Tablets, smartphones to fuel online advertising

Written by Lalitha Srinivasan | Nikita Upadhyay | Nikita Upadhyay | Mumbai | Updated: Jan 16 2012, 06:53am hrs
Online advertising in India is set to take off as low-cost tablet computers and expanding wireless networks tempt more people to use digital devices for information and entertainment. With Indias internet users expected to double to 300 million by 2014, the advertising industrys dynamics could see a major change as more companies choose to market their products through online or mobile platforms.

Low-cost tablet computers will enhance digital advertising volumes, says Sam Balsara, chairman of Madison World, the largest Indian-owned advertising agency. By improving computer penetration, they will give a big fillip to digital advertising. Madison World has plans to recruit more digital media specialists to its 50-member team.

DataWind received orders for over 1.4 million units of its low-cost Aakash tablets in the past two weeks, managing director Suneet Singtuli told a newspaper on Friday. The government plans to buy 100,000 Aakash tablets at R2,250 apiece. Aakash will meet its match in the R1,500 Sakshat tablet developed by engineering students from the Indian Institutes of Technology. Prices may fall further to R1,000.

Marketing spend on digital will grow and not only on advertising but also on search, e-commerce and social, says Vikram Sakhuja, CEO, South Asia, GroupM India, Indias largest media-buying agency owned by the UKs WPP Group. In an underdeveloped marketing economy like ours, there is room for all media to grow, but in terms of share, digital will increase profoundly.

Group M is also strengthening its digital specialist wing.

Digital advertising growing annually at 60-70% although on a rather low base will be a major beneficiary of soaring internet use. Out of Indias 121 million internet users, 97 million are active, meaning they access internet at least once a month, show data provided by the Internet and Mobile Association of India and Indian Market Research Bureau.

Some advertisers say the tablet boom will affect print and television advertising only when internet access charges fall.

At first, low-cost tablets will rely on print and TV to create awareness for their brands, says Prasoon Joshi, executive chairman and regional executive creative director, McCann Erickson, Asia Pacific. There will be a difference in print and TV advertising with the entry of these devices.

But the big difference will happen when connectivity is available at affordable prices, he adds.

However, some say tablets will piggyback on smart phones, which have already made a mark in India.

Three years from now, low-cost tablet adoption will be faster as the smart phone base is already there. These users will be the first to migrate to tablets, says Abhishek Chauhan, senior consultant at Frost & Sullivan. By 2017, the number of tablet users will go up to 22-24 million from 3 lakh at present.

The rise in smartphone and tablet usage will propel digital advertising more than the traditional print and television media, say some experts.

Non-traditional media which include digital communications in India is growing faster than traditional media, says Ashish Bhasin, chairman, Aegis Media, a media-buying company. The split ratio between mass media advertising and below-the-line-advertising (BTL) which includes digital advertising has changed in the last few years. The ratio of BTL advertising has risen to 52% now from 20% in 2000. In future, tablets will have an impact on print and television ad spend, he adds.

Some advertisers differ. I dont see print and TV losing significantly to internet in the immediate future, says Srinivasan Swamy, chairman and managing director at RK Swamy BBDO, an advertising agency. Internet advertising is small today and will take another five years to reach 8-10% of the media spends.

Till then, I dont see any major impact, he added. His agency, however, is planning to train its employees to handle internet advertising to address the new media needs of its clients.

Internet use will explode as cellphones and tablets are used for data access, says Punitha Arumugam, chairman, Madison Media. Then, it would have a substantial impact on print and TV spends.

However, given the convergence of all content to a single screen, it also opens up a world of exciting possibilities for print and TV players, she added.

As many as 51% data consumers said they were okay with advertisements on their devices if they could access content for free, data by Nielsen Media, a media research agency, released on January 9, 2012 said. Free apps are preferred by mobile consumers, though many opt for a combination of free and paid apps to include in their collection, which usually averages 33 apps total, it said.

Among tablet and smartphone users who downloaded only free apps in December 2011, 33% chose games, 20% social networking apps and 18% music.

The challenge now is to create and market low-cost tablets with the right technology and features, in the same way low-cost cellphone makers previously disrupted the phone market.