This document discusses online advertising spending trends in India. It notes that most advertisers use the internet for tactical purposes like increasing awareness, boosting leads and sales rather than customer engagement. It projects that online ad spending in India will increase 44% from 2009-2010 as more advertisers recognize the internet is where consumer attention has shifted, despite most money still being spent on traditional media like television and print. Currently, consumer goods companies have a lower online advertising profile.

1. C2 CAMPAIGN | MARKETING
&ADVERTISING mint mint MARKETING
&ADVERTISING | CAMPAIGN C3
TUESDAY, JUNE 30, 2009 WWW.LIVEMINT.COM
TUESDAY, JUNE 30, 2009 ° WWW.LIVEMINT.COM
¡
TUESDAY, JUNE 30, 2009 ¡WWW.LIVEMINT.COM
TUESDAY, JUNE 30, ° WWW.LIVEMINT.COM
FROM PAGE C1 ®
Loose connection
USING THE NET FOR TACTICAL PURPOSES
What makes advertisers include the Internet in their media
plans? In the report, 60% of the companies surveyed said one of
FUTURE COURSE
the main objectives of their online strategy was “increasing ONLINE AD SPENDING Projected ad spending for 2009-10
awareness” of their brand. For 56%, it was boosting leads, sales, TO INCREASE BY 44%
market share and customer base. In 2009­10, the overall advertising
Surprisingly, only 9% said they use the Internet to build expenditure by the top 445
customer satisfaction and engagement. “We use the Internet for Television
TELEVISION, PRINT GET Ad spending in 2008-09 advertisers is expected to fall by 2,273.44
CONSUMER GOODS SECTOR KEEPS LOWER PROFILE tactical purposes, but our money is still on traditional media. But 10%, from Rs5,163 crore in
THE BIGGEST CHUNKS that said, the Internet is where all the action is and our online
(48.9%)
Currently, the FMCG sector, consumer Ad spending by verticals 2008­2009 to around
Almost 82% of the advertisers surveyed
Television
(% share)
spends are much higher media budgetand even our investments
Rationale behind than last year, allocation (% share) Rs4,653 crore.
2,652.5 utilities and services, and consumer
allocated a share of their budgets to on this media are growing steadily," says Arvind Krishnan, 4.4
2.1
Spending share
(51.4%) durables, which account for 70% of the 100 Others
100
10.3 9
controller, marketing, Bacardi­Martini India Ltd.
Interestingly, though, their
Increase
(in Rs crore, % share)
Internet advertising, yet the share of 17 28 18.5 spending leads/ sales/ media is likely
on digital
total ad spending, make up just 30% of IT/ITeS/*** 25.3 market share/ Others
this medium in the total ad pie is a Internet 3 customers Print
the online ad expenditure. 6 12.4 43.2 28.6 37.6 to increase by 44%, from the 673.91
meagre 5%. 6 BFSI #
22
Lead generation
(14.5%) 1,194.68
(in Rs crore,
“Our brands will continue to invest current Rs278 crore to Rs399
6.1
% share) Consumer Brand strategy objectives
13.4 6.1 Build image/ (25.7%)
The report estimates that these in the digital medium as it presents a 16 10 Increase crore. If these advertisers continue
brand Internet
Others 23
services/
(% share of
advertisers spent Rs5,163.3 crore in Print utilities presence/ differentiation
to account for only two­thirds of 399.38
768.35 great opportunity to actively engage advertisers) 15.5 10 18.8 31.3 Radio
distribution (8.6%)
2008­09. Of this, only 5.4%, or around (14.9%) 1,415.44 Consumer 13.6 the total online spending, then the 111.57
Build brand
with consumers,” says Srikanth 22 durables channel awareness
Rs278 crore, was spent on the Internet. (27.4%) 17 online media industry may well
and recall (2.4%)
Radio Srinivasamadhavan, general manager, FMCG##
Television gets the biggest chunk of Increase Increase lead/ Build cross Rs625 crore in 2009­10.
Help create
48.81 (0.9%) media services, Hindustan Unilever 7 awareness sales/market image/ strong market
their advertising budgets, followed by Internet share/ brand/ 16% 9% presence
Ltd. “Our advertising spends are in line 60%
the print media at 27%. 278.15 (5.4%) 19 46.4 customers
43.2 46 differentiation
81.5 67 43.6 31.3 ###
with our intent to invest in this 33 Reach TG
0 56% 46% BFSI# SECTOR LIKELY TO CUT EXPENDITURE
and masses
medium and we expect that digital 6 All BFSI# Consumer Consumer Customer
FMCG## Internet/ Others
0
contribution will only increase in the companies durables services/ satisfaction/ IT/ITeS***
Total ad Internet ad
utilities engagement
It is estimated that the Growth in Internet ad spending by category
coming years.” spending spending
FMCG sector’s current (Rs crore)
Growth (%)
ONLY FOUR OUT OF 10 USE VIRAL MARKETING online spending of 150 2008-09 (actual)
around Rs16 crore will go 2009-10 (estimated)
70 33
According to the report, 82% of the advertisers surveyed are active on digital media, yet up to almost Rs72 crore
their usage of it varies. Of these companies, eight out of 10 have brand­specific websites, 100
USEFUL IN GENERATING LEADS in 2009­10, a 353% jump, 353
seven have used or are using display advertisements, and the same ratio develop and LIMITED IN ITS EFFICACY while information tech­ 19
Advertisers say online media helps generate leads and initiate -35
maintain promotional websites, and use social media websites. In addition, five out of 10 nology, or IT, and IT­ena­ 50
are experimenting with mobile advertising, but only four use viral marketing. Online media is perceived to be more effective in “driving traffic to a website”. quick responses from consumers, thereby making this platform a
While marketeers look at the Internet more from the lead generation perspective, bled services, or ITeS, 1
However, digital spending is not all about advertising. A quarter of the current digital preferred direct marketing tool rather than a medium of companies would contin­
marketing budget goes towards developing and maintaining brand­specific websites. the report notes that the companies surveyed feel that it is not as effective in marketing communication or brand building. 0
generating leads as some of the other conventional mediums. The good news is ue to spend consistently
Around 34% is being spent on advertising through display ads, viral ads and ad networks, “It is easy to track where BFSI# Consumer Consumer FMCG## IT/ITeS***/ Others
that they feel it is as adept as the other mediums in delivering in terms of brand Objective of using the Internet consumers are spending on the Internet, and are durables services/ Internet
and almost 13% of the spending is going towards social media initiatives, and 2% towards likely to increase their utilities
“awareness” and “consideration”. as an advertising medium time on the Internet because
mobile and other initiatives. (% share of advertisers) online budgets by almost 70%. However, the banking, financial services and insurance, or
“One can do interesting brand­building campaigns on the Internet, but this of the transparency in measurability BFSI, sector, one of the early adopters of digital marketing in India, is likely to cut expen­
Usage of digital marketing forms by advertisers medium lends itself to performance marketing because it is very measurable, ” tools such as cost­per­click or
Viral ads* (% share) says Gayatri Buddha, assistant vice­president, marketing and alliances, 43% diture by 35%, from Rs47 crore to Rs30 crore.
impressions, so while it does “We have been present online, but in the past year or so we have stepped up our mar­
38.8 5.9 55.3 MakeMyTrip India Pvt. Ltd, a travel portal. Lead generation/ eventually aid in (the) building of a
quick response/ keting initiatives on this platform because it helps us to reach out to the target audience
Mobile and others conversion brand, we find online media very for products specific to a certain age group and gender. For example, social media is a
Effectiveness of online ads
47.6 7.9 44.5 Attributes Degree of effectiveness effective in generating leads or good platform to reach college­going kids,” says Byas Anand, spokesperson, Dabur
0.6
EDM** directing traffic to our site or India Ltd, one of the largest consumer goods companies in India.
Driving traffic to a website
60 18.4 21.7 0.4
Selling Increase response to an ad,” says
Creating
products/ brand More effective awareness/ 26% Anisha Motwani, chief
Social media initiatives services awareness visibility/
0.2
brand building
marketing officer, new MOBILE ADVERTISING: PROMISING, NEEDS TRACKING
65.6 5.3 29.1 Same as other Increasing markets, Max New
0 consideration/
Developing/maintaining a promotional website preference York Life Insurance With advertisers
Drive traffic/engage
17% Growth in Internet ad spending by type of execution
68.6 15.8 15.6 -0.2 Co. Ltd. including mobile
people/easy (Rs crore)
Display ads Delivering promotions Driving Generating leads accessibility phone advertising in 100
2008-09 Growth (%)
-0.4 traffic to 25 2009-10
69.6 13.5 a store Less effective 9% their media plans, it is
16.9 Cost effective
going to be big this
Ad networks -0.6 75
-0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 year, says the report. 61 37
80.9 2.7 16.4 Note: The nearer the degree of effectiveness is to an attribute, the more strongly it is associated with that attribute as Effective in targeting youth 5%
compared with the other attributes. Mobile advertising is 43
50
Developing/maintaining a brand-specific website likely to increase from -3 11 615
83.9 13.1 3 its current minuscule 91
25
share of 2% of the
0 Ever used/using currently Planning to use in the next three months Not sure when Base: 365 100
BIGGEST DECISION DRIVER: TARGETED REACH overall digital spend­
ing to 9%. 0
2 Brand Display Ad Viral
5
Digital ad spending distribution Ad spending by verticals
Most marketeers in India still use the Internet only to exploit Rationale behind media budget allocation (% share)
“The ecosystem for websites ads networks ads*
(% share) Promotional EDMs** Social Mobile
its ability to deliver selective and targeted reach. The 2.1 4.4 the past few years websites media
Developing/maintaining a brand-specific website 100 100 Increase
Others
rationale provided by marketeers across verticals makes it 9 has been very nascent
12 17 28 10.3 leads/ sales/
26 Ad networks 18.5
IT/ITeS/***
evident that they are completely driven by reaching the 25.3 market share/ for the mobile advertising industry. Only now are you able to see mobile advertising
Internet 3 customers
Display ads 6 12.4 43.2 28.6 37.6
Share of target audience or building awareness, says the report. It is
BFSI# Lead generation companies or networks go to brands and agencies, and offer solutions that go beyond
Developing/maintaining a promotional website 6 22 6.1
13 spending this myopic view which is responsible for Internet’s small 13.4 Build image/ just voice,” says Kunal Bajaj, managing director, BDA Connect Pvt. Ltd, a telecom strate­
(in %)
Consumer 6.1
Social media initiatives
share in the total16 pie, it says. 23
ad services/
Some marketeers, however,
utilities
10 brand
differentiation
gy consulting firm and co­chair of Mobile Marketing Association of India. “2009 is a
15 EDM** have begun to see the other advantages of Consumer
the medium and 15.5 10 18.8 31.3 major step in the right direction for mobile advertising. However, a proper system for
13.6 Build brand
Mobile and others 22
are gravitating towards it gradually. durables awareness measurement and tracking needs to be in place first before the industry really takes off.”
13 17
Viral ads* and recall
14 Base: 365 “The digital space gives brand marketeers a great
FMCG## The next most promising area may be viral ads, which is likely to almost double its
Help create
7
opportunity to engage the audience for relevant product strong market share in the overall online ad spending pie.
presence
categories. Hence Internet, as well as mobile, become GRAPHICS BY AHMED RAZA KHAN/MINT
19 46.4 43.2 46 81.5 67 43.6 31.3
33
primary mediums of communication and engagement for Reach TG###
0 and masses
To read the full Digital Media Outlook 2009 report, log on to
Figures may not add up to 100% because they have been rounded off relevant0categories,” says Chandrasekar Radhakrishnan,
6 All BFSI# Consumer Consumer FMCG## Internet/ Others www.livemint.com/digitaloutlook.htm
The findings are based on the responses of 445 advertisers, except where stated otherwise companies durables services/ IT/ITeS***
Total ad Internet ad
head, brand and media, Bharti Airtel Ltd.
#BFSI: Banking, financial services and insurance; ##FMCG: Fast moving consumer goods; ###TG: Target group; **EDM: Electronic direct
spending spending utilities www.livemint.com
mailers; ***IT/ITeS: Information technology/IT­enabled services
*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