Financial Daily from THE HINDU group of publications
Friday, Oct 01, 2004
Info-Tech - Trends
`Telecom, entertainment sectors poised to be big online spenders'
Nirmal D. Menon
Mumbai , Sept. 30
COLD calls of Internet advertising in India seem to be paying off, with observations of the Internet and Online Association suggesting that telecom and entertainment companies will soon join the financial sector in utilising cyberspace as a serious medium of advertising.
"Telecom and entertainment sectors are poised to take to the Net aggressively in India, as clearly the return of investment of monies spent so far, though at an experimental budget level, has delivered a good response across the board," said Ms Preeti Desai, President, Internet and Online Association (IOA), a non-profit organisation representing the Internet economy.
Although financial services companies still remain the biggest online spenders, followed by travel, tech and personalised services of pure-play Internet companies, shifts in media movements of traditionally mainstream advertisers such as telecom companies could catch media planners off guard.
One of the IOA reports also points out that telecom and entertainment will touch as much as 9 and 10 per cent, respectively, of the total online advertising revenues by 2006-2007.
"We have seen a real change in attitudes among marketers in the last six months. IDEA and Tata Indicom are amongst the clients who have increased or entered for the first time with considerable spends, proves that traditional advertisers are spending online," said Ms Desai.
The online advertising market grew only by 23 per cent last year, from Rs 34 crore in 2002-2003 to Rs 42 crore in 2003-2004, said Mr V. Ramani, Chairman of IOA, while adding that he expects a growth of 90 per cent (touching Rs 80 crore) this financial year.
"We also expect a turnaround in media planners' recommendations toward this medium once it crosses the Rs 100-crore mark," he added.
The viral aspect of Internet advertising, wherein it engages advertisers both at mainstream advertising and below-the-line activities such as direct marketing, will give it an edge in the years to come.
Promotional activity is another potential area for companies such as Coke, HLL and Nike.
Online presents the ultimate cost-effective way to get consumers to interact, with the Net being the easiest medium for them to capture brand-consumer interaction information, Ms Desai pointed out.
While TV and print have planned using reach and frequency metrics and GRPs, the online medium is still purchased in units called impressions and pay per click/lead. The association is also planning to roll out an audience measurement system that will track these clicks.
"It is in the planning stage and we would announce details of the same soon. We have had discussions with MRUC as with other reputed companies but nothing has been finalised yet," she added.
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