"India has yet to make the transition to the 'connected space'"

In India, traditional advtg is still growing. Here, digital is a small part, it is not mainstream, says Nikesh Arora, SVP & Chief Business Officer, Google

e4m by Arshiya Khullar
Published: May 1, 2013 7:55 PM  | 3 min read
"India has yet to make the transition to the 'connected space'"

The advent of digital has resulted in a change in the very nature of advertising. The traditional construct of advertising built on monologue and one-way communication is giving way to a more engaging and effective dialogue between the brand and its consumers. With new media’s unique advantages in terms of reach, interactivity and analytical capabilities, an increasing number of brands are embracing the all pervasive digital medium.

According to Nikesh Arora, SVP and Chief Business Officer, Google, this shift from mass media to a more personalised and interactive digital medium is perhaps one of the most disruptive events in the history of media since the evolution of radio and television, and the transition will therefore take time.

Till now, as Arora put it, there have only been shifts from one mass medium to another; print gave way to audio and radio gave way to the emergence of video advertising on television.

While several countries across the world have embraced this change and moved from offline to online or the ‘connected space’ as Arora terms it, India is yet to make that transition. The percentage of a marketing budget that goes towards digital is still more or less in single digits and specialised digital agencies are only beginning to gain ground.

“Digital advertising industry in India currently stands at 7.2 billion dollars and is growing at 10 per cent. Digital is around seven per cent of the media mix and, excluding online classifieds, is growing at 50 per cent. If the inflection point is 10 per cent of the media mix, that will happen in around 18 months and if it is 15 per cent, it will take three years. We still have a long way to go,” said Rajan Anandan, VP and Managing Director, Google India.

What are the constraints that are impeding the growth of digital advertising in India commensurate to global standards?

According to Arora, while there is tremendous demand, there are supply constraints that need to be addressed. There are technological infrastructural challenges that are stalling the growth. Another reason is the relative importance of traditional versus new media in India. “In India, traditional advertising is still growing by leaps and bounds as compared to other parts of the world where people have already transitioned to digital. Here, digital is a small part, it is not as mainstream,” he said.

To understand the complexities of the digital medium and fully leverage its potential, the growth of specialised digital advertising agencies and integration of different verticals is imperative. Arora added that as opposed to the current structure of advertising agencies where media buying is commoditised, digital is a more complicated setting where each media vertical has a different social graph and different objective. “As opposed to television, in digital, creative and media need to work together and have greater interaction. There also needs to be work done to mine user data to create the right experience for the customer,” he said.

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