Banner Bummer? :: Can online display ads be successful in India?
09 December, 2008
by Satrajit Sen
When the concept of internet marketing was introduced in India, various digital marketing agencies held that measurability is the prime USP (unique selling proposition) of advertising through this medium.
This very concept of measurability has probably thwarted the growth of online display advertisements as many advertisers feel that this format of online advertisements cannot be measured and hence they prefer to use the online medium for lead generation activities, rather than to build brands.
Display advertising can be defined as another type of online branding that normally contains graphic information, apart from text, like logos or any other pictures. The advantage of online display advertising is that it makes use of static or animated pictures and media that may include audio and video elements.
Many feel that display ads can encourage a brand's potential customer to interact with the advertisement and spend time engaging with the brand. But at a time when TV is seen as a perfect medium for carrying out a brand building campaign, online display advertisements in India probably have a long and hard way to go.
In an effort to gauge what the industry feels about the future of online display advertisements in India, AlooTechie spoke to experts who appeared to be a bit sceptical about the future of this format of online advertisement in this country.
“Display ads have been in India for almost 10 years now and it is the fault of the online ad industry that display ads have been side-swiped and overtaken by search ads and that too to a point where search is almost double the size of display. If the industry continues to market display ads in the present way, then it will be hard for us to grow beyond a certain level,” holds Mahesh Murthy founder and CEO of Pinstorm.
According to Murthy, display ads have been so far sold on a ‘silly’ metric called CPM (cost per thousand impressions) and the basics of ad selling were ignored.
In India there is a prevalent conception that an online campaign cannot be helpful in building a brand and hence online display advertisements are being affected. “Media planners think that brand building can only be done through TV and hence they go for search based advertisements on the internet. They fail to understand that internet is not a medium where one can carry on a campaign; rather internet is all about intercepting the audience 24x7 to make a purchase decision. This is the only reason why display ads are ignored in the country,” says Manish Vij, co-founder of Quasar Media.
"Without going for the click-based model, media planners should use some ad-serving tools and gauge the view-through traffic of a display ad. Unless they do it, display ads will not emerge successfully in the country," adds Manish Vij.
Though display ads are yet to catch up the pace in India, the concept has been well accepted worldwide. “The concept of display ads around the world is changing. Roll-overs, road blocks and peel-overs are already in great demand over regular mastheads of websites across the world,” asserts Gautamm Mehra, head, search and affiliate, Ignitee. “India is also not far behind but online marketers should sell these benefits to advertisers and avoid falling for the ‘performance pay’.”
According to Navneet Kaushal, founder and CEO, PageTraffic, online display ads have not only benefited manufacturers but they have proved to be a lucky charm for advertising agencies as well. “The worldwide revenue generated from online display ads in first nine months of 2008 were $17.3 billion, which was greater than $15.2 billion of revenue generated in the previous year. This is evident that display advertisements are quite well accepted around the world and Indian internet industry, sooner or later, has to adopt this trend,” says Kaushal.
However, media planners seem more comfortable deciding their media budgets around search based advertisement models. “In the case of reduced advertising budgets, it always makes better sense for a media planner to utilize more efficient channels that include search, mobile and social media. Going by the way media buyers are looking at online display ads, we feel that display ads will consume significantly lower portion of the total Indian digital marketing budget in 2009 as compared to 2008,” says Vivek Das, business head, Ishir Digital .
“Display ads will need to be more interactive, and engaging than before in order to be able to deliver better. Contextual display advertising such as mashups are more relevant in the current scenario. Improvement in ad serving algorithms led by publishers upping the ante on digging deeper for demographics is of utmost importance,” adds Vivek Das.
It is believed that the global economic slowdown has not affected the online advertising industry too much as international luxury brands have been spending on online advertisements as advertising in the online medium is relatively cheaper than advertising in other media. Recently, Swiss luxury watch brand Tag Heuer unveiled a 'subtle' online campaign where one gets to see its prominent logo displayed besides a watch placed near the masthead of select web portals, including Business-Standard.com.
Experts feel that though this recessional period has not been too harsh on digital advertising industry, display ads have been neglected all throughout. “If marketed properly, display advertisements have a great opportunity in this country, but many marketers are yet to understand this and feel that traditional display banners will not work in the internet. And now, when the economy is going through a turmoil, it seems tough for display advertisements to come good in India,” says Amar Goel, founder and CEO, Komli Media.
Agencies like Pinstorm have created their personalized means of promoting display advertisements in this phase of global economic depression. “At Pinstorm, we are among the largest buyers of digital media in India and we have had to create a different metric called ‘cost per impact’ which helps us to buy display more accountably and sensibly. We urge display ad sellers to change the way they have always done things, if they want to survive and thrive after this economic downturn,” says Mahesh Murthy of Pinstorm.
“Unless media planners drastically change the way display ads are sold, publishers will be toast in this economic slowdown. An IMRB survey earlier predicted a 40 per cent increase in display ad revenues. We differ. We predict zero growth to shrinkage in this medium in this financial year. However, we think search will grow in this economic climate,” adds Murthy.
According to Gautamm Mehra of Ignitee, the recessional period has affected online display advertisements to a great extent. “Due to this recession, many publishers are forced to sell inventories at lower CPL (cost per lead) and thus end up earning 1/3rd than what they would have earned on CPM. They do this just to keep the inventory rolling or else they suffer having too much wastage of available inventory. This is because search budgets are usually eating into regular display inventory every single day and hence publishers should be more careful with display inventory,” adds Mehra.
Navneet Kaushal of PageTraffic feels that display ads can prove as a product's affordable branding solution even in the current recessional phase. “When the entire world is suffering from economic slowdown, it becomes essential for companies to keep promoting themselves in order to maintain a brand rapport. As lower prices will attract more advertisers, the online publishers might have to do some adjustments with their profit margins,” suggests Kaushal.
Travel website MakeMyTrip.com had recently carried out an experiment to assess whether online display advertisements have any impact on a brand's performance and hence pulled off all its display ad campaigns from other websites.
“The experiment was on for a few days and we saw that our traffic and transaction on the website went down. Even our search traffic was affected a bit,” says Sachin Bhatia, co-founder, MakeMyTrip. “Then, when we took the display campaign back live, surprisingly a lot of direct traffic began to come on the site. That made us believe that display ads are meant to give an identification of your brand in the consumer’s mind.”
According to Sachin Bhatia, display ads help in creating the recall value of a brand in the consumer's mind and hence can be a useful option for brand building. He feels that in this recessional period brands will prefer the search based option of online advertisements, but if marketed smartly, display ads can definitely be successful in India.
“Brands have to make it clear what they want from the advertisement. If they want branding, they might well go for online display ads and if they want transaction and performance, search based advertisements would be best suited. So every medium has its own viewers and display also has its viewers. But the problem is unless display ads are marketed and projected smartly, no one is going to look at that,” adds Bhatia.
It's quite evident that the Indian internet industry has so far failed to leverage the benefits that display advertisements have to offer. Even the most conservative clients such as political parties, who are keen to build their brand image and thus go on spending heavily on banner ads, are coming to internet but through various other mediums. If marketed well, these new clients could have been attracted towards online display advertisements.
I have spent a lot of time working on the following:
1. Use of doubleclick view through based conversion tracking
2. Use of a control group (banner views =0), to see if the conversion on views is statistically different from a sample which had banner views = 1,2.
In both cases, the conversion did not justify the cost in a 30 day cookie (view to book, click to book) window.
The only reason why I feel that a lot of ads are still being sold is for "brand building". I think the future belongs to self optimising ad networks, which are able to target and re-target users (like Doubleclick's boomerang) and adjust ads based on click and view based conversions across networks.
Ad sense comes close and that is why ad sense is growing.
Lets look for some conclusion for display ads:
1. How many millions of Impressions does Indian sites delivers? Can the industry player / a internet marketing group (any group) dare to share this data, so that one can measure the effective of display ads?
2. Is there one body to measure the no. of impressions delivered in India through displays? (Please understand, I am not asking the no. of business leads / conversions)
3. Can an agencies / portals / vortals / Ad Networks to share the Publisher data to a respectable Board for Display Advertising be made mandatory?
4. A tool can definitely be develop to make the above activity more fruitful.
If we online marketeers are really interested to make display ads a success, all the above mentioned agencies have to work hand in hand and don't allow Technology - Marketing Media Companies like the World No. 1 search engine to rule us. Yes we do understand that Search engine are really important, but don't allow publisher just merely a part of search engine media / adnetwork media.
If this happens, we as online marketeers will definitely not allow "Display Advertising" just collapse in front of our eyes or bought by major media players in the market.
I agree with the view of Saurabh. Banner advertising is a small segment of Internet marketing in India. There are basically three models of Internet Marketing in India: CPM, CPC and CPA.
The online marketing and advertising industry is growing but still TV and Print are the more effective medium of creating brand as well as influencing the customer to make the purchase decision.
Now a days CPC is the best and effective medium for merchants to generate business at the reasonable ROI.
CPM has long way to go as far as India. If you try to understand the psychology of Indian Internet Consumer, only a visual never can influence them to spend money from their wallet. They need more and more things which they want to know about the product or service and therefore 360 degree support is required for promoting that product or service.
It is my view that Indian Banner Advertising Industry is at the initial stage and it has a long way to go.
Yogendra Oza
http://yogendraoza.blogspot.com
If the industry works with some kind of blend between between display and performance, like a CPM campaign coupled with a fixed CPC or a CPL. Thus bringing in a value addition to the Advertiser this would surely help.
One good tip, when people go to negotiate with a client for a performance based approach a Quick calculation works and CPM also yields results for betterment, as sited in the example of makemytrip.com
For Example : Clients are bothered on leads... the publisher knows that for getting X leads he needs Y impressions, so he tells the advertiser about the same and believe me it works. The pricing needs to be adjusted relevantly to make sense.
CPM will succeed and the industry has the onus to make it succeed !!
My question and concern is that will Display work as a standalone without the support of a 360 degree marketing plan; Given that there are bottomline pressures - can one entirely substitute traditional media with Display.
Also given that every online mktg company has customers who consume the internet for as little as a few minutes a week to a few many hours a week and also given the low penetration of the Net; Given these two constraints, How does one spread the budget thru display to be able to target all of them.
Any thoughts....
Firstly, this entire premise of asking 'Can Display be Successful in India' is loaded and irrelevant. The industry is too small,the volumes too less and advertisers too few to lend a realistic and relevant picture. At best the opinions would be vague and at worse it would paint a dismal picture.
Secondly, Internet offers measure-ability and allows for call for action and user participation for any type of ad- be it search or display- does that in any way rob display ads of their effectiveness?Of course not, an advertiser has full right to ask for results- but it's the duty of an agency and publisher to explain that 'leads' are just one of the metrics, there are
Thirdly- the recessions and competition have had a effect on print and TV both. Please go ahead and ask any fairly large advertiser on how much discount it enjoys on the rate card of any TV channel or print magazine- between 25% to 50% easily!
So why are we so concerned about internet display ads being under price pressure only?
Fourthly-I don't believe you cannot do branding with Internet. You can rather do it more effectively because you have the power of involving people now, which was missing or unmeasurable so far in the initiatives of the traditional marketers. The live example is Obama, who became a household brand in less than 2 years- created primarily by internet and social networking.
My suggestion is that the industry needs to create: Guidelines and Metrics for measurement of results from different forms of ads.
A display ad should not be sold just for leads. An advertiser must see other impact points as well. It could be reach, it could be share of voice, it could be feedback other than purchase intent leads. It could be view to lead path(in future, when we are able to track how a person views your ads, does nothing then, and then comes back as a lead after 2 months- partly possible to track even now)
All these metrics need to be organised, linked with a form of ad and then the complete solution should be sold.
I am extremely positive and hopeful of internet doing very well in the coming months as a medium, including various forms of ads that run on it and so should everyone in this industry. Amen
Well online display is definitely under pressure for variety of reasons , however the most prominent are self- ascribed .
Publishers have limited tracking, do not encourage third -party measurement and billing,are sucumbing to Google adsense and hence are unable to leverage their own inventory.
The Networks are unable to use their ability to optimize or leverage their relationships to raise the Display CPMs.As a matter of fact the so called Display networks have neither been able to sell quality sites for premium nor extracted better value proposition from its network and hence have faltered against the like of Google.
The Agencies are unable to show the value of reach and frequency and how it connects with overall strategy.With limited tracking and measurement and availability of third party statistics , the lack of strategic input is very evident in the ecosystem.
The Clients with limited knowledge insist on meeting their immediate numbers and have a very little long-term view and focus.
Add to all above is the fact that we are still lackingin numbers the right Digital Minds across the spectrum ( advertisers, publishers and networks)
One reason that may explain the lackluster performance of display ads is that internet in India is still not a main stream media like in US. Broadband penetration is still low. But that will surely change with time as our tech savvy young generation takes the center stage of society.
In India internt display ads are more commonly used for building online brands. You can see display ads from Naukri, Monster, BharatMatrimony, MagicBricks whenever you visit branded portals like Yahoo, Rediff etc. But that will change with time.
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