Advertisers wake up to value of the Net

By Shanthi Kannan

CHENNAI, JUNE 18. Online advertising has become the order of the day. With Internet emerging as an important medium of communication, this is not surprising. The growth of electronic commerce has only spurred industry and trade to take to Net advertising increasingly.

Not just across the globe but in India, too, the Internet has become an important constituent of the media mix conceived by advertisers. In the last six months, several leading names in the Indian corporate world have experimented with online advertising. Marketers in India are using the Net to achieve their business goals by creating brand awareness, generating leads, selling products and services and building one-on-one relationships. Leading advertisers on the Net include, among others, names such as Intel, Amul, Citibank, LG, Ford, Standard Chartered, Gillette, ICICI Bank, McDowell and Bacardi.

Traditionally, advertisers have been buying space in the form of banners on the Internet directly from web sites. This has been in terms of a certain amount paid to procure a month's advertising on the site. Now, there are firms which offer a network of sites to place the banners on, with targeting options such as country, city and time-based advertising.

The annual advertising revenue at present on the Internet in India is Rs. 10-12 crores (for 1999). This is estimated to go up to Rs. 35 crores in 2000 and Rs. 100 crores in the next three to four years. The growth is more likely to be driven by the IT industry, the finance industry and the dot coms.

Advertising agencies, ad networks and portals will need to focus on educating the general public on the effectiveness of online advertising and the possibilities that it offers, feels Mr. Matthew McGarvey, Internet Analyst for IDC Asia/Pacific. He has predicted that much of the growth in online advertising in Asia/Pacific will occur between 2002 and 2004.

Internet has advantages over traditional media as an advertising medium. According to Ms. Padma Chandrasekar, Vice President, Satyam Infoway, it enables advertisers to reach targeted and specific audiences across borders at specific geographic regions, and at consumers with specific demographic profiles.

Unlike the broadcast model of traditional media, the Internet is truly an interactive medium. Advertisers can receive immediate feedback on the effectiveness of their ad campaigns. Internet enables them to serve impressions of a particular advertisement over a specified period for a specified number of times.

Ms. Padma Chandrasekar feels Internet ad campaigns are less time- consuming, less expensive and easier to produce than advertising in traditional media. They are also logistically simple to handle: even big campaigns spanning several content sites can be run from a central location.

The current Internet base in India consists of over two million users and is likely to go up to 9 million by 2003. The user-base is 55 per cent corporate, 30 per cent through cyber cafes and 15 per cent home users. The number of Internet users will exceed those of most Asian countries (expect China) over the next five years.

What are the problems faced by advertisers while going in for online advertising in India? At present, they do not have full- fledged Internet marketing teams within their organisations. It is, therefore, difficult for them to co-ordinate the various Web related advertising activities. Then there is the inability of content sites to provide targeted advertising. At present, most of the contents published in India do not offer targeting technologies that help the advertiser reach out to specific target audiences, says Mr. Na. Vijayashankar, Resident Director, R. K. Swamy BBDO.

The Internet user base in India is highly fragmented and no single site reaches out to more than 10 to 15 per cent of the base. Individual sites are thus not attractive for an advertiser.

The likely drivers of Internet usage in India will be falling PC prices and increasing PC penetration. The PC penetration in now extremely low. Third, broadband Internet access through cable TVs. Finally, growth through alternative channels like cyber cafes.

Send this article to Friends by E-Mail

Section  : Business
Previous : Both old & new economy stocks set to gain
Next     : Late rally on Lyons Range