Wednesday, February 10, 2010

India digital advertising 2009 - Not all was doom & gloom

In times of crisis and recession, it is only obvious that advertisers will want to make every penny spent on advertisement count. Internet lends itself very well here. It is the only medium that on one hand can deliver against ROI objectives of the advertisers, since the medium is truly capable of specific measurement in terms of ‘cost of acquiring a customer’ or ‘cost of generating a transaction’. Advertisers can use internet as a direct response medium, a medium where they can actually specify their objectives in terms of cost per acquired customer. On the other hand being an interactive medium Internet can provide a really immersive brand engagement with the user.
However, it is a pity that advertisers in India have still not exploited the true potential of Internet. Digital media in India has not got its due despite being present for over a decade in India. There has been no growth in terms of advertising spends per user during the decade. The following table & chart highlight this fact:


Source: Zenith Optimedia & Internet World Stats

The above charts clearly show that in 2009 the ad spend per user in India have remained almost the same at an abysmal $ 1.3 up from $ 1.2 in 2000, though during this period the number of internet users have gone up 14 times.  There is a lot of catching up that Indian digital media has to do with other parts of the world.
Not everything in 2009 was doom and gloom as far as Digital advertising is concerned. Categories that continued using internet were Travel, Finance and Online classified businesses. Categories that significantly increased the share of digital in their overall mix were Automobiles & Consumer Electronics. Emerging categories include Education & Real Estate. We would like to see FMCG & Retail advertise more on the internet.

A significant trend that really scaled up in India was Social Media. Following interesting facts emerge as per Alexa & Vizisense:

Orkut & Facebook : 4th & 5th most visited sites. Facebook claims to have 5.7 Million users in India.
Twitter: 12th most visited site
Linkedin: 14th rank

In addition to the above, take a look at the ranking in terms of users of User Generated Content sites: – 6th visited site
You Tube: - 7th
Wordpress: 15th

What the above simply means is that 7 out of top 20 sites Indian internet users are visiting are in the arena of social media. 4 out of top 20 most visited sites in India are social networking sites. I would estimate that more than 70% people who are online are engaging with social media on some or the other platform (site).

One can argue that these are quantitative numbers, what about quality? Advertisers look for certain demographics whilst targeting their communication messages.  Hence it is important to also see what kind of people are a part of this social media fraternity. Let us look at the demographics of users of Facebook (source: Vizisense). Almost 50% of Facebook users have income over 2 lacs / annum and more than half of the users are above 24 years of age. 63% users are graduates & above.

Audience demographics of - a business networking website is even better. Close to 60% users have an annual income of more than 2 lacs and close to 80% users are graduates and above.

This reinforces the point that not only there is a substantial number of users visiting various social media sites but they are also relatively well educated and well to do – exactly the kind of Audience that most of the brands & marketers will want to address. I would go a step ahead and say that after bollywood and cricket, the only other thing than has the potential of truly binding Indians is social networking!

Advertisers need to understand that it is also only a matter of time that the younger generation who is growing with internet will be difficult to find anywhere but on the web, as these people are shunning consumption of the traditional / offline media and are spending disproportionate time on the Internet. This phenomenon can already be witnessed across the world.

I believe that at 50 million users Internet is no longer a niche medium and the advertisers need to start allocating proportionate monies to internet in their overall marketing plans rather than allocating some small percentages.

The above article published in


SEO Delhi said...

Nice post.. Online Advertising in India is growing but I still feel most of the marketers of top Indian corporations are still not fond of advertising/marketing through the Internet.

Srinivas Tentu said...

Wonderful article. Whether anyone accepts it or not - INTERNET IS THE FUTURE - Internet is going to have a huge impact on the way we do business in future.
This blog is one of the best i've come across in India. Articles are so informative and everyone interested in online business should read this blog.
Thank you.

Srinivas Tentu said...

Just Wonderful article - it shows the future of online business.
thank you.