New Age Marketing: The Rise Of New Media – I

The increasing pervasiveness of information and communication technologies (ICTs) are bringing about major changes in the way marketers do business. In the days to come, sales and marketing professionals will have to be increasingly knowledgeable about the specialized intricacies of electronic marketing (e-marketing) and mobile marketing (m-marketing). This article takes a look at the way new age media is gaining ground in India.

That India is witnessing increasing PC, Internet and mobile penetration is common knowledge although not every one may be familiar with all the relevant numbers. But to get a sense of the dramatic changes that are taking place, it is illuminative to start with how Indian advertisers are looking at the new age media. According to the global media agency ZenithOptimedia, Internet advertising expenditure (ad spend) is about to see some unprecedented growth during the next two years. Internet ad spends are anyway growing at an extremely rapid clip. While Internet ad spends were only around Rs 42 crore in 2003-04, it grew five times in two years to touch Rs 210 crore in 2006, is set to double within one year to Rs 450 crore by the end of 2007 and is “predicted to explode more than 10 times”: to over Rs 2,250 crore by 2009 and will surpass the ad spends on other media such as radio, cinema and outdoor individually.
Overall, the contribution of the Internet in the total advertising revenue pie will be close to 6.8 per cent. Currently, its share stands at just 1 per cent.

In 2006, the ad spend on radio was Rs 370 crore, while on cinema and outdoor, it was Rs 290 crore and Rs 1,050 crore, respectively. In comparison, ad expenditure on the Internet was lower, at Rs 210 crore.

By 2009, it is estimated, the ad spend on the Internet will be Rs 2,250 crore, compared to Rs 585 crore on radio, Rs 558 crore on cinema, and Rs 1,673 on outdoor media.

In comparison, the ad spends on print and television in the next two years will rise to Rs 14,330 crore, and Rs 13,450 crore, respectively. In comparison to 2006, there will be a growth of 46.7 per cent and 49 per cent, respectively. Print and television together will still contribute to 85 per cent of the total advertising spend of Rs 32,845 crore.

The forecast also suggested that by 2009, advertising expenditure in the country will be 0.57 per cent of the GDP as compared to the current 0.51 per cent.

What is happening in India is very much in line with global trends. Worldwide Internet ad spending is growing at a much faster rate than on other media and may “overtake spending on other media”: in the days to come given the huge gap in growth rates between Internet ad spending and spending on other media. While Internet ad spending worldwide on other media will grow by only 3.9%, Internet ad spending is expected to grow at seven times that rate at 28.2%.

In the US this gap is even more striking. While overall ad spending there is expected to grow only 1.4% in 2007, online ad spending will grow nearly 20 times that rate at 18.9%.

Three major factors are driving the boom in India as elsewhere – increasing Internet penetration, increasing spread of broadband connectivity and increasing diversity in the activities for which people are using the Internet.

According to a “survey”: done by the Internet And Mobile Association of India and IMRB, as of September, 2006, the Internet ever user (those who have accessed the Internet at least once in their lifetimes) base had doubled in two years since 2004 to 32 million people from 16 million in 2004. Of this, 1 million people were from rural India.
While the Internet & Online Association of India as well as other observers expect the total Indian “online population to be 100 million”: by 2007-08, most of these estimates have not fully factored in the dramatic explosion that will take place in the number of ever and active Internet users in the next two years as more and more state governments go about implementing their e-governance plans through the setting up of rural kiosks with the help of a public-private partnership format.

By the end of 2008, it is expected that “1 lakh rural Internet kiosks (common service centers)”: are going to come up in India with each kiosk covering a population of 10,000. Private partners have already been roped in for setting up 20,000 kiosks in the states of West Bengal, Bihar and Jharkhand and more states are joining the bandwagon everyday. Once all these kiosks come up, the entire 1 billion population of India will be covered and will have access to the Internet.

To most marketers, the implications of all these figures are yet to sink in. To most people, Internet is still a marginal media. The usual thinking is that India is a poor country with a literacy rate of just above 52% and therefore, it will probably take several decades to cross the digital divide in India when a majority of the people will have Internet access and will be users of this new media. With both Central and state governments across the country actively, seriously and sincerely taking up the implementation of the “National e-Governance Plan (NeGP),”: this thinking is all set to receive a rude jolt.
While we have already witnessed dramatic growth in Internet usage in urban India, rural India is all set to join the party within a year or two. Marketers can afford to ignore this new age media only at their own peril!