Advertisers warm up to online spend

Inflation is affecting consumer spending and advertisers say they will now spend only on media which gives them the highest measurable returns. TV, for instance, grabs the biggest ad pie due to its mass appeal and the ready availability of TRPs, used to assess its returns.

Advertisers are increasingly turning to the internet as the return on spending can be tracked accurately. A Ficci-PwC report pegs the online advertising market in 2008 at Rs 420 crore (Rs 4.2 billion) and predicts it will touch Rs 1,100 crore (Rs 11 billion) by 2011.

Nokia India, for instance, has been running big campaigns like Millan of the Villains and 'Do the Music' (involving AR Rahman where users remix tracks from Rahman's latest movie and win a session with the composer).

Colgate Palmolive, ITC, Dell, Viacom18 Media, Canon, Intel, Tata Housing, Reliance ADAG companies, Maruti, Toyota, Airtel, Hutch are other prominent names taking the digital space seriously.

Anuj Poddar, senior vice-president, Viacom18 Media (owner MTV), and chief, Digital Media, says: "I won't say we plan to cut our advertising spends as our absolute ad spends have increased. But there will be a shift from print to online as print is the most expensive medium and I can't measure the effectiveness of the money put into it." Almost every show of MTV is online now.

Consider Canon. Last year, its ad spend split was (in percentage): Print 50; outdoor 25; TV 25. This year the split is: Print 15; outdoor 25; TV 50; SMS 5; online 5.

Alok Bharadwaj, senior vice-president, Canon India, explains: "We plan online spend of 10 per cent by next year as this is where the target audience is. People seek more information and will go online to get it. So, why not advertise where people go to read?"

Parminder Singh, business head, technology, Google India, says: "Wherever people see an ad, they will turn to internet not only for information but also for product comparison. Thus, the medium becomes important."

Poddar says: "MTV is a youth brand and since 84 per cent of the internet users are below 30, it makes sense to put money here."

A Maruti-Suzuki spokesperson agrees: "The online user profile matches the profile of our customers. This demographic convergence offers a huge opportunity to us, especially with our youthful and stylish fleet offerings like the Estilo, Swift and SX4." Maruti had some successful initiatives in the online medium with its Zen Estilo and lately the Swift Dzire, putting up videos on YouTube.

There are challenges, though, as Amar Deep Singh, vice-president, business development and client consulting, Interactive Avenues , sums up: "Companies are increasingly looking at digital media .This will become a substantial part of their marketing spends only when the user base becomes significantly large. This is likely to happen within the next two years with rapid growth in internet access and hardware costs coming down."