Online Advertising Business Model Clicking Fast!
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Online advertising in India is clicking fast even though 95% of the Rs. 10,000 Crore advertising market is captured mostly by television and print media. The reason behind this upsurge is due to the fact that internet connectivity is vastly improving and spreading like wildfire all across the country. People are becoming more internet savvy. According to internetworldstats, India has at least 60 million internet users out of a population of over a billion people which is roughly 5.3% of the total population.
Another reason for the upsurge is due to the fact that the number of internet users is always increasing year-by-year, the rupee is rising against the dollar, and people have become more liberal in buying items online. Especially the festival period from August to December records the highest sales and the highest spending for advertising. As a result of the comprehensive increase in the volume of spending online by buyers, advertisers seem to take the internet on a more serious note to sell their goods and services to buyers not only across India but also all over the globe. As a result, the online advertising spending by low scale traders as well as SME’s have risen considerably over a period of time.
E-commerce biggies such as eBay are setting up plans to integrate their online advertising spending with other websites. eBay’s spending for online advertising during the festival season rises dramatically as the festival season is also the season for marriages across India and so, it is the time when sales are at its peak for all brands all over India.
Rathin Lahiri, Chief Marketing Officer, eBay India says:
“Online advertising caters to the marketers’ need to communicate to an engaged target audience and, therefore, an increasing number of brands are targeting these early adopters through 360 degree marketing communications, including ads and interactive media like blogs and contests,“Â
Leading internet portals such as Rediff and Web18 have recorded a 22% increase and 120% growth respectively in terms of online revenue from their India operations for the quarter ended Sept 07.
Manish Agarwal, VP-Marketing, Rediff India was quoted as saying:
“Online advertising is growing at a faster pace, though it might be just 5% of the total Rs 10,000-crore advertising market in India.”
Manish adds:
“The top 10 advertisers contributed approximately 45% of advertising revenue for Rediff’s India online advertising business,”Â
While Rajan Srivastava, Sales Head, Web18 was quoted as saying:
“We are seeing more brands flowing in for ads this year. We are witnessing growth of 40% in terms of advertisers and brand count this festive season,
For Rediff, the revenue is mainly due to an advertising and subscription based model. Thus, the online advertising business model has become a robust model in India and is clicking very fast.
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Online advertising in India is languishing in India at the 5% mark because we do not have a synergy between marketing, User Experience and web analytics.
The sooner we get the synergy, it will be a win win situation. We are still stuck in the basic market sgementation where as what we have to do is to understand the psyche of the user. The Indian user. The Indian user has a very different profile, motivation, and aspiration as compared to the major online markets. One of the major mistakes we are doing is enticing people with promoitions and gimmick where as we should focus on the content, offerings, and tracking of user behavior.
Marketing is actually product building. The sooner we realize that, 35-40% of the share will no longer be a pipe dream.
Am publishing a book soon on this very subject. Very very soon.
cheers
Masood