According to the 2009 edition of the PricewaterhouseCoopers report titled ‘Indian entertainment and media outlook 2009’, the share of the total advertising spend for the Internet space will increase to 5.5 per cent in 2013 from 2.3 per cent in 2008, and as Internet usage increases, so also would Internet advertising, which is estimated to grow by 32 per cent over the next five years and reach an estimated Rs 20 billion in 2013 from Rs 5 billion in 2008.
One of the challenges for an online company is monetising the traffic stream, which is said to mainly determine how well the website is doing. Getting a good ROI in any medium is the prime concern for advertisers, and if it is the Internet space, then it becomes all the more challenging to convince the advertisers about the value of the medium. However, some may disagree that brands or advertisers still need to be educated about the value of the medium, that the advertisers are now well aware that the Internet is a highly accountable medium as compared to any other mediums. exchange4media.com spoke to some industry players to find out whether monetising Internet traffic still remains a challenge.
Rishi Khiani, CEO, Times Internet Ltd, explained, “I would disagree that monetising traffic online is a challenge in the Internet space. In fact, what is required is a strong sales team. The focus must be on solutions selling, and while a lot of the content can be monetised by display advertising, it is creating innovative campaigns, creating properties specifically with clients in mind that really matters, thus showing results via these campaigns. I believe that the Internet has a lot of scope for innovation, and as long as it can show value to the clients, I don’t think it is a challenge.”
Amar Goel, Founder and CEO, Komli Media, observed, “I don’t see monetising Internet traffic as a challenge as some people can monetise their traffic very well, while others may have trouble. It depends a lot on which kind of traffic you have, because not all users are equal, just as not all sites are equal. For instance, Google can monetise traffic really well, but some gaming sites comparatively are unable to monetise their sites very well, while a new site or a finance site are somewhere in the middle. While everyone would like to make more money per user, ironically, Internet is not widely used by advertisers in India, nevertheless it is increasingly happening.”
Mandar Natekar, Head - Revenue and Marketing, BigAdda, commented, “Yes, monetising websites in the Indian online space is a challenge and that needs to be dealt with. On BigAdda, however, we have some trademark revenue templates through which we are able to create revenue opportunities around the brand. In fact, currently there are around 40-45 brands active on BigAdda, thus we are not really facing any challenge in terms of monetising our website.”
BigAdda’s Big Blog (Amitabh Bachchan’s blog) is said to have received traffic close to about four million page views a month and close to about three million unique visitors, thus enabling BigAdda to not only generate huge traffic, but also monetising them well.
Natekar further said, “The challenge, however, lies in converting the mindset of the advertisers and media planners, because while they understand television, ironically when it comes to the Internet, there is a blind spot, wherein clients themselves and media agencies are not able to predict the outcome of the campaign. One of the reasons, I believe, is that unlike in television or print, wherein they have a measurable template, in the case of the Internet it is lagging behind.”
According to Arun Mehra, Chief Marketing Officer, Zapak Digital Entertainment, “For any new media, monetising is a challenge and the same is the case for the Internet as well. Although the Internet has come a long way, there is still a very long way to go till the market begins to accept us as a medium that is far more acceptable than any other medium. I believe this is a challenge, but it is not impossible to overcome it.”
He further said, “At the end of the day, we are far more accountable than any other medium. Online medium delivers in a different manner, the medium’s deliveries are different, and thus convincing advertisers that this is a medium which delivers far better ROI was a problem at an earlier stage. However, now brands are becoming aware of this fact. The challenge for this industry is more of a broadband issue, that is, Internet penetration is very low and this is one big challenge and obstacle for growth.”
The step forward
On the other hand, Khiani maintained, “Broadband penetration is certainly increasing at a fast pace, and with that we are seeing different avenues of advertising, for instance, video advertising. With broadband rates decreasing and penetration increasing, we will see more rich media advertising. If you have a sticky audience, then there will be a high repeat value, therefore, creating a high brand loyalty.”
According to Komli Media’s Goel, “The industry-related solution would be to make more advertisers see the value of the Internet in general. We also need more transparency around data, traffic, and audience numbers, which we are providing through ViziSense. On the website front, we need more users to have a mass audience, while the number of users is getting large as compared to most other mediums, we need the numbers to continue to grow. We also need to think more about the advertisers and make the kind of packages and products that they want. Broadband penetration is low, which needs to be increased.”
While monetising traffic or getting better ROI may be a concern for some, industry honchos have a mixed reaction on the same. A lot of times there have been talks about evangelising the medium or educating the clients about the values of the medium, however, many believe that as of today, and partly thanks to the economic slowdown, that is not the case. A lot needs to be done, but primarily it is the broadband penetration that needs to be increased and how much budget is being allocated for digital media by these brands.