The Hindu Business Line : Seek, and you shall find

With an increasing number of Indians logging on to the Net and Googling already figuring among the favourite hobbies of many a netizen, advertisers in India are waking up to the opportunity in search engine marketing.

Sample this. Indians conduct about one billion searches every month. Out of this, 308 million searches resulted in sponsored links shown and there are over 4.8 million clicks on sponsored links by Indian users every month. If the figures are anything to go by, search engine marketing in India is rapidly emerging as a favoured medium of advertising.

And according to Mahesh Murthy, Founder and CEO, Pinstorm (which, along with the Internet & Mobile Association of India, recently came out with a report on search marketing in India), more and more advertisers are taking note. He gives an example of a leading foreign fashion brand which is entering India and has decided to advertise only through three media - the Internet, mobile marketing and banner ads! A strategy which the firm felt would be most apt to reach out to its target consumer.

Incidentally, on an annual basis, total advertising spend by all advertisers targeting Indian users is about Rs 236 crore, out of which Rs 72 crore was the spend by Indian advertisers targeting Indian users. Further, there are now about 40,000 advertisers targeting Indian web users!

Here is how it works: Every time you run a search for a keyword/s, the search engine throws up a number of results (at times several millions), the order of which is determined by a number of factors including reputation ranking. As advertisers can do little to alter that ranking, it is the sponsored results column (usually on the top or top right of the page) they are concerned with. Thereby advertisers pay for their ads to come up in the sponsored results column every time certain words or phrases are searched.

Suppose you are searching for a `cheap hotel in Goa.' A search may throw up sponsored results by online travel sites, hotels in Goa or by other travel-related firms. The order in which the sponsored results come up depends on which advertiser has bid the highest amount for that specific keyword/s.

Some popular keywords in the Indian online advertising industry are `cheap,' `discount,' `flight,' `MBA,' `laptop' and `home loan' (also internationally popular). A combination of two words, such as `cheap flight' or `cheap hotel,' is also bid for.

Keywords are priced anywhere between Rs 2.50 and Rs 2,500 ($50) in India. Some of the more highly bid keywords, with their current bids for a top position, are: Discount hotel Rs 95.40 cost-per-click, stock broker Rs 81.90 cost-per-click, cheap hotel Rs 78.75 cost-per-click, flight to Mumbai Rs 72 cost-per-click, MBA Rs 58.95 cost-per-click, laptop Rs 53.10 cost-per-click, cheap flight Rs 52.65 cost-per-click.

According to the IAMAI-Pinstorm survey, the average number of keywords bought by a brand is 42. Travel sites, the most competitive online advertisers, routinely buy and deploy over three million keywords, the study reported. Many individual Indian advertisers bid on up to five keywords to ensure traffic flows into their site.

At present, the largest advertiser in India using this medium is naukri.com (along with its sister portals 99acres and jeevansathi), which spends about Rs 9.7 crore per annum.

The pricing of keywords is directly proportional to the number of advertisers, says Vinod Nambiar, Director (Global Delivery), Position2, a US-based search and online marketing firm with an office in Bangalore. It's an open supply-demand based system, much like the stock market, he added.

On Yahoo's recently launched search engine marketing platform, the keyword `travel' had a highest bid of Rs 55. Interestingly, `hote' also had been bid, for Rs 5.5! The fact that a typo could dish out an ad is an example of the amazing flexibility of the Internet! `Books' was bid at Rs 27 and `flight' at Rs 48. `Bangalore real estate' was bid for Rs 46, while `Delhi real estate' went for Rs 28.

The more the number of takers for a particular keyword, the higher the price.

According to Rishi Behal, Director (Search and Strategic Alliances), Yahoo! India, there are currently 19 million unique Indian web users per month, out of which 64 per cent conducted searches at an average of 42 searches per user. The number of unique users is expected to increase to 50 million by 2010, he adds.

But certainly there is no risk of keywords or keyword combinations running out. According to Murthy, over half of the searches on a search engine have not been searched before so companies just need to keep adding to the pile of keywords to stay up to date.

The biggest spenders on keyword advertising in India are the retail, e-commerce, travel, and banking and financial services sectors. The largest advertisers in the banking/financial sector are Citibank, HSBC and ICICI; Yahoo! Travel, Lufthansa and Makemytrip in the travel segment; and ebay, Kijiji and Zodiac in the retail category.

Further, the number of keywords a company bids for can range from a handful to several thousands. For example, social networking site Fropper.com bids for 12-15 keywords, ranging from internationally used `dating services' and `friendship' to a more local combination of `Mumbai dating,' says Raj Seth, Product Manager, Fropper.com. The firm has invested in keyword advertising on all three players in the online advertising arena: Google, MSN and Yahoo. Twenty-five per cent of the people who search Google for these words visit Fropper, says Seth.

Besides offering keywords for bidding, search engines also use other tactics to ensure highest earnings, says Nambiar. The search engine would review your ad for its performance. You could be charged a lesser price for the keyword compared to what your competitor, whose campaign performance is bad, has bid on for the same word. This is on the basis of the conversion rate - as the search engine earns more from your better ad, it offers you a better price. In other words, there is still scope for creativity in this form of advertising as web users may not necessarily click on the first ad in the column but the most eye-catching one. Trading portal Sharekhan, for example, advertises in Gujarati on English search results in order to attract clicks.

Search engine marketing is growing by leaps and bounds in the country as it is worldwide. In fact, search engine marketing globally crossed the $10-billion mark in 2006 and is on its way to hit $23 billion by 2010. Though the Rs 230-crore figure for India looks pale in comparison, one must remember that for an industry which barely got off the ground a couple of years ago, this is a huge leap.

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