The Webchutney Digital Media Outlook 2009 report highlights around 40% growth this fiscal for the digital industry. With close to 50 million users, matching the reach of the English print media in India, it has a measly 5.4% share of ad spending. But I continue to believe that it is the most misunderstood and underutilized medium.

Eyeball game: Sidharth Rao, Webchutney.

We at the agency often encounter the view from clients that Internet doesn’t give the kind of reach that television does. Indeed, but reaching more consumers can’t be an end in itself. “Staying more top of mind” among current users is any day a superior marketing and media objective than reaching a large consumer base. And that’s where the Internet fits in beautifully. It becomes all the more attractive because it’s a space where your competitor still is not there.

Any brand is better off being the most top of mind among 20% of the category consumers than being the fourth or the fifth recalled brand among 80% of the category consumers.

The irony of advertising on the Internet today is that despite most products being in the “replacement or repeat purchase category”, the segments that do not have penetration levels of more than 30% among online Indians, and would still have around 50% ad impressions going waste, are spending heavily on the Internet. The examples include consumer durables and the financial sector, among others. And categories such as soaps, shampoos, soft drinks or even chocolates that have 70-80% or more penetration among online Indians, and would have very little wastage of ad impressions, are not even looking at it.

My friends at JuxtConsult cite the “marketing telescope” analogy to describe advertisers’ approach towards the Internet. Whether an object looks bigger/nearer or smaller/distant depends on which side of the telescope one is looking from. For advertisers, if they look from the “reach” side of the telescope, they will see only 4% of Indians, or 11% of all urban consumers, online and hence, limited reach. But if they see it from the “staying more top of mind” side of the telescope, they will realize this limited reach translates into much more effective use of their spending and hence, a better return on investments.

The report Digital Media Outlook 2009 brings insights into the current rationale behind ad spending allocations, perceptions and misperceptions about the use of the Internet as a medium, and where the Indian digital industry is headed in 2009-10.

Sidharth Rao is co-founder and CEO of Webchutney.

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