Internet is impacting purchase behaviour at unprecedented level

Written by Debabrata Das | MG Arun | Updated: Jun 6 2012, 07:06am hrs
As Indian consumers spend more time online to buy products, internet search engine Google has charted out four key segments to grow its business video through YouTube, mobile internet, social networking and enterprise solutions. Rajan Anandan, managing director, Google India, in an interview with Debabrata Das and MG Arun said with the economy slowing down, advertisers are focusing more on return on their investments, while buyers are spending more time online to choose products. Edited excerpts:

How does Google plan to tap the growing interest around the internet, especially with the proliferation of mobile phones

Google will focus on four major areas. Video is one, with YouTube a key part of that, as a place of entertainment. YouTube has 31 million active users here, and is almost the largest English speaking TV channel for the Indian youth. Mobile internet comes next. There are 50 million mobile internet users in India, that will grow to 300 million soon. We are working to get more users on the Android mobile platform, and offering several mobile advertising solutions.

Third is social networking. We launched Google Plus recently, but our strategy is to make the entire web a tool for social network. For instance, imagine you searching for a new restaurant and the results show even the ones your friends like. Fourth is enterprise business. The Indian IT market will soon chose cloud computing solutions first before anything else. Most Indian business dont have a strong IT infrastructure, packaged software or dedicated servers. Today with cloud computing, it has become extremely cheap for an SME to have IT infrastructure. We have 300,000 SMEs working on Googles cloud computing solutions and we hope to grow this number.

Are the companys advertising revenues from India being affected by the slowdown

When the economy is slowing down, advertisers get much more performance-focused. They want to know what return on investment they are getting. Also, digital advertising accelerates. With the digital media, which is measurable, one knows exactly what they are getting.

So how do you shape your plans in the slowdown

We try to exactly see what people are doing on the internet. Consumers are spending more and more time online before buying. The automotive industry, for instance, is one where unit sales are slowing down to high single digits. But the user interest online is growing rapidly. That is what is important for us. Internet is impacting purchase behaviour at an unprecedented level.

What kind of opportunity will Google look for from the automotive segment

In terms of our revenues from the vertical, it is growing very rapidly but is still a very small percentage of the total mix. We have a very good market position, so we get a fair chunk of what the automotive companies spend. But we are very excited because advertisers go where consumers are. Now almost 50% of the consumers are spending time on the internet trying to buy cars, so eventually the media mix will start to reflect that. We are investing a huge amount of money on research like this.

You have launched your Car Buyers Study that shows consumers are spending more time online to research before buying. Which areas do car makers need to work more on to meet their expectations

OEMs in India have started to embrace the online medium and are spending 5-10% of their media spend there. But they have to continue to improve their web infrastructure, particularly around mobile and adding more videos and user reviews on their website. Second is digitising the value chain because automotive OEMs are dependent on their dealers. We are working with a number of OEMs to digitise their dealer networks. The third is to have a good digital strategy to build their brands using the digital brand, acquire customers and bring people to their dealerships. The growth of digital marketing spends from auto makers has seen a 100% growth but given the potential, there needs to be a 4x or 5x growth.