Clueless in cyberspace

Written by Rakesh Raman | Updated: Feb 7 2008, 03:29am hrs
For all the ballyhooing, the online media market in India remains in deep hibernation. Agreed, data can be misleading at times, but in the case of Indian web properties, the conclusion is clear. Today, there are over 150 million online sites in the world, catering to some one billion surfers. Of this, an estimated 100,000 content and corporate sites are run from India. None of them figures in the global top slots. According to the Web info tracker Alexa, an Amazon.com company, none is in the top 100, though local versions of international properties like Yahoo, Google and Orkut hog the limelight. And estimates suggest that over 90% of all global Internet ad revenues (estimated at $30 billion, which is a 6% share of the global ad pie for 2007) go to these 100 sites, which are mostly news services or user-generated content sites (including social networks). The top 50 sites, according to Interactive Advertising Bureau and PricewaterhouseCoopers , bagged about 90% of the online ad money in the second half of last year. And during this period, the top 10 sites got a staggering 70% of the money.

All others seem to be cyber-posters. Are Indian online properties really so weak Lets see. Out of nearly 50 million net surfers in India, an estimated 80% are young adults prone to the charms of Orkut, MySpace, YouTube, Facebook and so on, ignoring local sites such as Bigadda and ApnaCircle. Since their reading habits are poor, news sites in India do not attract and retain many. The average time spent by users on an India-centric news site is less than 10 minutes a day. Most readers do little other than glance at the homepage. So, thats the trouble. A small and superficial online crowd.

But who cares Advertisers and media companies like living in a fools paradise so long as theres a dotcom attached. Big advertisers earmark a small part of their budgets for online ads without following any tangible return-on-investment rules. And as media companies targets are so low, they are satisfied with whatever comes their way without putting in much of an effort. Result: total online ad revenues have languished at just 4% (while print and TV get 40% each) of the countrys ad spend, now estimated at over Rs 16,000 crore.

Will things improve Yes, if online players care to understand consumer behaviour. Today, the most widely used ad forms are banner graphics and text ads, like sponsored links on content sites and search engines. Most advertisers go by the number of page views to check a sites popularity before releasing banner or text ads. These ad banners are like hoardings that stare at commuters.

But a glance at a roadside signboard cant be construed as a sale. Likewise, surfers are not surfing for ads. Typically, theyre headed somewhere, and dont like barricades and interruptions (bandwidth hogs, least of all). This is why ad payment norms such as cost-per-click (CPC), cost-per-millennium (CPM for 1,000 clicks), cost-per-period (CPP) and even cost-per-lead (CPL) are fast losing their relevance.

For direct impact of online ads on sales, pricing models based on cost-per-order (CPO) and cost-per-sale (CPS) are fast gaining importance. However, most websites lack the sort of compelling content that can attract and retain eyeballs. This would mean a better interface between advertisers and content companies. Overseas, this has actually started happening. Google, for example, agreed to pay over $3 billion for the digital ad firm DoubleClick. Likewise, Microsoft took over online marketing player aQuantive Inc for $6 billion. And a few days back, the ad agency Publicis joined hands with Google to seek the latters Web analytic support for cyberspace marketing.

Strategic resilience is essential. Only then does an online property have a chance of emerging from obscurity to global fame.

The author is a technology market analyst. These are his personal views. Email: rr_thakur@yahoo.com