If you had any doubts about the popularity or the marketing sense of online advertising, think again. If the results of the latest Pitch study are any indication, advertising through the Internet is a medium that is fast gaining currency both among advertisers as well as consumers. To understand the value of online advertising, as perceived by advertisers and media agencies, as also the target group, "Pitch" recently commissioned a study titled the "exchange4media-iZone-Pitch-TNS Survey on Internet Advertising in India-2003-04". The study was carried out by market research company TNS India.

The scope of the research extended to understanding the market size of this sector, the sectors that increasingly lean on this media vehicle, and the kind of advertising that works on the Net, among other things. The study was also aimed at listing out the leading online advertisers, forecasting the industry trends, identifying the kind of adverts that the public usually click on, vetting the recall level, and the average time they spend on the Net. And the results are really positive, to say the least.

The fact is that leading portals are gung-ho about the viability of online advertising. So are media agencies and the marketing community. And this optimism stems from the radical changes taking place in the telecom landscape, with the major thrust being on a massive expansion of broadband as the in-tool of the future. With the ongoing broadband expansion, this revolution is going to drastically remodel the country's online space within a short span. Capping these facilitating factors is a proactive regulator, Trai.

The methodology we followed in this study was exhaustive. To arrive at the conclusion, we have adopted a two-pronged strategy -- a qualitative study as well as a quantitative method. For the qualitative research, in-depth interviews were conducted -- using an open-ended, semi-structured questionnaire -- among chief executives and marketing heads of leading portals. In the quantitative study, the survey carried out door-to-door interviews using a semi-structured questionnaire among SEC-A & B, both men and women in the 25-40 age bracket; who surf the Internet at least four hours a week. The target group of 397 respondents was randomly surveyed in the four metros of New Delhi, Mumbai, Kolkata and Chennai. The consumer research factored in areas such as the most frequented sites, which ads the respondents have noticed, and the kind of 'click-ins' the respondents indulge in; how long they surf and what kind of ads do they recall; and whether they had made online purchases so far, among others.

The growth of online advertising is being propelled by a host of factors. The foremost is the perceptional change that is being witnessed among leading marketers, media agencies and consumers. While on the one hand marketers are increasingly looking at this medium as a 'lead-generating vehicle' and a 'promotional vehicle', besides being a B2C and e-commerce tool', consumers are steadily taking to it as an effective, hassle-free medium for shopping for products of their choice -- be it gifts, flowers, a date, white goods like refrigerators, washing machines, cameras, music CDs, apparel ranging from lingerie to casuals and formals. Nonetheless, it has to be noted here that despite all this thumbing-up, the percentage of people who go in for online shopping still remains abysmally low, primarily because of the low ratio of Net-savvy population. There is a clear need to ramp up Net penetration in this gigantic country.

Despite the low ad spend on the Net of just one percent (Rs 40 crore or so last year) of the total advertising spend, leading portals are hopeful that online advertising is set for a boom on back of the unfolding broadband revolution, the mushrooming of cyber cafes on railway platforms, and other government-run e-programmes to ramp up the Net-base. They foresee the netizen population touching a healthy 30 million by end 2004. They are also hopeful that the industry will start spending more on online advertising and the percentage of total spend on the online medium is set to touch 5 per cent in two years.

Learnings From Qualitative Survey

Chief executives and marketing heads at leading Internet portals are gung-ho about the growth of the online advertising medium

Steady Growth

Yes, marketers and media agencies are increasingly looking at this medium -- growing at a reasonable 15-20 per cent this year and slated to clock a smart 35-50 per cent growth in the next financial year -- to reach out to the select audience. Having said so, it must be noted that despite this impressive growth rate, marketers currently divert a meagre 0.5 per cent of their total ad spend to this medium. This would work out to a spend of around Rs 50-60 crore this fiscal; last year it was marginally less at around Rs 40 crore. But there is no need to lose heart: online ad spend is forecast to post a ten-fold increase soon.

The Early Birds

Which are the leading industry segments that are driving this medium? Portals as well as the advertising fraternity admit that the sector is highly fragmented; hence, definitive figures are not available. Even so, the study finds, leading the pack are insurance companies which spend the maximum on online advertising, followed by automobile players, FMCG companies, IT education institutions like NIIT and Aptech, white goods players, airlines, banks, credit card services, mutual funds, apparel brands and telecom (mainly mobile players). But in terms of gains, it is the travel and banking sectors that gained the most.

Pop-ups Lead Pack

What is the kind of advertising that marketers prefer to ensure higher recall and value for their money? They are unanimous that pop-ups offer the maximum mileage followed by super-banners and banners. In terms of the mean ranking points, the pop-ups grossed eight points, super-banners seven points and banners six points.

How do these experts and players who include marketers and media planners see Internet advertising as a marketing device? They see it as three-in-one tool. They deem online advertising mainly in three ways -- as a lead-generating vehicle, as a promotional vehicle, and as a B2C and e-commerce tool.
Yes, online advertising is a big reality, and is set to grow.

What Does The Consumer Say

To elicit the views of consumers, the survey contacted nearly 400 people in the SEC-A&B categories, both male and female, in the metros of New Delhi, Mumbai, Kolkata and Chennai

Growing Net Base

Surfing has been found to be rampant enough among the respondents with a large majority saying they spend an average of four hours a week surfing. Interestingly, Kolkatans lead the surfers' pack with 63 per cent of them surfing one-two hours regularly. But thanks to poor connectivity and low PC penetration, most of them access the Net at their offices/cafes. The preferred sites are Rediff, Yahoo, Naukari, Indiatimes, Hotmail and MSN. But as far as the choice for sites go, the Chennaiites threw up a surprise -- they prefer Chennai online.com and Webulagam.com to other portals.

Higher Recall

The survey found that the recall level of online ads is quite high except in New Delhi. As many as 94 per cent of Kolkatans who clicked on ads remember the ads, almost same number (90 per cent) of Mumbaiites also recall the online pop-ups, and in Chennai it is 61 per cent. But what is of concern is that clicking-and-browsing is a low priority among surfers. While only 15.5 per cent Delhiites click and browse through the pop-ups, it is 12 per cent in Kolkata, and 22 per cent in Mumbai. Chennaiites are a bit better with 37 per cent of them clicking and browsing online ads.

Bankers Leading Pack

Now here is something for brands. Advertisements of ICICI Bank lead the recall stakes among Net users across these cities, followed by Citibank (except in Chennai even though the bank's country office is headquartered there; Nokia leads the pack in the southern metro), Hutch, Panasonic, ABN Amro Bank, HDFC, and the Korean white goods majors Samsung, LG.

Thumbs down to online shopping

A surprising finding is that a vast majority don't shop online despite clicking on ads. Only 33.3 per cent of surfers shop online in Delhi and Chennai. The figure is smaller for Mumbai surfers (22.7 per cent), and the lowest in Kolkata (21.6 per cent). Again, there is a distinct lack of interest in exploring the pop-ups that whiz past on the PC screen while browsing the Net. Interestingly, the Net is used extensively by the surfing population to seek details about products prior to purchasing them. In Chennai 66.7 per cent of surfers seek online product information; in Mumbai it is 50 percent; in Delhi it is 46.7 per cent; and in Kolkata it is only 24.3 per cent.