversation, and not just join in but also actively engage with the consumers. The brand should use it to listen to consumers and co-opt them in the whole creative process and maybe help the brands to shape up better. So I am a very strong supporter of social and feel it is a game changer.
Q. In a guest article in exchange4media.com, you had written about the need for a unified body for web measurement. What do you think about web measurement techniques?
I had said that these are still early days. But I think that it is increasingly being felt that there is need for a third-party measuring independent agency to add to the overall Internet-buying scenario.
It is a complex task, because in digital, we are talking about an audience of one. Unlike mass media, where the common TRP based systems would work. We are not talking here of dissemination of information according to the socio-economic categorisation – A, B or C, we are talking about an audience of one. So when it is the concept of one, the accountability goes deeper and the narrow casting has to be very refined, which is a challenging task.
Another challenge is the opt-in of consumers. The Internet consumer has to be co-opted in the process and his consent taken in terms of gathering of that information.
Q. How do you suggest that should be brought about?
It has to be an industry-led movement, and if you can peg a consumer gratification that would be even better. We can peg a consumer gratification or incentives, which can either be monetary or just about giving the consumer a voice in the whole process. So these are the details that need to be worked out. But by and large, I believe that there is an imperative need of third-party based credible system.
We are seeing the beginnings of it – for instance, in Nielson, comScore and ViziSense. But they need to gain much wider acceptance and need to become more granular. Currently, they are not granular enough, so that is where the next versions would be. Since digital is a fast evolving industry, I guess this is work in progress.
Q. Coming specifically to MSN India, what is the growth strategy for the portal?
We have a four-part strategy for MSN India. Firstly, we are going to grow our content both vertically and horizontally and so add both depth and breadth to our content portfolio. Secondly, we are looking to engage with rich media content increasingly. So video is going to be an important part our strategy for the next couple of years.
Thirdly, and most importantly, is that there is going to be a seamless conversion between MSN on the web and MSN on the browse. So we are actively launching MSN on the mobile. Lastly, we are focusing on co-opting social into the whole MSN experience. So we are increasingly going social and have a presence on Facebook, Twitter and other social websites.
These are the four pillars of our strategy. Our next phase will focus on going local and hyperlocal. We will be focusing on it when Bing comes in India, which is expected soon, and then we will be looking at examining search based programming using Bing. So that is a part of our overall growth strategy.
Q. Any other new portals you are looking to come up with?
We just launched a new portal, MSN She, which is an ultra-feminist portal. We are looking to launch two or three more interesting projects by the end of this calendar year. They will be in the domain of astrology and other similar domains. Astrology is going to go live very soon, and it would have the complete gamut of astrological content and not just horoscopes.