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Net Ads: Back with a bang

29-March-2004
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Net Ads: Back with a bang

Advertising on the internet, which lost its charm with the dotcom bust, seems to be resurfacing, as portals and advertisers explore the medium once again.

It is an industry where figures are hard to come by but experts put the Indian online advertising market in 2003 at Rs 40 crore. In 2004, it should be around Rs 80 crore, said Yahoo country manager Neville Taraporewalla. While it is still a fraction of the total ad market which is in the region of Rs 12,000 crore, the bottomline is that internet advertising is growing (See Chart), he pointed out.

In the last one year, Yahoo India claims to have seen a 40 per cent increase in advertisements and a 100 per cent increase in revenues from the Net. Citibank has a separate divison for customer acquisition through the Internet. Sify, which admitted that there was a slump in advertising, says Hindustan Lever Limited (HLL), the largest advertiser in India, uses the Net for brands like Axe and Close Up, targeted at the youth.

“And when the largest advertiser in the country moves to the Net, then something is happening,” declared Yahoo country head Neville Taraporewalla.

Internet penetration is still not great in the country, but advertisers and marketers seem to be discovering and leveraging the interactivity of the medium as well as its ability to target specific demographies.

With the new focus, the advertising model has changed subtly. Last time around, there were too many people doing too many things and most portals offered pure banner ads. Together with the hype that created a mismatch between expectation and reality, online advertisements fell even before taking off.

Today, Internet advertising is centred around the interactivity of the medium. Sify’s e-scratch card for instance, was a take off on the retail level promotions where consumers could scratch and win prizes. On the Net, users could take the cursor to the scratch card — a blank space — and scratch the mouse over the mousepad to “uncover” a number which would fetch a prize.

Yahoo is offering its ability to target specific groups, based on age/gender/profession — culled from information that it gathers and stores everytime a new user registers him/herself.

In one campaign, Yahoo had a scheme for TTK which markets the Durex brand of condoms to have the message reach only those users who were male, and between the ages of 18 and 24.

HLL, too uses the Net for promotions, specially for youth-related brands, like Axe and Close-up. “A significant percentage of our target group uses the Internet,” said an HLL spokesperson. “It is increasingly becoming a channel to reach out to them,” he told FE.

Targeted advertising allows the portals to give customers exact numbers of people who fall into a particular category, and this is the value proposition that they are going to advertisers with to convince them. “We go back to them with the cost per contact,” Mr Taraporewalla said. FE found that banner ads on the Internet cost around Rs 20-25,000 per month, which compares very favourably with a small print ad that could cost around Rs 40,000 for just a day.

Four to five years back, when Internet advertising was just starting, there was “no hardsell, no scientific selling”, according to Mr Taraporewalla. Today, “there is a critical mass of people online who cannot be ignored in each category,” and audiences on the Net are the “opinion leaders” for each category,” said Mr VV Kannan, President, Interactive Services, Sify.

People are now asking themselves how they can use the Net’s interactivity to build brands, acquire customers and build relations, he said. The portal has 30 million registered users, while Sify has 8-12 million unique users.

An Internet Online Publishers Association is in the process of being formed to jointly drive efforts to bring more people online.

Globally, Google has reportedly gone a step further. The search engine does not base its ads on demographics, instead, it relies on the searches made by people. Ads for products can be linked to certain keywords so that anyone who does a search for these and related words will get to see them.

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