mintwww.livemint.com12‘THURSDAY, OCTOBER 7, 2010, DELHI

Technology

16,2892008-09

18,9512009-10

21,5232010-11(E)

21% 10%

8%

7%

6%

3%21%

21%Consumer services

Auto

Durable goods

Infra/Manufacturing

Lifestyle goods

IT/ITES/Internet

BFSI

Real estate

2% Telecom

1% Pharma

In 2009, Webchutney Studio Pvt. Ltd, a Delhi-based digital marketing agency, studied the at-titude of marketers, usage

and ad spending allocation to digital media compared with traditional media, such as print and television. The study was in collaboration with knowledge partner JuxtConsult Research and Consulting Pvt. Ltd.Digital Media Outlook 2009 showed how the slowdown prompted many advertisers to look at cost-effective advertis-ing, including mobile and online modes.

Digital Media Outlook 2010 continues to track the trend in the online and mobile space as far as ad spending goes. The scope of the study has wid-ened—it covers the top 1,000 marketers, including brand chiefs and marketing and com-munication heads of various sectors. Last year’s survey had the top 500 advertisers in the space.

“Our primary objective was to study the nature of allocation of ad spends by top marketers across various mediums. In the process, we also analysed the rationale that drives spends towards the online media,” said Siddharth Rao, chief executive officer, Webchutney.

The study, conducted between April and July 2010, pegged the overall ad spending of the top 1,000 marketers at `18,950 crore in 2009-10.

It also estimated ad spend-ing growth at a compound an-

nual growth rate (CAGR) of 15% from 2008 to 2011. Moreover, the ad spending of the top 1,000 marketers increased 16% in 2009-10 from the previous fiscal. In fact, 14% growth is expected in the 2010-2011, increasing overall ad spending to `21,523 crore.

Though the online spending share of the top 1,000 advertisers is still quite low at 4% in 2009-10, it marks an increase from 2% in 2008-09. It is estimated that the share of online marketing will grow to 5% in 2010-11.

The report also observes that 2009 was touted as the year of mobile advertising in which the spending share was expected to grow over 600%. Actual growth has been only 45% and is likely to slow to 36% in 2010-2011.

“The scope of marketing in the mobile landscape has been hyped. There’s been too much expectation in too little time,” Rao said. “The number of mo-bile Internet users is too small to spark marketers’ interest in this medium.”

The report states that only 25% of marketers say they plan to increase spending on mobile advertising in 2010-11 while 38% want to cut it.

While verticals with maximum overall ad spending contribute the least online, it’s marketers with the smaller ad budgets who spend a higher marketing budget online.

Despite challenges, Digital Media Outlook 2010 reports that online ad spending will increase by 45% in the next financial year.

Despite a slow start, online advertising continues to gain momentum, thanks to its growing reach and the awareness of consumers. Text by Abhilasha Ojha; graphic by Uttam Sharma/Mint

The online experimenT

GrowinG online mediumThough online spend share of the top 1,000 advertisers remains 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 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), followed by print (`6,690 crore), and below-the-line advertising at `3,758 crore. In 2010-11, online advertising is estimated to grow at `876 crore while mobile advertising will marginally increase to reach `129 crore.

Banks BiGGest spendersThe FMCG sector, with the largest overall ad spend of `7,910 crore at 42%, spends only `56 crore or 9%, on advertising online. It is the banking, finance and services industry which contributes the maximum (around `114 crore or 19%) to total online spends. This is followed by sectors such as consumer services which spends `108 crore in the space. IT spends `79 crore and telecom spends `70 crore in the online advertising segment, according to the report.

FallinG moBile spendMobile advertising spends have been low at 45% in fiscal 2010. In fact, this is likely to drop further to 36% in fiscal 2011. Mobile advertising stood at `65 crore in 2008-09 and saw a marginal growth of 0.5% in 2009-10 and stood at `95 crore. And while sectors such as consumer services, auto and durable goods had the maximum spend share in the mobile segment (21%), pharma spent only 1% in the space. Telecom, too, had a low spend share in the segment of just 2%.

Using social mediaIt’s clearly with the need to connect with younger consumers that the report has noticed an increase of 50% in social media usage by advertis-ers. 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.

Year-on-Year GroWTH In aD SPenD

primary executions

Band website2% 2%

EDM Display-rich/interactive

Ad network

E-commerce

In-game advertising

App-vertising

SEO/SEM

Online video

Referrals/affiliates

Virtual/augmented Reality

Contextual search/listing

Paid keyword search

Blogs

Viral marketing

Branded sponsorship

Podcasts

Adverblog

Mobile ads/apps

Paid inclusion

Social media platforms

Promo website Display/text

secondary executions

tertiary executions

overall (Fiscal 2010) online (Fiscal 2010)

Radio Online MobileFiscal 2009

6,401

7,284

8,088

5,610

6,183

6,687

2.348

3,040

951

TV Print BTL Outdoor

1,032

1,103

551

714

882

363

603

876

65

95

1293,758

Fiscal 2010

Fiscal 2011 (est)

Fiscal 2011(est)

Fiscal 2010Fiscal 2009

95

129

65

Ongoing Planning to use Not too sure when

Ongoing Planning to use Not too sure when

Ongoing Planning to use Not too sure when

85%69%8%

24% 31%

7%62%

51%38%

11%

55%

8%

38% 38%

13%

50%

21%5%

74% 75%

20%6%

66%

21%

14%

76%

19% 6%

84%

10%9%

82%

49%44%

8%

43%51%

6%

33%59%

8%

31%

63%7%

32%

63%4%60%

33%

7%

67%

28%

5%

26%

63% 11%

1% Retail 3%1% IT/ITES/Internet 13%

2% Media/entertainment 3%3% Real estate 4%

3% Pharma 2%4% Lifestyle goods 2%

4% Infra/manufacturing 2%6% Auto 4%7% BFSI 19%

7% Telecom 12%9% Consumer services 18%

11% Durable goods 9%42% FMCG 9%

5%2%

93%87%

7%7%8%

90%

3%

5%

11%

TECHNOLOGY 13THURSDAY, OCTOBER 7, 2010, DELHI ° WWW.LIVEMINT.COM

mint

Online scores as an effective medium only for driving traffic to a website and creating top-of-mind recall among users

CPM

Number of leads generated

Audience measurement system (free)

Not analysed

CPC/CTR/CPA

Response to mail

Share of voice

Page views/ site visits

Audience measure-ment system (paid)

Reputation metric for social media

Tapping online poTenTialOnline ad spends will increase by 45% in the next fiscal. At least 51% of the advertisers surveyed in the report have indicated that they will increase spends in the online segment in fiscal 2011. Gaurav Gupta, business head, utility vehicles and strategic planning, General Motors India, says: “Media and creative agencies have to sell the power and potential of the online medium. Too much of focus on return-on-investment (ROI) takes away from the true potential of the medium.”

Tracking viewers onlineMrutyunjay Mishra, co-founder of Webchutney Studio Pvt. Ltd, says ad-vertisers haven’t yet utilized the potential of the online medium in terms of advertising. While 73% of advertisers view only the click impressions (the number of times viewers click on the site), 84% don’t know how to track viewers who reach advertisements or companies through social media. Advertisers cannot think of the online medium as a substitute for traditional media. They need to look beyond just clicks, added Mishra.

creaTing brand awarenessOnline media is effective in driving traffic to a website. And while the medium barely helps in driving traffic to a store, many adver-tisers admit that it can create brand awareness. “Digital platform as an advertising option is evolving fast and this is where we feel 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.

Television

Outdoor

Events/exhibitions

Mobile marketing

44%

32% 24%

40%

19%41%

16%40%

44%

25%38%

38%

Radio

Public relations

Direct marketing

44%

41%

14%

44%

29% 27%

30%30%

40%

Print

Online

Newsletters/others

Other emerging media

36%

47%

18%

25%

24%

51%

15%39%

46%

25%22%

54%

67%

33%

70%

30%

73%

27%

23%

77%

46%54%

15%

85%

16%

84%

20%

80%

16%

84%

53%47%.0

.4

.2

.0

-.2

-.4

-.6 -.4 -.2 -.0 .2 .4 .6 .8

n Creating brand awareness

nless effective

More effective n

nabout the same

Driving traffic to a store n

Driving traffic to a website n

nGenerating leads

Engaging customers

nDelivering promotions to customers

nIncreasing consideration/preference

nSelling products or services offline

53% advertisers believe online is “less effective” in creating brand aware-ness compared to traditional media

Only four out of 10 marketers consider online as an effec-tive medium in engaging customers

why spend on online ads? Maximum online ad spends were done to enhance website develop-ment, display and search modes. Spends on display ads accounted for 24% of overall spends. While consumer services are expected to contribute the maximum in fiscal 2011, the share of banking, financial services and insurance are likely to drop to 16% from 19% in 2009-10. Mohit Gupta, chief marketing officer of travel portal Makemytrip.com said: “Digital media has always been very important, especially since a majority of our transactions happen on the website.”

BFSI

Consumer services

IT/ITeS/Internet

Telecom

Durable goods

FMCG

Real estate

Auto

Retail

Media/entertainment

Lifestyle goods

Infrastructure

Pharma

nShare in fiscal 2010 nShare in fiscal 2011 (figures in %)

19 1618 1913 1312 129

109

104 44 33 33 32 22 32 2

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 impressionFigures 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

FROM INTERRUPTIONTO ENGAGEMENTAs we evaluate and take stock of the impact of digital

technologies over the last few years, the wave of changeand maturity in consumer behaviour is evident. The Internethas enabled a shift in the consumption, production andcuration of relevant content in a relatively young nationwhich embraces new ideas and technologies eagerly, and hasfound a strong voice in online communities and networks thatprovide instant contact with the rest of the world.

What does mean spell for a brand struggling to find its wayinto the lives of empowered and “connected” consumersspoilt for choice? And how far do marketereers go to stayahead of their consumers and competitors inadopting/integrating path-breaking channels to createdistinct, memorable brand experiences? Can their currentinitiatives do justice to the speed at which their consumersare evolving?

In our discussion with decision makers who hold the powerto drive this change in traditional marketing strategies, sadly,for the most part, it is easy to notice the ignorance of anincreasing gap in their existing efforts, specifically when itcomes to integrating digital media at the core. While most areprivy to the changes triggered by digital media acrossdemographics, they have failed to optimize the use of suchchannels beyond the obvious.

The range of options open toadvertisers online has grown beyondsearch and display. Overall growth inonline 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. Despitethe positive trends, the medium still plays a peripheral rolewith the smallest share (4%) of the overall ad spending pie.

What is intercepting mass adoption of the online mediumamong marketers when a large chunk of its audience isactively on it? marketers and agencies need to realize thatwhile they were busy with Excel sheets, a lot changed. Take,for example, branding. A decade back, branding was aboutrepetition. The agency develops a way to communicate themarketers’ promise to customers and keeps hammering till itis stuck in their heads. Today, the goal for brandingcampaigns in the digital context means demonstrating toaudiences how the brand actively works with them foroptimal, individualized solutions. marketers across the globeare discovering that interactive tools and content that enablecustomers to search and research information about productsand services are becoming brand assets in their own right.This clearly indicates that sooner or later online branding hasthe potential to become the central marketing expression fororganizations. In that case, every major advertiser today mustre-evaluate their marketing spending, and that goes beyondshifting the budget from one medium to another.

In the coming years, the nature of the message is not goingto look like a television commercial, print or even the classicbanner ad, however “rich” it maybe. It is going to providefunctionality and a different kind of interface for the user toact on something. With people spending endless amount oftime in closed social environments, they wouldn’t want to beinterrupted; instead, they would seek to remain engaged andwant functionality that eases a task they are about to engagein. The role of advertising agencies, in collaboration withpublishers and technologists, to improve the valueproposition of online marketing becomes as crucial as amarketer’s belief in this medium to deliver appropriateresults.

The Digital Media Outlook 2010 report attempts to findanswers to some of these questions and understand therationale behind marketers’ allocation of ad spending whileoffering deep insights into their perception of the onlinemedium.

SIDHARTH RAOONLINE STRATEGYSidharth Rao is co­founder and CEO of Webchutneyfeedback@livemint.com

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