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Business News/ Industry / Digital ad revenue to get boost from rapid rise of e-commerce

Digital ad revenue to get boost from rapid rise of e-commerce

High-speed internet and govt initiatives like Digital India is closing the divide between digital-haves and have nots

E-commerce brands such as Amazon and Snapdeal, which are expected to be the front runners in driving ad spending in India, are focusing on digital media. Photo: BloombergPremium
E-commerce brands such as Amazon and Snapdeal, which are expected to be the front runners in driving ad spending in India, are focusing on digital media. Photo: Bloomberg

New Delhi: The rapid growth of e-commerce, backed by high-speed Internet access and government initiatives such as Digital India aimed at closing the divide between digital-haves and have nots, will power digital ad revenue, experts said on Monday.

“Increase in penetration of fast-speed Internet gives marketers access to Tier II , Tier III and rural areas of the country, besides the urban centres," said Prashant Singh, managing director, Nielsen India. “The consumer is actively using social media and the Internet to make purchase decisions, and the growing e-commerce industry offers more choice and reach to the shopper."

Singh’s comments came after GroupM, the media buying and planning agency of the WPP group, in its biannual report This Year, Next Year predicted a 37% increase in digital ad revenue to 4,661 crore in 2015.

To ride this wave, there is a steady uptick in video advertising on both the Internet and the mobile phone, Singh said.

Reliable connectivity, too, is driving marketers to experiment with local languages to reach specific audiences. Government initiatives such Digital India, aimed at connecting rural areas with high-speed Internet networks and delivering services electronically, too, will propel the reach of digital across the country. “More innovative marketing techniques using the digital medium is what we can look out for this coming year," said Singh.

As per GroupM data, digital media has been growing at an average rate of 35% over the last two years. This year within digital media Video, Mobile and Social will be the biggest growth drivers, the group’s report said.

According to Anusha Shetty, chief executive at Autumn Worlwide, a Bengaluru-based social media marketing agency that works with clients such as PepsiCo, Microsoft and Big Bazaar, this seems like a logical evolution of growth, particularly in the social media space.

“Two reasons: The first few years were about exploration and testing the platforms. Small budgets were deployed for this trial and error. In the last year particularly, some brands have managed to see phenomenal results, results that are strategically aligned to marketing objectives. This brings in the confidence to push this frontier harder," said Shetty.

She added that the drastic shift in media habits is also a mark of faith in the medium. Younger age groups are consuming content on social/digital media. Even a TV show is caught on YouTube by this generation and mobile Internet is driving this change, she said.

“Older age groups who are on DTH (direct-to-home) are in the ‘record and play’ mode. Ads are forwarded. So it is an obvious move to increase participation and engagement in the social/digital space," said Shetty.

Brands have been shifting money to online advertising, confirms Hindustan Unilever Ltd (HUL), one of the largest advertisers in the country, with some brands from its portfolio getting digital makeovers.

“Digital is definitely the fastest growing advertising medium for HUL. HUL has been leading the charge on Digital for the last few years," said Gaurav Jeet Singh, head-media services, HUL. “In less than two years, the consumer footprint on digital platforms has almost doubled... industry estimates put the total digital audience universe in the country at 279 million; and growing. If we were to include mobile telephony audience within the gamut of “Digital" the penetration of medium is higher than even TV," he said.

Singh said for some brands digital is paramount. “There is indeed a distinct possibility that digital will emerge as the primary or even the sole medium of advertising and marketing for a few brands in the future. For example, a substantial part of the advertising and marketing spends of some of our brands such as Lakme, Tresemme, Toni & Guy and Pureit is on digital platforms," he added.

E-commerce brands such as Amazon and Snapdeal, which are expected to be the front runners in driving ad spending in the country, are also focusing on digital media. “Digital is one of the top four platforms that we invest in for brand engagement. Investments will continue to rise this year as well, particularly in areas of social platforms, search engine environment—display ads, video ads and search ads. The other big area is going to be content marketing for Snapdeal and the categories it sells," said Sandeep Komaravelly, senior vice-president (marketing), Snapdeal.

Snapdeal has a 15-member in-house team that works on its digital media content.

According to media experts, mobile is yet to realise its advertising potential. “While usage of mobile has grown, its ad potential has largely remained untapped. More and more people are discovering the magic of the platform and the faith has increased exponentially," said Ambika Srivastava, founder and managing partner at Strategic Mediaworks, a media and communications consultancy. “Video and social media will get bigger this year. Both time spent and number of users are increasing simultaneously," she said

In content, Shetty said, long format films and webisodes are doing the rounds on the Internet and working well with users. “Films as a format allows for storytelling and these films need not sit within the constraint of 30 seconds. Stories well told— emotional, serious or in a humorous tone—will see an impact. There will always be new ways to connect and engage. That’s the beauty of this medium. One needs to have an open mind to try and explore beyond the normal," she said.

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Published: 03 Feb 2015, 12:24 AM IST
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