Growth drivers for digital advertising

MUMBAI: Digital advertising is dwarfed in India by print and broadcasting, contributing a tiny amount of Rs 15 billion compared to the total pie of Rs 300 billion.

The good news, however, is that there is a huge growth potential as it now just makes up one-fourth of television penetration in India. Some even predict that this will become a billion dollar industry in three years. Though the forecast may spell doubts from many quarters, it is sure that the climb is going to be rapid in a country that boasts of a large youth population.

India already has 120 million Internet users and 50 million mobile Internet users, making it the third largest market from the users’ point of view.

With the increase in the number of mobile and Internet users, digital is the space for the future. A lot has been said about how digital will make the world smaller and bring people closer. More buzz is now being created around the prospects of monetising one‘s presence in the digital space.

Google, the world‘s largest search engine company, is bullish on the Indian market. Says Google India VP and MD Rajan Anandan, “There are 50 million mobile Internet users in India and by 2012-end there will be more mobile Internet users than laptop and desktop Internet users together. Also, in 3-4 years there will be more Indian businesses advertising through the online media. In three years from now, this will be a billion dollar industry.”

For Anandan, 2012 should be the year of online video. “The web today has become utilitarian. It is being used to search for products and services and also buying them. This has marketing implications,” he says.

Web-based advertising is emerging in India. There are also many forms of mobile advertising and with the adoption of smartphones, this should grow further.

A large amount of digital consumption in India will happen on mobile. Says KPMG India director-strategy ransaction services Varun Gupta, “Advertisers are looking at print and then adapting to digital. Print and TV comprise around 80 per cent of ad budget, where print is larger than TV. Readership is a comfort zone and, thus, print is still having the largest ad spend.”

The digital share of media always starts with performance and India is at an early stage. "A large base of performance-based advertising from print is already going online like job listings and real estate,” Anandan avers.

The reason why the shift to digital is taking time is because Indian web is in English while print is regional and a chunk of population is still more comfortable conversing in their regional languages. “2012 will mark the take-off of regional/ local web. On web we have empowered users to watch the ads that are relevant for them. It may or may not affect revenue. The trick is how to generate content for online ad,” Anandan adds.

The real strength of the Internet has surfaced after the social media revolution. Traditional media in India is feeling the early tremors of disruption from technology and social media tools.

Says MSL Group CEO Olivier Fleurot, "There is a need is to engage with the users. Credibility of online medium is growing faster and social media is helping.”

GroupM South Asia CEO Vikram Sakhuja feels technology is underestimated in the long run and over-estimated
in the short term. “With digital media one has the ability to move census as it gives opportunities for measuring. Also, digital has power of interactivity. Today it’s a two–way communication that is profound. Digital has the ability to move across different devices and different media and there is real time query and real time consumption of content. Currently digital gets only the 3 per cent of the overall advertising and these advantages will help it grow over the next few years."

The syntax of content is going to be different. User Generated Content (UGC) will change the way marketers work. This will result in the role of 30 seconds commercial coming down.

"Digital is allowing scaled word-of-mouth. There will be new distribution and sales channels. Rather than being linear, marketers should find out different ways to reach their customers," Sakuja says.

Even in cinema, digital advertising will catch on. Says UFO Moviez joint MD Kapil Agarwal, “Analogue cinema advertising was dying a natural death. But with the emergence of digital advertising, today all theatres are connected. We can make the print in digital and the advertisements can be changed every week. There is more flexibility and it can also be interactive.”

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