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When the buzz goes digital

Heena Khan
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S-'e'-rious business: More firms are advertising in the digital arena to capture the
attention of younger consumers _ S. SIVA SARAVANAN
THE HINDU S-'e'-rious business: More firms are advertising in the digital arena to capture the attention of younger consumers _ S. SIVA SARAVANAN

It’s good going for firms that help marketers reach out to consumers online.

Digital marketing has undoubtedly come of age. In 2009, Ford wrapped up the first chapter of its Fiesta Movement, giving 100 consumers a car for six months, and loading them with a task every month. Their stories were documented on YouTube, blogs, Flickr, Facebook, and Twitter.

The company was clearly interested in spotting the 20-something culture creators whose story could be convincingly told on YouTube, and who could amplify the brand on social media. The effects of the campaign were sensational. Fiesta got 4.3 million YouTube views, 500,000-plus Flickr views, 3 million-plus Twitter impression and 50,000 interested potential customers. This feat was achieved at a fraction of the cost of a typical national TV campaign.

“Not surprisingly the word ‘marketing’ is sharpening its focus on the d-word. Moving along the learning curve, marketing has slowly evolved focus from print to TV to YouTube and Twitter. The resultant shift has led to the mushrooming of digital marketing firms providing B2B solutions towards smart marketing,” says Manjunatha K. G., Co-founder & CEO, Kenscio Digital Marketing Pvt Ltd.

Kenscio Digital is a digital marketing firm with over 70 clients, and targets adding another 25 by the end of the fiscal year. Present across three cities — Bangalore, Mumbai, Gurgaon — it offers integrated client services, right from beginning the activation to acquiring customers and managing the entire lifecycle of communication.

“We map customer behaviour, tie up with advertising agencies, manage client data, leverage social media and locate possible brand ambassadors on social media. Digital marketing spend is approximately $26 billion, growing every year globally at 7-12 per cent. In India, B2B companies are slow to adapt. The digital spend is today less than 5 per cent of the overall marketing spend,” says Manjunatha.

Take another example: iCubes, an e-mail-marketing service provider, came into being three years ago, and is growing 500 per cent year on year today. “E-mail marketing is growing two ways, with lot of brands realising the high return on investment on e-mail marketing and with more and more people opening e-mail accounts. The bulk of our business comes from online retailers and fashion portals,” says Sahil Chopra, Co-Founder and Head (Sales Marketing).

The firm consults and trains brands in e-mail marketing, along with providing technology, mapping customer characteristics and choreographing engagement with customers.

iCubes closed last fiscal year with a turnover of $2 million and envisages 100 per cent growth this fiscal. “Our minimum deal size is $500 per month-$50,000 per month, and we witness a 30-40 per cent appreciation upon annual renewal,” says Chopra. The size of e-mail marketing is approximately $20 million and expected to grow 15 to 20 per cent year-on-year, he adds.

Another digital marketing firm, Xerago, has three offices in India and three overseas. Established in 2002, the company is seeing year-on-year growth at 30-35 per cent. “The bulk of the work is offshore. Our clients include Vedanta, City Group, Intel and such. We closed last fiscal with $5 million, growing 30 per cent,” says Chari Srinivasan, CMO and Co-founder, Xerago.

He says brands can no longer ignore digital as the growth in this space has been explosive. “Pepsi today has put all its money in digital marketing. Insurance is now emerging as a vertical in social media. Till now its exposure to marketing was very limited. Now ICICI Lombard and Royal Sundaram are getting onto digital marketing,” says Srinivasan.

The way forward for brands is to succeed in personalisation, context and location. “For instance, if the customer is near a mall, or a movie theatre, that is when brands should push marketing messages and catch them on the go,” he says.

ShopClues.com, an online shopping portal, dedicates 95 per cent of its total marketing spend on digital. “Twenty-two per cent of our total traffic comes from social media,” says Sandeep Aggarwal, Founder & CEO, ShopClues.com.

Indiaplaza.com, yet another e-shopping destination, allocates 100 per cent of its marketing budget towards digital. “Last year, our marketing budget increased 300 per cent, and this year we are planning to double it,” says K. Vaitheeswaran, Founder & CEO.

The growing reach of broadband and optimisation in video delivery has led to a huge rise in consumption of video content in India. According to a study by ComScore, 7 out of 10 Indian Internet users watch videos online. With videos going viral on the Internet, online video advertising is another profitable niche. Vdopia, set up in 2009, provides the technology to advertisers, and helps advertisers with monetisation expertise and in figuring out the campaign’s return on investment. It currently leads the online video advertising industry with 80 per cent market share.

“Indian online advertising is a Rs 2,000-crore market, and is growing at an annual rate of approximately 35 per cent. Online video advertising has evolved into one of the most explored new mediums available today. With the top 100 brands, the percentage spends online sit comfortably between 8 and 10 per cent, though in a fragmented way,” says Lovnish Bhatia, Director, Business Developement, Vdopia (Asia Pacific).

Vdopia’s clients include Yatra.com, Idea, Emirates, GM, HP, ICICI, Tata Indica Vista, ITC and Virgin Mobiles. Serving over 100 million video impressions every quarter, the firm has been growing 600 per cent year-on-year. “We are now handling over 100 clients. We aim to add top 100 prominent digital brands in our kitty by the end of this fiscal year. Our deal size sees 300-400 per cent appreciation every year,” says Bhatia.

The digital space has undoubtedly proved to be an economy of it own with people creating, exchanging and capturing value like any other marketplace. Indian companies are now placing their bets on Internet advertising, with many more ready to commit advertising dollars to this marketing channel.

(This article was published on July 26, 2012)
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