Mint Coverage Webchutney Digital Outlook 2010

12‘ THURSDAY, OCTOBER 7, 2010, DELHI www.livemint.com Technology mint The online 2- 9 8,9-50 1 09 1 20 1 experimenT Despite a slow start, online advertising continues to gain momentum, 6,08809 thanks to its growing reach and the awareness of consumers. 10 2 , 13 210512(E) Text by Abhilasha Ojha; graphic by Uttam Sharma/Mint 1 - 20 Year-on-Year GroWTH In aD SPenD Using social media It’s clearly with the need to connect with younger consumers that the report has noticed an increase of 50% in social media usage by advertisers. Facebook, YouTube and Orkut continue to be popular social media platforms for advertisers. General Motors, for instance, ended up with more than 10,000 fans on Facebook in less than six months. primary executions Ongoing Planning to use Not too sure when GrowinG online medium Though online spend share of the top 1,000 advertisers remains Band website Promo website Display/text I 2% 2% low at 4% in fiscal 2010, it’s still a jump from 2% in fiscal 2009. Online advertising share will continue to grow albeit slowly and is n 2009, Webchutney nual growth rate (CAGR) of 15% 24% Studio Pvt. Ltd, a Delhi- from 2008 to 2011. Moreover, 31% expected to touch 5% in fiscal 2011. Ad spend share will continue to be dominated in 2010-11 by television (close to `8,100 crore), based digital marketing the ad spending of the top 1,000 8% 69% 62% agency, studied the at- marketers increased 16% in 7% followed by print (`6,690 crore), and below-the-line advertising at 85% titude of marketers, usage 2009-10 from the previous fiscal. `3,758 crore. In 2010-11, online advertising is estimated to grow and ad spending allocation to In fact, 14% growth is expected at `876 crore while mobile advertising will marginally increase to EDM Display-rich/ Social media digital media compared with in the 2010-2011, increasing reach `129 crore. interactive platforms traditional media, such as print overall ad spending to `21,523 Fiscal 2009 TV Print BTL Outdoor Radio Online Mobile and television. The study was in crore. 951 551 collaboration with knowledge Though the online spending 38% 38% 38% 6,401 5,610 2.348 partner JuxtConsult Research share of the top 1,000 advertisers 55% 51% 50% 363 65 and Consulting Pvt. Ltd. is still quite low at 4% in 2009- 8% Fiscal 2010 11% 13% Digital Media Outlook 2009 10, it marks an increase from 2% 1,032 714 7,284 6,183 3,040 showed how the slowdown in 2008-09. It is estimated that 603 95 prompted many advertisers to the share of online marketing secondary executions Fiscal 2011 (est) look at cost-effective advertis- will grow to 5% in 2010-11. Ongoing Planning to use Not too sure when 1,103 882 ing, including mobile and online The report also observes that 8,088 6,687 3,758 Ad network SEO/SEM Contextual modes. 2009 was touted as the year of search/listing 876 129 Digital Media Outlook 2010 mobile advertising in which the continues to track the trend in spending share was expected to the online and mobile space grow over 600%. Actual growth 43% 33% 44% 49% 51% 59% as far as ad spending goes. The has been only 45% and is likely scope of the study has wid- to slow to 36% in 2010-2011. 6% 8% FallinG moBile spend ened—it covers the top 1,000 “The scope of marketing in 8% Mobile advertising spends have been low at 45% in fiscal 2010. In fact, marketers, including brand the mobile landscape has been this is likely to drop further to 36% in fiscal 2011. Mobile advertising chiefs and marketing and com- hyped. There’s been too much Paid keyword Adverblog Paid inclusion stood at `65 crore in 2008-09 and saw a marginal growth of 0.5% in search munication heads of various expectation in too little time,” 2009-10 and stood at `95 crore. And while sectors such as consumer sectors. Last year’s survey had Rao said. “The number of mo- services, auto and durable goods had the maximum spend share in the 33% 32% 31% the top 500 advertisers in the bile Internet users is too small to mobile segment (21%), pharma spent only 1% in the space. Telecom, too, space. spark marketers’ interest in this 63% 63% had a low spend share in the segment of just 2%. “Our primary objective was medium.” 60% 7% 4% 7% to study the nature of allocation The report states that only of ad spends by top marketers 25% of marketers say they plan Durable goods Blogs Mobile ads/apps Fiscal 2009 Fiscal 2010 across various mediums. In the to increase spending on mobile 21% 10% Infra/Manufacturing process, we also analysed the advertising in 2010-11 while 38% Lifestyle goods rationale that drives spends want to cut it. 26% 65 8% 28% 95 towards the online media,” said While verticals with IT/ITES/Internet Siddharth Rao, chief executive maximum overall ad spending 5% 63% 11% 7% BFSI officer, Webchutney. contribute the least online, it’s 67% Real estate The study, conducted marketers with the smaller ad 129 6% 2% Telecom between April and July 2010, pegged the overall ad spending budgets who spend a higher marketing budget online. 3% tertiary executions 21% 1% Pharma of the top 1,000 marketers at Despite challenges, Digital Ongoing Planning to use Not too sure when `18,950 crore in 2009-10. Media Outlook 2010 reports that Fiscal 2011(est) Auto It also estimated ad spend- online ad spending will increase Viral marketing Online video E-commerce 21% ing growth at a compound an- by 45% in the next financial year. Consumer services 21% 21% 20% 5% 6% 14% Banks BiGGest overall (Fiscal 2010) online (Fiscal 2010) 66% 74% 75% spenders 1% Retail 3% The FMCG sector, with the largest 1% IT/ITES/Internet 13% Branded Referrals/affiliates In-game advertising sponsorship overall ad spend of `7,910 crore at 2% Media/entertainment 3% 42%, spends only `56 crore or 9%, on 11% 9% 3% Real estate 4% 19% 6% 10% advertising online. It is the banking, 3% Pharma 2% 5% finance and services industry which contributes the maximum (around 4% Lifestyle goods 2% 76% 84% 82% `114 crore or 19%) to total online 4% Infra/manufacturing 2% spends. This is followed by sectors 6% Auto 4% Virtual/augmented App-vertising such as consumer services which 7% BFSI 19% Podcasts Reality spends `108 crore in the space. 8% 3% 7% 2% 7% Telecom 12% 7% 5% IT spends `79 crore and telecom spends `70 crore in the online 9% Consumer services 18% advertising segment, according to 11% Durable goods 9% the report. 42% FMCG 9% 90% 87% 93%

mint TECHNOLOGY 13 THURSDAY, OCTOBER 7, 2010, DELHI ° WWW.LIVEMINT.COM Tracking viewers online Mrutyunjay Mishra, co-founder of Webchutney Studio Pvt. Ltd, says advertisers haven’t yet utilized the potential of the online medium in terms ONLINE STRATEGY SIDHARTH RAO creaTing brand awareness Online media is effective in driving traffic to a website. And while of advertising. While 73% of advertisers view only the click impressions Sidharth Rao is cofounder and CEO of Webchutney the medium barely helps in driving traffic to a store, many adver- (the number of times viewers click on the site), 84% don’t know how to feedback@livemint.com tisers admit that it can create brand awareness. “Digital platform track viewers who reach advertisements or companies through social as an advertising option is evolving fast and this is where we feel media. Advertisers cannot think of the online medium as a substitute for traditional media. They need to look beyond just clicks, added Mishra. FROM INTERRUPTION it’s right to invest. We believe that the youth are opinion leaders and we would like to target them,” said L.K. Gupta, chief marketing officer, LG Electronics India. CPM CPC/CTR/CPA Page views/ site visits TO ENGAGEMENT 53% advertisers Only four out of 27% 10 marketers Online scores 30% 33% 67% 70% 73% A s we evaluate and take stock of the impact of digital technologies over the last few years, the wave of change and maturity in consumer behaviour is evident. The Internet believe online is “less effective” in creating consider online as an effec- as an effective medium only for tive medium driving traffic to has enabled a shift in the consumption, production and brand aware- curation of relevant content in a relatively young nation in engaging a website and ness compared which embraces new ideas and technologies eagerly, and has customers creating top- to traditional Number of Response to mail Audience measure- found a strong voice in online communities and networks that of-mind recall leads generated ment system (paid) media provide instant contact with the rest of the world. among users What does mean spell for a brand struggling to find its way 23% into the lives of empowered and “connected” consumers .0 46% spoilt for choice? And how far do marketereers go to stay n Creating brand awareness 47% Driving traffic to a website n 53% 54% ahead of their consumers and competitors in 77% adopting/integrating path-breaking channels to create .4 nless effective nGenerating leads distinct, memorable brand experiences? Can their current initiatives do justice to the speed at which their consumers .2 Audience measurement Reputation metric are evolving? Share of voice More effective n system (free) for social media In our discussion with decision makers who hold the power to drive this change in traditional marketing strategies, sadly, .0 20% 15% 16% for the most part, it is easy to notice the ignorance of an Driving traffic to a store n nDelivering promotions to customers increasing gap in their existing efforts, specifically when it comes to integrating digital media at the core. While most are -.2 privy to the changes triggered by digital media across 80% 85% 84% demographics, they have failed to optimize the use of such nSelling products or services offline Engaging customers -.4 channels beyond the obvious. nIncreasing consideration/preference The range of options open to nabout the same Not analysed advertisers online has grown beyond COLUMN search and display. Overall growth in -.6 -.4 -.2 -.0 .2 .4 .6 .8 16% online ad spending was a stellar 66% in 2009 from the previous fiscal, ahead of any other medium, and sustained momentum is predicted for the future. Despite the positive trends, the medium still plays a peripheral role Tapping online poTenTial with the smallest share (4%) of the overall ad spending pie. Online ad spends will increase by 45% in the next fiscal. At least 84% What is intercepting mass adoption of the online medium 51% of the advertisers surveyed in the report have indicated that among marketers when a large chunk of its audience is they will increase spends in the online segment in fiscal 2011. Gaurav actively on it? marketers and agencies need to realize that Gupta, business head, utility vehicles and strategic planning, General while they were busy with Excel sheets, a lot changed. Take, Motors India, says: “Media and creative agencies have to sell the for example, branding. A decade back, branding was about power and potential of the online medium. Too much of focus on why spend on online ads? repetition. The agency develops a way to communicate the return-on-investment (ROI) takes away from the true potential of Maximum online ad spends were done to enhance website develop- marketers’ promise to customers and keeps hammering till it the medium.” ment, display and search modes. Spends on display ads accounted is stuck in their heads. Today, the goal for branding campaigns in the digital context means demonstrating to for 24% of overall spends. While consumer services are expected to audiences how the brand actively works with them for Television Print Radio contribute the maximum in fiscal 2011, the share of banking, financial optimal, individualized solutions. marketers across the globe services and insurance are likely to drop to 16% from 19% in 2009-10. are discovering that interactive tools and content that enable 18% 14% 24% Mohit Gupta, chief marketing officer of travel portal Makemytrip.com customers to search and research information about products 32% 47% 41% said: “Digital media has always been very important, especially since and services are becoming brand assets in their own right. a majority of our transactions happen on the website.” This clearly indicates that sooner or later online branding has 36% 44% 44% the potential to become the central marketing expression for nShare in fiscal 2010 nShare in fiscal 2011 (figures in %) organizations. In that case, every major advertiser today must re-evaluate their marketing spending, and that goes beyond Public relations Outdoor Online BFSI 19 shifting the budget from one medium to another. 16 In the coming years, the nature of the message is not going Consumer services 18 to look like a television commercial, print or even the classic 19% 24% 29% 27% 19 banner ad, however “rich” it maybe. It is going to provide 41% 51% IT/ITeS/Internet 13 functionality and a different kind of interface for the user to 13 act on something. With people spending endless amount of 40% 25% 44% Telecom 12 12 time in closed social environments, they wouldn’t want to be 9 interrupted; instead, they would seek to remain engaged and Durable goods want functionality that eases a task they are about to engage Events/exhibitions Newsletters/others Direct marketing 10 9 in. The role of advertising agencies, in collaboration with FMCG 10 publishers and technologists, to improve the value 16% 15% 30% 30% 4 proposition of online marketing becomes as crucial as a 39% Real estate 4 40% marketer’s belief in this medium to deliver appropriate 4 results. Auto 3 44% 46% 40% The Digital Media Outlook 2010 report attempts to find 3 answers to some of these questions and understand the Retail 3 rationale behind marketers’ allocation of ad spending while 3 Other emerging Media/entertainment 3 offering deep insights into their perception of the online Mobile marketing media 2 medium. Lifestyle goods 2 25% 22% 25% 2 38% Infrastructure 3 2 Pharma 2 38% 54% BFSI: banking, financial services and insurance; FMCG: fast-moving consumer goods, TG: target group; EDM: electronic direct mailers, IT/ITeS: information technology/IT-enabled services, CPC: cost per click, CTR: click through rate, CPA: cost per action, CPM: cost per impression Figures may not add up to 100% as they have been rounded off; viral ads are online ads that rely on the end user to create brand awareness by forwarding the ad via email or through social networking sites. Source: Webchutney

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