The International Advertising Association (IAA) India Chapter kicked off the IAA Webinar series on 26 April with Rajan Anandan, managing director, Google India, as the first guest.
Abhishek Karnani, co-chair and director, Free Press Journal group and Manish Advani, head - marketing and public relations, Mahindra Special Services Group, are the co-chairs of the IAA Webinar series. The Webinar was moderated by Pradyuman Maheshwari, editor-in-chief, MxMIndia. Excerpts from the discussion.
Reluctance of some Indian companies to go online
Advani started the discussion by asking Anandan for advice to Indian companies that are still reluctant to start their digital operations due to the potential negativity. Responding, Anandan said, “There are 150 million users on the internet and about 95 per cent of the SEC A, B 15 to 44 year-olds are on the internet and are spending more time on the internet than any other medium. If you happen to sell products or services that cater to this audience group, then if you are not on the internet you might not be able to reach them. More importantly, if you do not engage with them, and if your competitors are engaging with them, then the users may migrate to other brands. We have seen this happen in countries around the world and what’s interesting about India is that despite being at 12 per cent penetration, it already has around 150 million users.”
He added, “I see two kinds of companies. One that says that now I can get instantaneous feedback when something is not going well or when there are opportunities for improvement. Those companies are able to leverage this medium in incredibly powerful ways not just for building awareness or driving transaction but also for getting feedback. Then there is another group which says that if something goes wrong then consumers will talk about it and the whole world will find out. But the reality today is that with the advent of the internet, social networks and online video, users are able to stay connected. There are 2.4 billion consumers on the internet today and by 2015 that number will get to three billion and by 2020 that number will be six billion. So, at some point, every single human being will be connected to internet and unless you are selling to people outside of planet earth, it’s important to be on the internet and leverage the medium well.”
Importance of language in an Indian context
Answering a query from Nishad Ramachandran, vice president, Hansa Cequity, about the importance of language in the digital medium with respect to Indian audiences, Anandan noted that there are 150 million Indians on the internet today, and there are actually only 150 million Indians who can speak, read and write English. “So, pretty much every new Indian user who comes to the internet today is outside of that bastion,” he pointed out. He added, “Obviously, local language content is important today. Some of the fastest growing websites on the internet in India are local-language driven.”
He observed that on YouTube, which has 50 million unique users per month, more than 80 per cent of views are for non-English (content). Infrastructure that enables local language content at scale, Indian language content that is not yet online and web-only content creators were among factors that would drive language content, he explained. “Today we have about 40,000 Indian content partners on YouTube and almost all of them are non-English. Over the next three to four years, we will see a tsunami of non-English content come to the web, and that’s going to be critical,” added Anandan.
Maximising online video potential by content creators
Mudit Singhal, founder and business head, Storycentre, enquired about how content creators could use the online video medium effectively.
Sharing some statistics from YouTube, Anandan said, “We have about 11,000 full-length movies, about 90 per cent of Bollywood music catalogues, about 80 per cent of all regional music catalogues, TV shows of the top six TV networks and live sports as well. Clearly, all this wouldn’t be there on YouTube if there wasn’t a way to monetise it. Now the monetisation rates on online today are significantly lower than on TV.”
While digital advertising was at around Rs 2,500 crore, TV is much larger, he pointed out, adding: “But the only thing is that digital is growing at 50 per cent while television, I guess, is growing at about 12 to 14 per cent.”
He urged content creators to keep the economics of the medium in mind while creating content. “If you want to make say a Rs 80 crore movie and say that you are not going to distribute it anywhere else but on the internet... Can you break even on that? Probably not yet. That’s going to take some time as the CPMs have to catch up,” he explained.
On the potential, Anandan added, “There are 50 million users including mobile. There are about 10 million unique visitors who access YouTube on mobile while about 40 million view us directly on the web. The TG is 15 to 44 years SEC A, B and this is an interesting audience set. For example, it’s been about two weeks for IPL. The time spent on YouTube on IPL has doubled year-on-year.”
This, despite the state of connectivity, underlined Anandan, and said, “As broadband begins to scale out the consumption of viewer-based online content will go through the roof. If there is one thing that is preventing the internet from realizing its potential, it is broadband.”
Stickiness of businesses going online
With Google taking initiatives to bring new businesses online, Gaurav Mendiratta, CEO, SocioSquare, wanted to know about the kind of businesses that are coming on board and sticking with the medium - and if they are not, reasons for the same.
“There are about 12 million businesses in India that have more than five employees. That is the third largest in the world next to China and the US. Despite that huge number only 1,50,000 businesses advertise in any media. In print, at least 1,50,000 people advertise at least once in a given year; about 10,000 businesses advertise on television and about 7,000 businesses advertise on radio. If you look at digital advertising, the magnitude is bigger than television but less than print in India. To grow the digital and mobile advertising market the first step is for businesses to have a mobile or online presence,” observed Anandan.
Google launched the ‘India get your businesses online’ initiative over two years ago, and Anandan reveals that there were only about 4,00,000 businesses that were online and of those only 1,00,000 websites of these were ‘decent’. “When we did a little more research behind this, we found that what works in India is generally a free model. So we built about half a million websites for businesses for free. This was supposed to be a three-year initiative and I am excited to state that we have crossed 300,000 websites which is a three-fold growth and we are confident of achieving half a million quality websites by 2014,” he added.
While there are half a million doctors in India, less than 50,000 of them have ‘decent quality websites’, explained the Google India head. “Our view is that consumer-focused businesses that can be used to get leads will be the best way to move forward. By 2015, there will be more business in India that will advertise on digital than and on any other medium. And, by 2017, that number will be three or four times that number today because of the credible, performance-related nature of the business. And, for small businesses that will be really important,” he surmised.
Monetisation of long-form content on the web
Answering a question posed by Jay Sampat, M&E practice, Accenture, about the monetisation models of long-form content, Anandan cited the examples of Times Internet’s Box TV, YouTube and Netflix. Comparing YouTube’s successful advertising model with Netflix’s successful subscription-led model, he said the onus is on the content owner to choose the model. “It is also important how the television industry is going to change over the years. Moreover, with the advent of IP TV, it depends on how consumers start accessing content,” he said.