IAMAI Session IV: The Digital Media – Trends and Reasons Why It’s Likely to Grow (or not)
Mark Read, the Director of Strategy at WPP and the CEO of WPP Digital Delivered the Keynote Address. V. Ramani, the Co Founder of Connecturf also delivered a presentation outlining the various bottlenecks with respect to client – agency relationships online (special emphasis on the Indian Online Space). Kiran Gopinath, the founder and CEO of Ozone media along with Vishnu Mohan the CEO of APAC, Havas Media completed the panel.
Here is WATBlog’s analysis of the key elements of discussion.
Global Online Advertising Revenue – $19.5 Billion in 2005. This has grown at about 11 – 13% on an average WorldWide.
As of now, consumers worldwide spend about 11% of their time on the Internet while the % spends on the Internet are at only 4%. There exists an obvious gap which will eventually be bridged as advertisers recognise lower ROI from other mediums where consumers may not really be spending as much time.
In India, 1.8% of ad spends are on the Internet. For the UK, this figure stands at 20.1%. So as penetration goes, one can get a sense of where the market is headed. Projections are that by 2010, 3.7% of all advertising in India will be on the Internet.
Another point to note is that in many industries, India has skipped traditional growth models. So mom and pop shops who want to grow and connect with consumers directly and contextually may skip direct marketing via mail or mail order catalogues altogether and thus in a sense skip being attached to those forms of advertising and develop an expertise and guaranteed presence on the Internet.
The problem with the Internet in India however is penetration and a lack of cultural understanding.
To give you an example – Women in India are traditionally known as decision makers for many products. Most FMCG product decisions are dictated by women.
In India, women do not access the Internet and they are fragmented audiences. The ‘real’ Indian Woman – the middleclass housewife is not accessing the Internet and thus the Internet today is reduced to a niche medium, a medium that generally does not attract too much strategy or too much money either.
Advertisers however fail to recognize that the power of the Internet lies in relevance – true as of now the TA is limited only to teens in India. But the Internet has the power to actively engage the user – create conversations, create interactions etc. Thus it goes beyond the passive experience that a TV commercial would provide.
The Internet currently does not take ad spends primarily because of penetration issues and also because it does not understand Indian Culture too well. Traditionally, FMCG products are ingrained in culture so once Internet Media Vehicles recognize this, the Internet can become an apt complementary medium for Mass media vehicles (for now atleast)
An interesting point was noted Mr. V Ramani, Co – founder and Vice Chairman of Connectturf – he asked the audience at the IAMAI summit whether anyone was from the FMCG sector on the client side – interestingly only one hand went up. So the verdict from FMCG majors is quite clear – as of now, the Internet is not a priority.
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