Home >companies >Gian M. Fulgoni | Video has changed online advertising landscape

New Delhi: ComScore Inc., the leading online audience measurement company in the US, set up its India office two years ago. Chairman and co-founder Gian M. Fulgoni, who was in India recently for ad:tech, a conference on digital marketing, media and advertising, spoke in an interview about the evolution of online retail and India’s place in the digital scheme of things. Edited excerpts:

How has the online retail landscape changed over the years?

Digital push: Gian M. Fulgoni

The other big change is the way social networking has just exploded onto the scene. Around one in every five minutes that people spend on the Internet is spent on social networking sites today. It has changed some fundamental activities. It is eating away the use of Web-based email especially among people under 35. If you look at them, their use of email is dropping at about 30-40% a year as they shift to other means of communication such as social networks or texting. The third one I would mention is the staggering growth of mobile devices. I was earlier interacting with some Google folks and they told me on 24 and 25 December of last year, they activated 3.7 million Android devices around the world. On a typical day, they are activating somewhere around 750,000 Android devices. You can only imagine the way that’s changing the manner in which people access the Internet. Although it remains to be seen how mobile advertising would grow because there is some evidence that people don’t like ads coming onto their phone, it’s privacy-intrusive. What they don’t mind is the branding of an application. That I think has a lot of potential.

What about e-commerce?

The two drivers of e-commerce fundamentally have been convenience and price. They offer better prices. In the United States, about one in every 10 discretionary dollars is spent online, excluding food and gasoline. So that’s how important e-commerce is.

What sells the most online?

In the United States, consumer electronics is one of the biggest categories. Television sets, telephones, GPS devices, apparel, travel services are all popular... and music, video and book downloads are popular during the holiday season.

The one category that hasn’t emerged online is food, the home delivery of grocery.

Consumers in the US find it more convenient to go to the store. In the UK, home delivery and groceries is a much bigger market than the US, relatively speaking.

How much have online ad spends grown?

They are growing really fast. Video has changed the game. In fact, what’s being charged for video time in the US is generally more expensive than television. It has turned out to be a very powerful medium and advertisers are scrambling to buy the available time.

In India, online advertising is still in its infancy—about $200 million, growing at 40% a year. In the United States, it is approaching $30 billion of business a year. The Internet is growing six times faster than total traditional media. You can imagine the magnitude of shift of dollars being spent online. In the UK, for instance, online advertising is now bigger than television advertising.

In the Indian context, how much do you expect the digital medium to grow?

A lot of it is going to be tied with how the economic structure of India develops. That is going to define how many people can afford to be online. The numbers today (ComScore data) show that about 90 million people access the Internet via a computer. We expect to add about 12 million users to the existing 90 million by the end of 2012, which is still only a fraction of the total population though.

How much does advertising on the Internet drive real-time sales?

In the US, the numbers that I have seen say that one in every $10 is spent online. But beyond that it is affecting a lot of decisions made in the store, whether the search was done and prices were checked online. This device (the smartphone) is affecting it more than anything that’s ever happened because people go into the store, they touch and feel the products, check it out, are about ready to buy and out comes their smartphone, they scan the barcode and they are on the Internet checking prices. And they might buy the product on the Internet while they are physically in the store. The physical store retailers are describing that as their worst nightmare because they’re becoming mere showrooms.


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