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This report is a first of its kind. Never That's probably more than there are on
before in India or indeed in any other all TV channels. Consider these
geography in the world that we know of numbers - over 1 bill ion searches a
has anybody used technology to this month, over 300 mill ion searches with
extent to discern knowledge about the ads on them, almost 5 million clicks onsearch engine marketing business. ads every month. Search marketing has
come of age in India.The first thing to say is that this report
is an estimate. We did not get any data Some highlights: Rs. 230 crores of ad
from the search engines (who are spend on this media is aimed at
famously quiet about disclosing their Indians alone. Of this, about a third,
numbers anyway) or the advertisers over Rs. 70 crores is spent by Indian
(who like to be just as quiet). What we companies. For an industry that barely
did was analyse all data that was in the got off the ground a couple of years
public domain by running searches, ago, it's a huge leap.
noting the presence of ads byThere are three types of spending onadvertisers, assigning a value to thosesearch: 1. Indian companies spendingads from experience, and making somein India. 2. Overseas companiesrather involved calculations. In effect wespending in India and 3. Indiandid the online equivalent of what acompanies spending overseas. We'veTV Ad Index or media auditor does.restricted ourselves to the first two
We checked the results against some categories and this report is about
real-life data, and were comfortable Indian companies aiming at Indians.
with the findings.We also defined Indian company
There is more than one reason why spending in India not as a company of
these are just estimates. Apart from the Indian origin, but as a one with
reluctance of the engines and the operations here. Our assumption is that
advertisers to talk numbers, there is the there is local involvement in all spendissue of mathematical approximation. aimed here. Hence, eBay.in counts as a
We are aware of the extent of local company while eBay.au, also
assumptions here, and have tried to advertising to Indian surfers, does not.
restrict their effect to a minimum.A note of thanks. An enterprise of this
Third, most search practitioners will scale wouldn't have been possible
know that if you've been advertising for without the help of some very smart
a while, you have the benefit of history people. A big hand to Dr. V. Vinay,
where you get a higher rank for the price Pinstorm's technology guru (with flowing
you pay compared to what a new locks to match) who wrote much of the
entrant would pay today. Our prices code and algorithms to make these
reflect what today's costs are as calculations possible. A doff of the hatopposed to what you paid when you got to Akshay Surve, Ansoo Gupta, Hanisha
in. If you feel your spend here is Vaswani, Harish TM, Indrojit Chaudhuri,
overstated, that's probably the reason. Milan Zaveri, Netra Parikh, Nikhil Sheth,
Ratan KK and Reshma Nayak - some ofThe best way to use this report is to the other Pinstormers who temporarilynot be fixated on absolute numbers, gave up sleep and sanity to make thisbut on relat ive comparisons. That's report happen. And to the redoubtablewhere there are lessons to be learned. Subho Ray of the IAMAI, Doc, heres to
making history together!But first look at the industry! It's grown
from nowhere to have over 40,000Mahesh Murthy, CEO, Pinstormadvertisers targeting Indian web users.
What To ExpectFrom This Report.And What Not To.
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Methodology:How This Report
Was Created Google is one of the more secretive 5. We then used the same keywords,companies on the planet. Till and ran them in the search engine's
September 2006, it was the primary traffic estimator. We obtained an
search engine that allowed pay-per-click estimation of clicks, figured an
advertising to marketers aiming at estimation of cost and also an
Indian audiences. It was an uphill task estimation of search volume through
to find the scope and scale of the Indian a unique process.
search advertising industry, given that6. We applied some interestingthere was little help forthcoming from
mathematical functions to estimatethe source.what each advertiser was paying in
Things on the Internet however can be each position for their ad on that
seen and measure, so that 's exactly keyword.
what Pinstorm did. To clarify again, none7. We then collated over 2 million linesof the numbers here are in any way
of data, and presented it in a formprovided by or a representation fromthat made sense to us ordinaryGoogle or any other search engine.mortals, and not just to Ph.D.s inThese are all estimates derived fromComputer Science.publicly-available data.
8. We checked out the data against ourFurther, this report represents aown experience. We called a couplesnapshot in time: August 2006. If yourof other advertisers and litmus-testedcampaigns ended or started after thisit by them. Each said, hmm, thatdate, you wont find them representeddoesnt sound too wrong.here. Weve taken data for this month
and extrapolated for the year.
So, here we are, many nights, manycups of Barista coffee, Punjab SweetSpecifically, here's what we did:House samosas and Snack Shack sali
1. Pinstorm created a long tail of over botis, many lines of code and charts on
461,000 keywords across various Excel later.
industry segments that were relevantLadies and Gentlemen, the report.to Indian web users.
2. We ran searches on these keywords.
3. We noted every single ad that was
displayed, by every single advertiser,in every single position, across all
these 461,000 keywords.
4. At the end of this effort, we had
counted over 2 million ads placed by
over 41,000 advertisers. Now we
knew which advertiser had bought
what keywords and what positions
they were on.
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Searches by Indians every month Over 1 billion
Searches by Indians that result in sponsored links
shown, every month 308 million
Total clicks on sponsored links by Indian users
in a month Over 4.8 million
Number of advertisers targeting Indian web users: Over 40,000
Total annualized spend by all advertisers
targeting Indian users Rs. 236 crores (US$52m)
Total annualized spend by Indian advertisers
targeting Indian users Rs. 72 crores (US$16m)
Most amount spent by one advertiser Rs.9.7 crores (US$2.2 m)
All brands that spend more than
Rs. 10 lakhs a year in India 291
Indian brands that spend more than
Rs. 10 lakhs a year in India 90
Average number of keywords bought by a brand 42
Most keywords bought by a brand 89,377
Most clicks bought by a brand in a month 599,968
Average cost per click paid by advertiser in India Rs. 16.20 ($0.36)
Highest cost per click paid by advertiser in India Rs. 266 ($5.92)
Average search campaign click-through rate 0.62%
Search Marketing:The Big Picture
Thee IAMAI estimatesthat there were 37minternet users in India inSeptember 2006.
This is expected to growto 42m by March 2007and 52m by March2008.
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Search Marketing:The Key Sectors
Sect ors among t op 292 advert isers Est . annualised spend
Automotive INR 10,321,020
Banking, Financial Services INR 145,039,410
Dating, Matrimonial INR 31,681,530Education INR 24,571,674
General online INR 227,842,308
Jobs INR 175,270,878
Media INR 41,113,170
Made-for-Adsense INR 155,725,416
NGO INR 11,697,696
Property INR 25,517,916
Retail, e-commerce INR 189,679,644
Technology INR 116,153,190
Travel INR 173,650,230
Search Engine Marketingworld wide cross theUS$ 10 bn mark in 2006and is on its way to hitUS$ 23 bn by 2010.
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Top Indian advertisers Est. annualised spend
Citibank INR 27,201,096
HSBC INR 11,978,280
ICICI Bank INR 9,216,828
ICICI Direct INR 7,631,820
SITM India INR 7,058,826
Sharekhan INR 6,413,742
ICICI Lombard INR 3,947,778
Tata Mutual Fund INR 3,443,472
IDBI Paisa Builder INR 3,089,016
HDFC Bank INR 1,927,152
HDFC Insurance INR 1,072,440
Sector: Banking &Financial Services
Est. annualised spend, in Rs.
Delhi is more expensivethan Bangalore, which ismore expensive thanMumbai. But only insearch marketing terms.
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Citifinancials
HSBC
Citibank
ICICI Direct
SITM India
Sharekhan
ICICI Bank
ICICI Lombard
ICICI Bank Credit Cards
Tata Mutual Funds
Share of spend,share of searches,share of clicksBanking & Financial Services
Keyword Port folioKeyword Port folio
07
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Est. Click Through Rates (%)
Est. Cost Per Click (Rs.)
Sector: Banking &Financial Services
08
How does one reachshare traders?Sharekhan advertises inGujarati on Englishsearch results.
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HSBC520
Both720
Citifinancials1710
ICICI Bank1021
Both288
Citifinancials2124
Sharekhan4451
Both1241
ICICI Bank1379
Keyword Coverage
How many keywords areenough? You can neverhave too many keywords.Search engines recentlyannounced that almosthalf of their searchqueries have never beenasked before - you needto keep adding to yourpile of keywords, just tokeep up to date.
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Est. Click Through Rates (%)
Sector: Travel
Top Indian Advertisers : Estimated annualised spend (Rs.)
Over 85% of allindividual travel nowstarts first from the tripto the web.
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Est. Cost Per Click (Rs.)
Keyword PortfolioKeyword Portfolio
Sector: Travel
Travel sites routinely buyand deploy over 3 millionkeywords each on searchmarketing campaigns.
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Yahoo Travel16308
Both7064
Makemytrip16332
Keyword Coverage
IndiatimesHolidays
437
Both423
Makemytrip22973
Long phrases convertbetter. Someone lookingfor Sea view hotel roomin Bombay is making amore precise and lessexpensive request withsomebody just asking fora hotel room
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Sector: Jobs
Top Indian Advertisers : Estimated annualised spend (Rs. in Lacs)
Est. Click Through Rates (%)
Its not just job portalsthat use searchmarketing. Companiesnow directly reach out tocandidates by usingsearch engines.
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Est. Cost Per Click (Rs.)
Keyword Portfolio(in t housands)Keyword Portfolio(in t housands)
Sector: Jobs
14
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Monster25242
Both38648
Naukri26272
Naukri50563
Yahoo Jobs2603
Both14357
Keyword Coverage
An interesting way to findcandidates using searchis by using keywords thatreflect their passions.Putting an ad on thekeyword fraunhofercodec is likely to net youand audio engineer.
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Sector:Technology Top Indian Advertisers : Estimated annualised spend (Rs.)
Why are tech companiessuch big ad buyers onthe web? Because theirconsumers first go online
to do some researchbefore they make apurchase decision.
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Est. Cost Per Click (Rs.)
Dell
5685
Both
1582
HP
7387
Sector:Technology
Todays marketers don'task Can I reach mycustomer? They askinstead Can i be found
when my customer issearching for me?
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Sector: Retail
Top Indian Advertisers : Estimated annualised spend (Rs. in Lacs)
Est. Cost Per Click (Rs.)
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Future Bazaar254
Both316
eBay50312
Fabmall1304
Both380
eBay49932
Sector: Retail
Pinstorm Search Maximiser Index
What is Pinstorm SearchMaximiser Index?
Our way of measuring if acampaign is over / underperforming. To do this, we
compare the clients share ofspend with his share ofsearches. For eg if Client X hasa share of spend of 20% and ashare of searches of 10% thenthe campaign is likely to get ascore of -1 to 0. If however,the campaign is more thanpulling its own weight and hasa 20% share of spend against30% share of searches, thiswill give the campaign a
positive PSMI value of 0 to +1.An average performingcampaign scores a zero.Under performing ones getscores close to -1.Outstanding ones score closeto +1.
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Sector: Dating &Matrimony Top Indian Advertisers : Estimated annualised spend (Rs.)
Pinstorm Search Maximiser Index
Think of the web as asingles bar of the 21stcentury. A far safer placeto meet your match.
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BharatMatrimony
5022
Both5939
Shaadi4575
JeevanSaathi18081
Both8676
Shaadi1838
Sector: Dating &Matrimony
Marriage is big businessonline. The newgeneration of Indians isturning to the net to findtheir spousesthemselves.
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Sector: GeneralAdvertisers Top Indian Advertisers : Estimated annualised spend (Rs.)
Pinstorm Search Maximiser Index
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Yahoo5913
Both38
Google6052
Keyword Coverage
Both79Yahoo5766 Sulekha5872
Some of the biggestadvertisers online arethe big portals. Hoping toattract traffic that stayswith them so that theydon't need to buy paidsearch the 2nd timearound.
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An Introductionto Search Engines
And Ranking Contrary to popular belief, Google did Depending on how you've set yournot invent the search engine. preferences, you might be seeing
anything from 10 results (mostSearch was first deployed by a site common) to 100 results per page.
called Altavista, more to demonstratethe power of its parent company
Digital's computer servers. Now that theSo it's really these top 10, 20 or 100web is estimated to be in excess of 100results that matter to the user. Andbillion pages: more than 16 pages forevery engine uses a dif ferent algorithmeach man, woman and child alive, it isor ranking formula to arrive at how toessential to have an easy mechanism topick and rank these top 10 or 100categorise pages so they can be foundresults. And their ranking formulae areby users looking for it .closely-guarded secrets.
What a search engine basically does is
From an advertiser's point of view, if youto crawl or spider through the pages market a hotel in Bombay then youon a site and note all the words used inwould WANT to be found on the firstthe copy. Search engines are yet topage of results. Is this easy?understand pictures, though they can
read and remember tags that areAre you a high-ranker?
attached to pictures. The engines then
remember the content and location of When businesses figured out thatthese pages on the world wide web. revenues depended on being ranked
highly by a search engine, an entireFor instance, a search for hotel room in
industry called search engineBombay returned 5,750,000 results on
optimization (SEO) was born.Google, 1,270,000 results on Yahooand 228,004 results on MSN in In the early days, it was easy to gameSeptember 2006. or fool a search engine spider that
indexed your site. You stuffed yourWith millions of result pages to choose
pages with words like sex and Pamelafrom, it is likely any of these engines will
Anderson in a small font, in whitehave the information you want. The real
against a white background, visible toissue is however different.
the search engine but not to the user
and you'd get ranked high when a userForget Page 3. Be on Page 1.searched for those words.
No human being is likely to sift throughThe engines have since becomeall of these results. In fact, researchsmarter and started downgrading sitesindicates that very few go past the firstthat try to game them. It's now a cat-page of results.and-mouse game to optimize a site to
So the search results that are crit ical rank higher in a search engine.
are not the millions spidered but those
that are displayed on the f irst page.
Results 1-100 of about 19,160,000,000
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Larry and his rank (Even today, a Page Rank, or PR as it's
referred to is described by Google forThe first breakthrough in ranking came many of the web's sites on a scale of 0from a researcher at Stanford named to 10. For instance, Indiatimes and
Larry Page. Larry and his partner, Rediff have a PR of 7, Yahoo a PR of 9Sergey Brin's thesis was about the and Google gives itself a PR of 10.)concept of reputation ranking rating a
web page not by the frequency of words This innovation: reputation ranking -
on the page but by the reputation of gave better search results for the end-
the part icular site. user. And Google quickly became the
worlds search engine of choice,In effect they followed the very human displacing giants like Yahoo who hadbelief that a person's reputation was started out in search years earlier.dependent on the reputation of the
people who endorsed him. On the web, This has made it much harder for
Page's and Brin's work was to measure websites to feature on the left-hand sidea site's reputation by seeing the or organic side. Especially when a site
reputation of wants to be
those who linked featured for many
to it. which was different search
dependent on terms. To
who linked to continue the
them and so hotel example
forth. In effect, the Marketing
your site's Manager might
reputation, or be lucky to be
Page Rank was listed in the
the sum of organic results
reputations of other sites that linked to for luxury hotel Bombay but might not
you. make the top 100 list for hotel rooms
Mumbai. Or vice versa.For instance, if there were two hotels in
Bombay but one of them was written up For all these reasons, there needed to
about in and had a link from the New be a quicker, more reliable way to get on
York Times site and the other didn't, it to the first page of search results for all
was likely that the former had a higher the terms you want to be on.
Page Rank than the latter and hence
turned up higher in the natural (also
called organic) search results.
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Buy Your WayTo Page 1:
Search EngineMarketing
Again, it wasn't Google that pioneered Most accomplished marketers now
the placement of ads on search result deploy a combination of both search
pages. Overture had done so years engine optimization on a few keywords
earlier. and paid search also called Search
Engine Marketing - across the mainThe innovation was simple: to allow brief.advertisers to buy sponsored links on
the results pages of words searched by Search Engine Marketing is now a
web users. The links are cleverly US$14 billion business (Rs. 63,000
designed to look like search results and crores). Over 99% of Google's revenues
research shows that many users don't come from selling ads - and it has
distinguish between the results on the quickly overtaken online display
left-hand side and the sponsored links advertising as the most preferred route
on the right-hand side of the page. for advertisers online.
Pinstorm studies show that between 5% Why is search marketing so hot?to 40% of users on any search term
typically click on the sponsored links
instead of the organic or natural
results. With search volumes reaching
into the billions a month, this is not an
insignificant number.
Sponsored Links Sponsored Links
Tropicana ResortRelax in peace and tranquility away
from Mumbais congested city life.
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Most marketers have a well-defined Unfortunately, your newspaper or TV has
target group. Their media agencies no idea whether you're in the market for
prepare a media plan to address this a new product now. They show you ads
group. Given the fragmented nature of regardless of where in the buying cycle
media, no plan can address this group you are. This causes what we call
fully so every plan results in two FREQUENCY WASTAGE - getting the right
inefficiencies: audience at the wrong time.
i. Not reaching a part of the audience Search makes a huge difference here.
you want to reach. First, the ads are targeted only through
the words the users are searching forii. Reaching an audience that you did and you can choose the exact set of
not want to reach. search words to have your advertise-
ment appear on. So there is lit tle or noBoth contribute to what we call REACH
reach wastage.
WASTAGE. Search makes its first impacthere. Second, the advertisement is shown
right at the moment and on the pageThink of every search by any web user
that the user is making the search soan aspect of consumer demand felt by
there is no frequency wastage either.that user. So if she's looking for fashion
sale or apartment in Barcelona or Iyer To advertisers, search comes closest togroom, these are all representative of delivering the holy grail of targeting:her needs or demands now. getting only the exact target audience
as determined by their search andA marketer's dream is to synchronise
demand patterns and getting them onlytheir advertisements with a consumer's
at the time they're looking for informa-demand. Let's say you're sellingtion and choices to make a buying
Mercedes Benz. You really don't want todecision.
target a customer who just bought one
or bought the competition a month ago This is one reason why search hasas they're not l ikely to be in the market outstripped every other advertisingfor a new car now. medium in human history. And why it
continues to grow at 35% a year.
Search Marketing:The Holy Grail:Right Audience,Right Time
Unreachedaudience
Reachwastage
People lookingto buy now
FrequencyWastage
People lookingto buy now
Reachedthrough search
Zerowastage
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How SearchMarketing
Works: All AboutClicks And Bids.
Search engines aggregate audiences clicks a day, and your rival is bidding at
that are pin-point addressable by their $1 a click and getting 12 clicks a day,
search patterns at the time they're you are generating $15 a day for Google
searching. while he generates $12 so your ad will
be promoted above his.Search engines then turn around and
sell these audiences to marketers. The This is further complicated by Google's
most common way is through the click. automated measurement of landing
A click on your ad on a search result page quality. Google spiders the page
page takes a user away from the search you intend to send users to and gives a
result and on to your page and this preference to actual fully-built sites with
click is what you pay for. good PR instead of single-orphan-page
landing sites with just a form. So if yourSearch engines charge on a pay-per- landing page is more useful to theclick basis. user, you get a preference over a blank
page with a form that your rival has.Compared to traditional media, which
charges by the eyeball or the viewer, The third differentiator is history or thesearch takes it a step further - to charge incumbent advantage if you'veby the person who has shown interest in historically been performing at ayour offering by leaving the search particular position, then Google givesresult page and coming to your web site. you an advantage over a Johnny-come-In the AIDA process search gets beyond lately who has to outspend you on theAwareness, and to someone who same keywords to even come up to theshows Interest. levels you are at.
Now to the ads on a search result page. This process of bidding has been aTypically the first ad gets more clicks boon for search engines getting themthan the second, which gets more than huge revenue growth and it has allowed
the third and so on. companies to get the positions theywant on the search terms they want, by
Instead of setting a flat-fee per click orsimply out-bidding the competit ion.
per position, the big difference was to
free float the price per click to a Typically, bidding starts at US$0.05 permarket bidding process. So if Hotel X, click and goes up from there. Per-clickHotel Y and Hotel Z all wanted their bids of up to US$50 have been seen onsponsored links to appear on a search some search terms from somefor hotel room in Bombay, the search geographies.engine basically says it's up to you guys
- I'll put whoever offers me most per With this huge range of bids (a 1000x
click on top. difference between the top and the
bottom of the range) it is important for aThe truth is a litt le more complex, search advertiser to keep tight controlinvolving click-through rates and landing on what they're paying for.page quality, but this explanation is
broadly correct. Because the price for an ad is not set by
the medium but by your competition, itTo make it more accurate, three more is easy to overspend. Hence it is criticalfactors play a role in determining your for an advertiser to find search termsposition among the sponsored links. that are relevant to their consumers butThe actual number of clicks you that other advertisers have notgenerate is one. For instance if you're discovered yet.bidding at $0.50 a click and getting 30
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Doing SearchRight: Catching
The Tiger ByThe Long Tail.
There are several problems with the they make more money for less effort by
execution of a long tail strategy. The buying one word at $5 a click than for
first is that it is not easy to come up with buying 100 words for $1 a click or
undiscovered gems - the keywords that 9,000 words for $0.05 a click.
your competition has not discovered yet.The traditional advertising system ofSome companies, like Pinstorm in India,commissions for media spends finds itRavenswood in the US and Incubeta inhard to keep pace with these demandsSouth Africa have developed customfrom advertisers who want increasinglytools to generate these search termslower costs per click in an environmentand each have in-house keywordwhere keyword costs are rising.databases well in excess of 10 million
keywords.Some search specialist firms have
moved to a pay-for-performance model,Today's key advertisers and searchwhere they offer a flat price to the clientspecialist agencies realize that the long
for a result after using their technologytail is a necessary ingredient of theirto arbitrage and buy clicks at a lowersearch efforts and many of themcost.routinely manage keyword portfolios in
excess of 100,000 keywords for eachWith all this, search marketing is still a
client. Several global marketers whoyoung medium. The future will have
operate in multiple languages and / orvideo, audio and other innovations; all
across multiple geographies have ain the same, successful pay-for-
presence on several million keywords.performance format.
Second, most search agencies aren't
excited about doing long tail work
because it entails much more work to
buy, manage and optimize 9,000 words
compared to doing it for 5 words for no
apparent greater money. In fact,
because most search agencies are
compensated on a commission basis,
THE STATE OF SEARCH ENGINE MARKETING IN INDIA.30
A report by IAMAI and Pinstorm
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