Saturday, March 27, 2010

The state of digital marketing in India

Digital marketing is a media vehicle to promote a product or a service through Internet, mobile or any other interactive channel. The concept of digital marketing started during 1990’s with the emergence of Internet evolution. We further divide digital marketing into Pull vs. Push.

Pull digital marketing: This involves the user who seek out and directly grab the content via blog, specific links/sites and streaming media.
Push digital marketing: Content is being sent by SMS, RSS and EMAIL.

Rapid changes that are occurring in on-line/digital marketing, reshaping the way businesses and consumers interact with each other. Advertisers are eager to understand and utilize the Internet technology to build customer relationship. It has become an effecting tool for marketing communications medium. This has resulted in an array of one-to-one, real time, personalized product and target marketing. Digital marketing has given birth to customized marketing that is closely linked to individual customers’ needs and wants with goods, services and information just a mouse click away. Internet advertising has recaptured the imagination of marketers, who see a massive potential to raze the profile of their brand through digital marketing tactics like:
 Blogging
 Microblogging (Twitter)
 Blogger relation
 Email marketing
 Social media advertising
 Social network participation
 Search engine optimization
 Pay per click
 Cost per acquisition (CPA)
 Cost per impression (CPI)
 Streaming media (Audio and Video marketing)

Growth factors for digital marketing:
Internet user base- India has witnessed continuous growth in the Internet adoption majorly in urban areas. There are 50 million Internet users, but numbers of claimed and active Internet users are 57 million and 42 million. Internet access growth started accelerating in 2002 and changes the face of Web and Email. Even Internet has starting penetrating to the bottom of pyramid.
Web 2.0- It manifests itself as a social network and facilitates interactive information sharing on the World Wide Web. The ‘Web 2.0’ has changed the face of off –line marketing tactics and offering ways to dramatically improve marketing reach while simultaneously reducing cost. This includes web-based communities, web applications, social-networking sites, video sharing sites, wikis and blogs. This user driven online services has catches the attention of marketers.
Emergence of social media- The term ‘Social Media’ was used first after LinkedIn created their social network application in 2004. The very concept has risen steadily in 2006Social media has a huge base roughly Facebook having 350 million and Twitter having 50 million users. . Recent studies indicates that social media is becoming a more important part of the ‘global media consumption’ for internet users. ‘Gen Y’ the future consumer eats, drinks and sleep social media.
Mobile marketing- Mobile penetration in India is the second highest in the world today. There are 350 million mobile subscribers in India and every month over 8 million users are being added. Mobile value added services, smart phones and 3G technologies, have made this sector even more lucrative.
Online activities- With the advent of Internet, users are involving in online activities with double fold. Users have got various reasons like:
• Job search
• Instant messaging/chatting
• Check general news
• Dating/friendship
• Check sports (other than cricket)
• Check cricket content/score
• English information search engine
• Matrimonial search
• Streaming media (audio and video)
• Download music
• Games

Currently digital advertising has a very small component of total advertising spend and that is only 4%. Current studies have shown that, Indian online advertising market is Rs 245 crores and it will experience the highest growth over the next five year. As digital advertising is continued to grow, so marketers need to understand the implication of various parameters of consumer behaviour. The challenge for marketers is to have a clear and deeper understanding of every media vehicle so that can selectively target right users. Internet has opened up a lot of opportunities for marketers for targeting customers in an interactive and informative way. Digital advertising fruit full for target and personalize marketing and gather information across geographical boundaries in accost effective manner. Digital advertising not only helps in lead generation but also result in brand building. As the influence of Internet is surmounting, marketers should take a collaborative approach. Still with having this vast users base growth of online display advertising is very less compared to other developed countries. Companies should monitor its need and accordingly shape up their digital advertising content. Digital advertising consist of banner ads, sponsorship links, pop-ups content based ads and rich media. In India marketers are still apprehensive about digital marketing. Lack of awareness and lack of expertise might be the reason for not delving into this sector.

Take away- Recent financial debacle in the US and its aftermath on the India economy has resulted in differences in market dynamics. However increase of Internet user base, extensive usage of Internet by political parties for elections and consistently usages of Internet for advertising by SMEs are the whooping factors strongly supporting for sustained growth of ‘Internet Marketing/digital advertising’ market in India. The above data points are yet to mature in India and secondly this growth is likely to driven by, when local languages have a sizable share in Internet domain.


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