Digitally speaking

Online advertising, which has seen a year-on-year growth of around 21% over the last five years, is arguably the most cost-effective way to reach audiences in India, particularly the younger and more affluent population. Users have maintained their time spent on the internet over the last year, and growth is especially pronounced on social networking sites — where Google’s Orkut and Facebook are among the market leaders — to complement use of email, search and portals. Online advertising is expected to account for Rs1,800 crore in revenues by 2015, according to MAGNA global advertising forecast report 2009-10. With its low costs, cost per action (CPA) models have ushered in the use of ad networks in internet advertising. Emerging mobile internet access technologies will accelerate this growth. Three digital media experts look through the crystal ball to bring you the future.

Revenue model is still questionable
Like in developed media and entertainment markets, India, too, is witnessing a trend to access online videos. A recent online survey conducted by Nielsen, captured the growing interest in online videos among Indians — of the estimated 45 million internet subscribers in India, nearly 63% either stream or download content on a computer or a portable device.

According to estimates, the online video advertising industry is currently generating revenues of Rs 40-60 crore, and is expected to touch Rs 200 crore by 2012. However, the ticket sizes are small, and the performance-based payment legacy is flowing to video advertising as well. This restricts actual expenditure to about Rs 8-12 crore.

The catalysts for this growth in online video advertising would include the impending licensing of 3G and WiMAX, which can open up the market for online videos on mobiles.
The use of online videos is a highly cost-effective way to reach diasporas across geographies. Globally, brands have started shifting their budgets from traditional media to the online world.

As media channels continue to fragment and emerging content platforms mature, advertisers will gradually begin to understand the implications of consumer video behaviour and realise the potential of online video. As PC penetration improves, bandwidth costs will come down as economies of scale set in, providing impetus to the demand side.

However infrastructure-related concerns, such as lack of PC penetration and low penetration/ high cost of broadband internet, pose challenges for this segment. The bandwidth cost for serving a video is also very high.

Providers will have to incur heavy expenditure on the serving end to ensure the high-quality delivery of video content to their end users.

Further, both advertisers and content owners such are yet to realise the full potential of online video. TV content owners are still grappling with concerns such as protecting copyrights for allowing aggregators to host their content. Advertisers on the other hand, still doubt the efficacy of the medium. The medium, although advanced, lacks standard metrics required to measure campaign effectiveness. The exclusivity of content seems to be limited too.

While the progression of viewership preferences to an interactive platform such as online video is inevitable, the revenue model is still questionable. The following emerging trends can shape the future:

Disaggregating videos: Content that was previously tied to a portal is now being embedded across sites and is disaggregated to wherever audiences confluence.
As such, video views are very different from site traffic or a page view that forces media owners and advertisers alike to rethink their marketing expenditure.
Mobile and micro monetisation: While the internet platform is growing rapidly, its monetisation in developing economies is limited. Mobile, on the other hand, blends well to subscription, downloads and other monetisation models.

Examples are downloading online videos to mobiles or call-to-action message overlays on a video. This can lead to newer revenue models, where micropayments are collected over a large audience base.

In-video placements: As audience aversion to intrusive advertising grows, brand messages will have to be seamlessly embedded with content. While the avenues for such integration are limited for traditional media, online videos offer endless customisable opportunities. The low-cost and potential viral spread would popularise embedded video advertising.
Although, only time will determine the commercial success of this medium.
— Raghav Anand
(The writer is the segment champion for mobile entertainment at Ernst & Young’s Media & Entertainment Practice. Views expressed are personal)

Agencies must gear up for new role
It is now essential that digital agencies start talking the brand language and be true partners in helping companies build their brand in the digital space. The role change needs to happen from being the so-called tech players or enablers to brand champions.
Digital agencies need to understand why this transformation is necessary and how this would take place gradually. They need to look into
a) Role of agencies in brand building
b) Delivering extraordinary consumer experiences
c) How to evangelise the medium for better brand value
d) How to maximise return on investment in times of recession.

I have been for all my career been a brick and mortar person in brand building and communication business thereof. Digital entered horizons of people like me only in the last 6/7 years and mostly was used as an add-on or a supplementary to the core communication delivery means. However digital media, today has become a “key” means if not sometimes the “core” in the brand building process.

I have been very fascinated by the Gillette India’s campaign India Votes: To Shave or Not, — a case study of using social media. It is now doing rounds on the international circuit, with it getting a big reception in the CM Summit.

According to a presentation given by Lucas Watson, global team leader for Procter & Gamble’s digital business strategy, at the CM Summit in New York, the Cincinnati-based firm used a “mix of paid media, earned media and social elements all working together” to grow sales.

The social angle was when the company created a Facebook page that allowed consumers to discuss these findings, based on the idea that to “debate, discuss and argue is in the blood of Indians. According to Watson it received a stupendous response… and further iterated that “it was adding the social mix that unlocked the value add”.

Again the results were mighty impressive, after 10 years of stagnation, the campaign set all time sales records with a sales increase of 38%. Awareness doubled. Trials increased by 400% and Gillette’s market share increased by 35%.

To conclude what we need with our clients today are:
a) Get them to go beyond “experimenting with Digital”! Please stop pushing “innovations” and trivialise the power of the medium and the intent of the communication
n Invest with conviction. And that conviction can only come when digital agencies put their money where their mouth is. How? By committing to empiricalise consumer results. Then you have client committed, results committed & measurements committed. This is serious commitment.
b) Use digital for what it is! Consumer connect, consumer conversations, consumer feedback, consumer sharing … etc … When we attempt to dovetail digital onto the mainline campaign - we take away from the strength of digital as a medium. So if i-phone could launch without a so-called mainline campaign & become a world-beater - that is the ideal that need to be chasing. In trying to play the smart, younger brother to mainline - digital only ends up dwarfing its deliveries!
c) Last, most of the times - digital does not have an independent idea of its own. We learnt in the ‘90s - that TV had to be written as TV … not an A/V adapt of a Press Idea. In digital the same applies.
— Ruchira Raina
(The writer is managing director, Dentsu Communications and Dentsu Media)

Banner-led plans OUT, digital media plans IN
The genesis of the internet has radically enhanced communication and the availability of information to the end user.

The evolution has been swift and the progressive trend shows no signs of slowing down just yet.

Similarly, evolving in tandem is the marketing possibilities on this virtual platform. What started off as basic online ads that were nothing more than digitised billboards have now grown into a gamut of available options like innovations, search marketing, social media etc.

With global trends indicating continuing decline of ad spends in traditional media, the “interest” and “investments” on the digital platform by advertisers seems to be steadily increasing.

In a country with a one billion population, a user base of 52 million net users may seem small when compared to penetration in mediums like print & TV. Nevertheless the picture completely changes when you go beyond the number of users and look at the quality of the audience present online.

Today we have 30 million WAP (wireless application protocol) users in India, 25 million unique users of Facebook and Orkut alone, zillions of Indian bloggers, MMORPG (massively multiplayer online role playing game) gamers and many more individuals and groups making their mark on the web space in their own unique way. Thus, the paradigm shift in 2010 will be using the power of browsing in a bigger, more diverse way to connect with an evolved audience on a dynamic platform.

The key expectation for digital media in 2009-10, will be the increase in “brand awareness campaigns” through rich media, contextual advertising and WAP.

The Internet and Mobile Association of India (IAMAI) projects a 32% growth in online banner adspends, and the overall digital advertising pie is expected to reach a healthy Rs625 crore by the end of 2009-10 fiscal.

While advertisers will continue to perceive digital media as the new born baby and put merely 5-10% on it, the trend of including a digital component in every “marketing plan” will become more prevalent to a point where it will be indispensable.

Furthermore within digital, there will be a significant split between display ads (60%), search marketing (20%), ad networks(10%), social media(5%) and new digital media avenues like augmented reality (5%).

Thus the traditionally boring and CTR (click through rate) driven, banner led online plan will become a robust “Digital Media Plan” that will aim to reach the daily touch points of our target audience not merely by enhancing a brand’s visibility but by tantalising users with innovative campaigns that are possible solely on the digital platform.
— Saurav Chakraborty
(The writer is associate general manager, R K SWAMY BBDO Digital Direction)