Yahoo! After all these years of patient work, not only has net advertising finally begun to take off, it is now playing an important role in brand building as well. The latest Business Week has a special report on just this, and according to the magazine, online advertising in the US will touch $9.3 billion this year, of which $5.4 billion is brand advertisement—all told, this is around 4% of total adspend in the US. Since we in India spend around 1% of our total adspend on internet advertising that doesn’t seem too bad, does it, considering the stark difference between the proportion of population that uses the net regularly.
The issue, to my mind, is not the amount we’re spending on net advertising, but really that there are some major changes that have taken place that need to be kept in mind. For one, the most productive ads, it would appear from the US experience, are not the old fashioned static banner ads on a website, for instance. They’re ’search’ ads. So, for instance, a company selling flowers could put an ad with a search engine like Yahoo! or Google, and the next time you do a search on flower, you’ll get something else along with the usual list of websites dealing with flowers. What you’ll get is a boxed piece of information called ’sponsor results’ on the right side of the search results page that you see—the benefits to be got from such advertising are obvious. This search-ad business is expected to touch $3.9 billion this year.
From whatever search I’ve done so far, I have not yet come across too many Indian companies using this facility, except for a lone company offering advertising and liaison services for the Indian market and one manufacturing roller burnishing tools which has ISO 9001 accreditation. A key facility offered by these search engines is the ability to do comparison shopping and research big ticket items prior to their purchase, cars being a key category.
A study done recently by Rediff.com in conjunction with Chetana Institute of Management and Research, on the relevance of the net for internet users planning on buying a car showed that 31% trusted the net as a source of information, virtually equal to those who said they trusted print ads or television for the same. Further, 28% per cent of them clicked on car ad banners and 6% were influenced to buy. While the numbers in themselves are too small, it is interesting to see that the net emerged a strong influence on customers for companies that advertise heavily on the net, Maruti and Chevrolet Optra being key ones.
Contrary to perception, the net also delivers instant feedback on the success of a campaign by showing the number of clicks received on that advertisement/ banner. Ford, in the US when launching its F-150 truck placed banner ads on the top three portals on the launch day and got 3,000 clicks per second, leading to a 6% jump in sales initially, Ford has now earmarked 10% of its budget to online advertising. Of course, the success of these campaigns is also on account of the fact that more than half of the American households have net connections that are online all day and that broadband now permits video clips hence television like ads.
What is encouraging for advertising companies besides the fact that net advertising measures response accurately is that now, unlike in the earlier days of dotcoms, software can actually track which sites an individual’s computer visits andwhere she clicked, assimilate all that and deliver a targeted ad straight at the next click of the consumer’s mouse.
An online marketing company called Tacoda has lauched a software called AudienceMatch, where a network of websites place their ads based on how people surf their network. Websites like USA Today and Tampa Tribune are part of this network that amongst them gets 100 million people monthly. The reason the software works is that no one gets to know who the netizen is, just where she clicked, and the sites she’s interesed in.
Sceptics would say, as we all did, when the dotcom boom went bust in India that computer ownership and net penetration levels are even now the reasons why internet advertising is a long way from take-off in India compared to America where half of their households have always-on net connections. Well, all this may not be strictly true anymore, if you consider the fact that cyber cafes in India today provide access to the internet for Rs 10 an hour making it unnecessary to own a computer in order to access the net. The fact that these cyber cafes are to be seen at every street corner is testimony to their popularity of use as well.
Similarly, the rural internet kiosks pioneered by Prof Ashok Jhunjhunwala appear commercially viable and so are likely to find many takers amongst rural entrepreneurs (I had written about in my last column dated November 8, 2004). These are enabling net access to the rural consumer as well. And since there’s a market of 600 million consumers out there in rural India, and they are getting connected, why aren’t marketers following?
Namita Jain is a retail consultant. She can be contacted at email@example.com