The Hindu Business Line : Playing the context card

Search for `laptop' in the Google window, and one of the ads says, `Instant ICICI Bank Loan for Dell Laptops with Flexible EMI Options'. Click it and you'd land in http://campaigns.communicate2- personalloans.com. Similarly, typing `Reliance Money' brings up a `sponsored link' that leads to http://campaigns. communicate2-sharetrading.com, for `Fast & Easy access to the World of Investments'.

Enter the world of `contextual advertising', where advertising is relevant to what the user is looking for. "Contextual advertising does not interrupt the user, but takes his permission before giving an advertisement that helps in his decision making, be it about buying a product or taking a loan, at that moment of time," explains Vivek Bhargava, CEO, Communicate2. Such advertising can also be based on the identification of the user, based on the gender, socio-economic status, frame of mind, nationality or anything that allows advertising to become more relevant to the user, he adds, during the course of an e-mail interaction with eWorld.

"Paid search is sort of the beginning of contextual advertising; paid search is structured in such a manner than relevance is rewarded. Search engines actually charge a cheaper price if the advertisement is more relevant to the user."

For starters, `paid search' refers to a type of contextual advertising where Web site owners pay an advertising fee, usually based on click-throughs or ad views to have their Web site search results shown in top placement on search engine result pages, as www.webopedia.com defines. "Some search engines will make it easy for users to determine which search results are natural and which are paid, while others will mix the results, making it more difficult for users to determine which are the paid search results. Also called sponsored search."

An MBA from SP Jain Institute of Management, Mumbai, Bhargava has spent 10 years in the interactive marketing industry, serving the marketing needs of companies such as MTV, Pfizer, and Merrill Lynch, apart from large agencies in the US and Europe. He is the chair of Search Engine Marketing Professional Organisation (India) and is focused on spreading the awareness of search marketing in the emerging markets.

Excerpts from the interview.

How is contextual advertising differentfrom traditional advertising?

The problem with most of the current mediums is that they are interruption-oriented; a television ad needs to interrupt the television programme we are watching, a radio jingle comes in the way of the song we are listening to, and an outdoor ad has to resort to teasers.

In this clutter of non-contextual advertising, one needs to be creative in order to get one's ads noticed. In spite of users hating us for the interruptions we expect the consumers to have a positive connotation to our brand. Not so with contextual advertising.

What skills are the most required in the contextual advertising space?

In a nutshell, the skills required in the contextual advertising space are: Command over the language: The person should have a way with words. One does not really require creative copywriting skills but one should have a good grasp of the language in which the advertisement needs to be created.

Ability to think on their feet: Context advertising requires quick decision-making. The pricing of advertising is not fixed in the contextual environment - one needs to buy advertising in an auction environment. Therefore, the ability to take quick decisions, based on empirical data and insights is very essential. I would compare the skills required in stock and derivative trading to the skill required in contextual/search advertising.

Analytic abilities: Google is the closest man has ever come to creating a mind-reading machine. Every month 6 billion minds are read. The data collected on a daily basis has infinite insights. People with good analytic abilities may be able to discover insights that may be missed by a lesser mortal. Each of these insights can lead to saving or making thousands of dollars.

Lateral thinking abilities: We ran a campaign that was supposed to target local Saudi Arabians who had a certain net worth as well as had some connections with London and New York. We bid for keywords such as "Dorchester Gym Timings" and "Astoria Gym Timings". As this campaign was targeting only Saudi Arabia as a geographical location - the people who were searching for these $2,000 per night hotel would be people who were planning to stay there in the near future. That met all the requirements of the clients. Communicate2, over the last four years, has been able to build up processes through which we can identify people who can have great careers in the contextual advertising space.

Furthermore we have been able to create training processes that can help people build the skill-sets they lack.

Do you think `context' may drive design to a greater extent than the traditional research has been doing?

I think there are some fundamental flaws in the way traditional research is conducted, for example, if a girl were to ask a male survey participant of his salary, the answer is most likely to be inflated.

In contrast, search can provide insights that are less biased, obtain empirical evidence for most situations, and show the exact things that people are searching. For instance, if many people are searching for `pink Bluetooth headsets', that could motivate a telecom company to launch a headset that is pink in colour. This could also make the company realise the need for Bluetooth headsets for women and launch other variations of the headsets in other colours that may appeal to women. I think this is a consulting side to search marketing that companies such as Communicate2 may evolve into.

Where is contextualisation heading?

Google and other contextual advertising platforms started what has now become a revolution, something that has made Google the largest media company in the world rather than just a search engine. Google's market-cap is nearly $200 billion not because it is the best search engine in the market place, but because of its ability to identify content and also serve ads on a real-time basis based on that content.

As identification of content is not limited to text, platforms such as Google may bring about contextualisation to all media. Furthermore contextualisation is not limited to identification of content, but also identification of the consumer and his behaviour. Platforms such as Google shall offer contextual advertising across conventional media. Thus contextualisation of advertising has a much broader meaning (Google has already launched Google Print and Google Radio in the US).

Has search become the invincible route to advertising?

Let me answer that with a bit of a backdrop. Communicate2 started in late 1997 as a full service interactive agency; yes we are one of the few agencies in India who saw the boom and bust of the dotcom phenomenon.

The first six years of communicate2 were spent as a full service agency. We were introduced to paid search by a search engine marketing agency out of the UK - those were the pre-Google IPO days, no one knew how big `search' or Google was going to be.

Couple of months later we realised that search was the holy grail of advertising! Paid search ads were only shown to users who were searching for the product or service of the advertiser, secondly the advertiser was charged only if the user clicked on the advertisement.

We believe that looking at a search campaign is like looking at the green dots in the matrix, one fine day you see the blonde in the red dress, thereafter you are hooked to search advertising for the rest of your life. We at communicate2 realised that we will not be able to become a dominant player in search unless we focus all our resources on search. It is this focus that has allowed us to become the largest search agency in the country.

The search market has grown from $100 million to about $15 billion over the last four years - it has already become 55 per cent of the total online advertising market of the world. Search marketing is surely a medium that delivers the most effective return on investment (ROI) to clients and furthermore allows you to track the exact cost of sale. What is the likely size of the pie that you see, in India and globally?

As per statistics, the share of search marketing is about $15 billion currently. However, I believe that all mediums shall become contextual in nature, thus the share of the contextual advertising pie would be nearly as large as the advertising pie of the world, which is expected to be $1 trillion over the next four years. As per Zenith Optimedia, the Internet advertising market of India is expected to grow from Rs 210 crore (2006) to Rs 2,250 crore, by 2008. World wide, the search market is already 55 per cent of the total Internet advertising spends, I expect the Indian percentage pie of search to be larger. In emerging markets, the advertisers have a cost-of-sale approach to advertising as compared to developed countries; it is a known fact that search is the most effective medium from the cost-of-sale/ROI perspective. The number of Internet users in the country is in the range of 35 million to 55 million - depending on which statistics one believes. The number of users who read print is about 36 million. The total amount of advertising spend on Internet medium this year is expected to be Rs 410 crore, while the total advertising spend on print is expected to be Rs 6,000 plus crore. Unlike developed countries where even socio-economically poor people have access to the Internet, in emerging markets such as like India, the Internet population is the population that may be controlling 80 per cent of the disposable income in verticals such as finance, travel and lifestyle sector. It is just a matter of time that distribution of spend is corrected and the Internet spending increases to Rs 10,000 plus crore.

On your team, its strengths, and plans for the near and medium term? And, ten years from now, how do you see yourself as?

We got introduced into search four 4 years ago back by one of the best search agencies in the UK market. Over the years we have had the opportunity to work as offshore partners with famous agencies in the UK and the US, and through them we have learned the best practices of all aspects of paid search. We have got opportunities to access campaigns that are a few million dollars USD spend per month - which is tremendous learning in the paid search domain. We have got opportunity to handle reporting for Fortune 100 clients. This experience has allowed us to build a sort of leadership position in terms of paid search offshore, which has allowed us to gain a similar position in the Indian market, especially in the financial industry. We currently work with ICICI Bank, HDFC Bank, ICICI Lombard, Bajaj Allianz, Apna Loan, Reliance Money, and many other leading BFSI (banking, financial services and insurance) organisations. Our strength is this virtuous eco-system. Our offshore expertise makes us a better agency; our agency expertise makes us a better offshore partner. Thus each of our divisions improves the other division. We plan to grow to 200 people team from our current 125 people team over the next three to six months. Our target is to build a 1,000-people contextual advertising team over the next 2.5 years. Our BHAG (Big Hairy Audacious Goal) is to acquire 1,00,000 customers who pay us Rs 10,000 per month to manage their contextual advertising campaigns. I think that may take us 10 years to achieve.

In what sectors do you see changes coming, based on their sensitivity to context?

I believe that SME (small and medium-scale enterprises) will be the most sensitive towards context. Because advertising without context is a sheer wastage of advertising, and SMEs would never tolerate wastage. SMEs want to know the exact cost-of-sale when they use advertising. Other sectors where contextual advertising shall be critical are where one can complete the entire customer acquisition process through the advertisement, as for example, in travel, Internet portals, etc. Let me share an interesting story that explains how SMEs can tap contextual advertising or paid search as a medium. A year ago, back I was having a drink with a friend - he introduced me to someone. During general discussion I told him of what I did, and he told me what he did - he turned out to be a salsa instructor! He asked me what we could do for him. I asked him "what is your budget?" He said something that I will never forget - `what budget yaar - get me a student who pays me, I will pay you." *smile*'. To cut the long story short I was one too many drinks down and I said `yes' to his request. Today Communicate2 gives him nearly 15 to 20 students every month and I believe that he ranks among the highest in profit margin for us. Let's not forget that 60 per cent of India is self-employed. There are millions of SMEs who are willing to pay for customers that someone can acquire for them. The vision of Communicate2 is to remove the advertising expense from the `P and L' account and replace is with a word "cost of sale". If Communicate2 can achieve this vision, we don't need to ask the client for his advertising budget. The client would not mind as long as his cost of sale criteria is met. This would allow us to provide our services to hundreds of thousands of customers over the years.

On how you chose this line of business and name. Also, those interesting names for your app tools.

I was born tone deaf in a family that makes its living by selling musical instruments. Our family has this carrot rule whereby kids are encouraged to work during holidays and are taken to Europe and the US every few months as a return for that hard work. This is done, as hiring help in Europe is very expensive and they only work eight hours a day. I could come back and boast in junior college that I was in Paris just the other day, while my friends wouldn't know that I was sweeping floors of our exhibition stand there! One thing that amazed me about developed countries was the way they were using technologies to make advertising effective. I felt that Indian companies were weak in marketing and advertising, and using technology in advertising was a big lacuna. Communicate2 was established to help Indian companies use technologies to make advertising effective. It's been ten years now, and the mission has remained intact. The world of advertising is evolving very rapidly and we felt that it requires a level of communication solutions that would be sort of a paradigm shift to the next level - thus the name Communicate2. As for app tools, we find that most of the applications even out of India have names that don't appear Indian! So, our applications are named as per Indian themes and as per what they deliver. For example, Chanakya is our lateral thinking tool. Doordarshi delivers deep insights about advertising campaigns that may not seem obvious in the first look at the data. And Shakuni is an application that focuses towards building a paid search campaign that is competition driven, by finding loopholes and weaknesses in the rivals.

dmurali@thehindu.co.in

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