mint coverage: webchutney digital media outlook 2009
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Original Link: http://64.74.118.101/2009/06/29204839/05921F33-EBB2-4A07-B8C0-5985AD42B015ArtVPF.pdfTRANSCRIPT
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.
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