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‘We hope to cash in on exponential growth in Net usage’

‘We hope to cash in on exponential growth in Net usage’
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First Published: Tue, Sep 04 2007. 12 41 AM IST
Updated: Tue, Sep 04 2007. 12 41 AM IST
The digital marketing communication market that has seen several launches and mergers in recent times, will see more action starting Tuesday when Bates Asia, part of marketing communications conglomerate WPP Plc., launches a full-service digital agency called 1010. The new operation will function as part of 141Sercon across Asia. 141Sercon is Bates Asia’s below-the-line (BTL or advertising and marketing initiatives beyond traditional media such as television, print, radio, and cinema) agency that was formed recently after WPP acquired a majority stake in Indian firm Sercon and merged it with 141 Worldwide, its own brand activation agency.
1010 will provide a range of online consulting services and technologies, including email marketing, customer relationship management, corporate website development, search engine marketing, content aggregation, blogging and podcasting services.
The new entity will start off servicing Sercon’s customer base of firms such as Sun, Microsoft, Oracle, Dell, Reliance Anil Dhirubhai Ambani Group and Tata Teleservices.
“It will aggressively explore opportunities with Bates’ current clients along withapproaching others in the industry,” said Vijay Singh, managing director, 1010-141 Sercon Digital.
The Indian team of 1010, which includes Ajit Narayan, head of strategic planning; Rajiv R. Menon, national creative director; and Rajesh Ghatge, executive director, apart from Singh will spearhead the agency’s operations across Asia. The agency has already set up an office in Singapore, and will soon have a presence in China, Malaysia and Thailand.
The digital communication space in India is small, but growing fast. Total advertising spend on digital platforms, including Internet and mobile phones, was around Rs150-160 crore in 2006, according to industry sources. In comparison, spends on television and print stood at Rs6,700 crore and Rs8,000 crore, respectively.
According to TAM Media Research, a Mumbai-based media research agency, in 2006, while ad spends on TV and print grew 22% and 24% over the previous year, Internet ad spends witnessed a growthof 52%.
Only around 40 million people in India access the Internet on a regular basis. The country has 230 million mobile phone subscribers, but advertising on this medium is yet to take off in a meaningful way. A day ahead of 1010’s launch, Singh and Narayan spoke to Mint on their agency’s plans. Edited excerpts:
How did you manage to win the mandate to run operations for the entire Asian region? There aren’t many instances of India beingthe regional hub for marketing communications.
This is no mean achievement given the fact that 35% of the world’s total Internet-user population resides in Asia.
Per capita consumption of Internet use, however, is small at 10%, but this is also the region that is expected to see an exponential growth in Internet usage. Brands are betting big bucks on digital communication in anticipation of this growth. In Japan and Korea, digital spends account for almost 20-25% of total ad spends. Vietnam saw a growth of 250% in digital spends last year, though the growth was largely on account of a smaller base. Other countries, such as Malaysia, Taiwan, Indonesia, Singapore, along with India, are witnessing 35-50% growth. We hope to cash in on this opportunity across the region.
Isn’t the digital space getting a bit crowded already? Going by the fact that only around 4% of India’s total population accesses the Internet, there seems to be too many players in the space already.
This rush is in anticipation of the growth in future. Look at it this way: 50% of this population (accessing the Net) is already on broadband. The projections for growth are quite promising. The strengths of this medium, however, rest elsewhere. The kind of targeted access that the medium provides..., the audience segmentation, the ability to engage with them on a one-on-one basis, and the consumer trends and the consumer research opportunities that this medium provides, are unmatched. That’s the reason that even mass marketers such as Nokia and HUL (Hindustan Unilever Ltd) are actively focusing on the medium to reach out to their consumers.
You have too much competition to deal with. Along with traditional advertising agencies, large Internet firms such as Yahoo, MSN and Google are also gearing up to provide marketing solutions to brands on a larger scale. Will relatively smaller outfits such as 1010 be able to stand the heat?
They will be competition for us in the future. Right now, they are not. Their strength is their medium and they are trying to leverage it to provide solutions to brands, but it is not their core business. So, they still can’t provide the variety of services that we can.
The kind of creative inputs and communications solutions that we can bring are far more focused than anyone else. But going by the size of these companies, in future, they can become a big threat and players will have to look at ways of competing with them.
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First Published: Tue, Sep 04 2007. 12 41 AM IST
More Topics: Marketing and Media | Advertising |