C2 CAMPAIGN | MARKETING&ADVERTISING

TUESDAY, JUNE 30, 2009 ° WWW.LIVEMINT.COM

mintTUESDAY, JUNE 30, 2009 ° WWW.LIVEMINT.COM

| CAMPAIGN C3MARKETING&ADVERTISINGmint

FROM PAGE C1 ®

Loose connectionAlmost 82% of the advertisers surveyedallocated a share of their budgets toInternet advertising, yet the share ofthis medium in the total ad pie is ameagre 5%.

The report estimates that theseadvertisers spent Rs5,163.3 crore in2008­09. Of this, only 5.4%, or aroundRs278 crore, was spent on the Internet.Television gets the biggest chunk oftheir advertising budgets, followed bythe print media at 27%.

TELEVISION, PRINT GETTHE BIGGEST CHUNKS

Currently, the FMCG sector, consumerutilities and services, and consumerdurables, which account for 70% of thetotal ad spending, make up just 30% ofthe online ad expenditure.

“Our brands will continue to investin the digital medium as it presents agreat opportunity to actively engagewith consumers,” says SrikanthSrinivasamadhavan, general manager,media services, Hindustan UnileverLtd. “Our advertising spends are in linewith our intent to invest in thismedium and we expect that digitalcontribution will only increase in thecoming years.”

CONSUMER GOODS SECTOR KEEPS LOWER PROFILE

What makes advertisers include the Internet in their mediaplans? In the report, 60% of the companies surveyed said one ofthe main objectives of their online strategy was “increasingawareness” of their brand. For 56%, it was boosting leads, sales,market share and customer base.

Surprisingly, only 9% said they use the Internet to buildcustomer satisfaction and engagement. “We use the Internet fortactical purposes, but our money is still on traditional media. Butthat said, the Internet is where all the action is and our onlinespends are much higher than last year, and even our investmentson this media are growing steadily," says Arvind Krishnan,controller, marketing, Bacardi­Martini India Ltd.

USING THE NET FOR TACTICAL PURPOSES

According to the report, 82% of the advertisers surveyed are active on digital media, yettheir usage of it varies. Of these companies, eight out of 10 have brand­specific websites,seven have used or are using display advertisements, and the same ratio develop andmaintain promotional websites, and use social media websites. In addition, five out of 10are experimenting with mobile advertising, but only four use viral marketing.

However, digital spending is not all about advertising. A quarter of the current digitalmarketing budget goes towards developing and maintaining brand­specific websites.Around 34% is being spent on advertising through display ads, viral ads and ad networks,and almost 13% of the spending is going towards social media initiatives, and 2% towardsmobile and other initiatives.

ONLY FOUR OUT OF 10 USE VIRAL MARKETING

Radio48.81 (0.9%)

Ad spending in 2008-09

Television2,652.5 (51.4%)

Print1,415.44 (27.4%)

Others768.35 (14.9%)

Internet278.15 (5.4%)

(in Rs crore,% share)

Ad spending by verticals Rationale behind media budget allocation

Others

IT/ITeS/***Internet

BFSI#

Consumer services/utilities

Consumer durables

FMCG##

Increase leads/ sales/ market share/ customers

Lead generation

Build image/ brand differentiation

Build brand awareness and recall

Help create strong market presence

Reach TG###

and masses

Total ad spending

Internet ad spending

All companies

Consumer durables

Consumer services/utilities

FMCG## Internet/IT/ITeS***

OthersBFSI#

100

0

100

033

22

16

17 28

19

6

7

23

17

66

46.4 43.2 46 81.5 67 43.6 31.3

31.3

6.16.1

25.3

18.8

37.628.6

18.5

10

10

22

3

9

13.6

43.2

13.4

12.4

10.3

2.1

15.5

(% share) (% share)

4.4

Ad spending by verticals Rationale behind media budget allocation

Others

IT/ITeS/***Internet

BFSI#

Consumer services/utilities

Consumer durables

FMCG##

Increase leads/ sales/ market share/ customers

Lead generation

Build image/ brand differentiation

Build brand awareness and recall

Help create strong market presence

Reach TG###

and masses

Total ad spending

Internet ad spending

All companies

Consumer durables

Consumer services/utilities

FMCG## Internet/IT/ITeS***

OthersBFSI#

100

0

100

033

22

16

17 28

19

6

7

23

17

66

46.4 43.2 46 81.5 67 43.6 31.3

31.3

6.16.1

25.3

18.8

37.628.6

18.5

10

10

22

3

9

13.6

43.2

13.4

12.4

10.3

2.1

15.5

(% share) (% share)

4.4

Most marketeers in India still use the Internet only to exploitits ability to deliver selective and targeted reach. Therationale provided by marketeers across verticals makes itevident that they are completely driven by reaching thetarget audience or building awareness, says the report. It isthis myopic view which is responsible for Internet’s smallshare in the total ad pie, it says. Some marketeers, however,have begun to see the other advantages of the medium andare gravitating towards it gradually.

“The digital space gives brand marketeers a greatopportunity to engage the audience for relevant productcategories. Hence Internet, as well as mobile, becomeprimary mediums of communication and engagement forrelevant categories,” says Chandrasekar Radhakrishnan,head, brand and media, Bharti Airtel Ltd.

BIGGEST DECISION DRIVER: TARGETED REACH0 100

Usage of digital marketing forms by advertisers

Digital ad spending distribution

Viral ads*

Mobile and others

EDM**

Social media initiatives

Developing/maintaining a promotional website

Display ads

Ad networks

Developing/maintaining a brand-specific website

Developing/maintaining a brand-specific website

Ad networks

Display ads

Developing/maintaining a promotional website

Social media initiatives

EDM**

Mobile and others

Viral ads*

Ever used/using currently Planning to use in the next three months Not sure when Base: 365

Base: 365

38.8 55.3

44.5

21.7

29.1

15.6

16.9

16.4

3

47.6

60

65.6

68.6

69.6

80.9

83.9 13.1

2.7

13.5

15.8

5.3

18.4

7.9

5.9

2

Share of spending

(in %)

26

15

14

13

13

12

5

(% share)

(% share of advertisers)

Increase presence/ distribution channel

Customer satisfaction/ engagement

60%

Increase awareness

Increase lead/ sales/market

share/customers

56%

Build image/ brand/

differentiation

46%

16% 9%

Brand strategy objectives

USEFUL IN GENERATING LEADS

(% share of advertisers)

Objective of using the Internet as an advertising medium

Effective in targeting youth

Cost effective

Drive traffic/engage people/easy accessibility

Lead generation/quick response/

conversion

Increase awareness/visibility/ brand building

43%

26%

17%

9%

5%

Advertisers say online media helps generate leads and initiatequick responses from consumers, thereby making this platform apreferred direct marketing tool rather than a medium ofmarketing communication or brand building.

“It is easy to track whereconsumers are spendingtime on the Internet because

of the transparency in measurabilitytools such as cost­per­click or

impressions, so while it doeseventually aid in (the) building of a

brand, we find online media veryeffective in generating leads or

directing traffic to our site orresponse to an ad,” says

Anisha Motwani, chiefmarketing officer, new

markets, Max NewYork Life Insurance

Co. Ltd.

LIMITED IN ITS EFFICACYOnline media is perceived to be more effective in “driving traffic to a website”.While marketeers look at the Internet more from the lead generation perspective,the report notes that the companies surveyed feel that it is not as effective ingenerating leads as some of the other conventional mediums. The good news isthat they feel it is as adept as the other mediums in delivering in terms of brand“awareness” and “consideration”.

“One can do interesting brand­building campaigns on the Internet, but thismedium lends itself to performance marketing because it is very measurable, ”says Gayatri Buddha, assistant vice­president, marketing and alliances,MakeMyTrip India Pvt. Ltd, a travel portal.

Effectiveness of online ads0.6

0.4

0.2

0

-0.2

-0.4

-0.6

Degree of effectivenessAttributes

Generating leads

Less effective

Delivering promotions Driving traffic toa store

Increasing consideration/preference

Same as other

Selling products/services

Creating brand awareness

More effective

Driving traffic to a website

-0.6 -0.4 -0.2 0.20 0.4 0.6 0.8Note: The nearer the degree of effectiveness is to an attribute, the more strongly it is associated with that attribute as compared with the other attributes.

Figures may not add up to 100% because they have been rounded offThe findings are based on the responses of 445 advertisers, except where stated otherwise#BFSI: Banking, financial services and insurance; ##FMCG: Fast moving consumer goods; ###TG: Target group; **EDM: Electronic direct

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 socialnetworking sites

TUESDAY, JUNE 30, 2009 ¡ WWW.LIVEMINT.COM TUESDAY, JUNE 30, 2009 ¡WWW.LIVEMINT.COM

www.livemint.com

To read the full Digital Media Outlook 2009 report, log on towww.livemint.com/digitaloutlook.htm

GRAPHICS BY AHMED RAZA KHAN/MINT

With advertisersincluding mobilephone advertising intheir media plans, it isgoing to be big thisyear, says the report.Mobile advertising islikely to increase fromits current minusculeshare of 2% of theoverall digital spend­ing to 9%.

“The ecosystem forthe past few yearshas been very nascentfor the mobile advertising industry. Only now are you able to see mobile advertisingcompanies or networks go to brands and agencies, and offer solutions that go beyondjust voice,” says Kunal Bajaj, managing director, BDA Connect Pvt. Ltd, a telecom strate­gy consulting firm and co­chair of Mobile Marketing Association of India. “2009 is amajor step in the right direction for mobile advertising. However, a proper system formeasurement and tracking needs to be in place first before the industry really takes off.”

The next most promising area may be viral ads, which is likely to almost double itsshare in the overall online ad spending pie.

Growth in Internet ad spending by type of execution(Rs crore)100

75

50

25

0 Brandwebsites

Promotionalwebsites

Displayads

EDMs**

Viralads*

Mobile

2008-09 2009-10

Socialmedia

Adnetworks

Growth (%)25

61

11

3743

91615-3

MOBILE ADVERTISING: PROMISING, NEEDS TRACKING

It is estimated that theFMCG sector’s currentonline spending ofaround Rs16 crore will goup to almost Rs72 crorein 2009­10, a 353% jump,while information tech­nology, or IT, and IT­ena­bled services, or ITeS,companies would contin­ue to spend consistentlyon the Internet, and arelikely to increase theironline budgets by almost 70%. However, the banking, financial services and insurance, orBFSI, sector, one of the early adopters of digital marketing in India, is likely to cut expen­diture by 35%, from Rs47 crore to Rs30 crore.

“We have been present online, but in the past year or so we have stepped up our mar­keting initiatives on this platform because it helps us to reach out to the target audiencefor products specific to a certain age group and gender. For example, social media is agood platform to reach college­going kids,” says Byas Anand, spokesperson, DaburIndia Ltd, one of the largest consumer goods companies in India.

Growth in Internet ad spending by category(Rs crore)150

100

50

0BFSI# Consumer

durablesConsumerservices/utilities

FMCG## IT/ITeS***/Internet

Others

2008-09 (actual)2009-10 (estimated)

Growth (%)

-35

353

70

19

1

33

BFSI# SECTOR LIKELY TO CUT EXPENDITURE

Radio111.57 (2.4%)

Projected ad spending for 2009-10

Spending share (in Rs crore, % share)

Television2,273.44 (48.9%)

Print1,194.68 (25.7%)

Internet399.38 (8.6%)

Others673.91 (14.5%)

ONLINE AD SPENDINGTO INCREASE BY 44%In 2009­10, the overall advertisingexpenditure by the top 445advertisers is expected to fall by10%, from Rs5,163 crore in2008­2009 to aroundRs4,653 crore.

Interestingly, though, theirspending on digital media is likelyto increase by 44%, from thecurrent Rs278 crore to Rs399crore. If these advertisers continueto account for only two­thirds ofthe total online spending, then theonline media industry may wellcross Rs625 crore in 2009­10.

FUTURE COURSE