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Advertising on-line. Pros and cons.

November 13, 2006

Half an hour into surfing and bookmarking some Websites on cars, Sunil Sachdeva, a passionate car-freak got this sinister feeling that he was being watched. Whichever site Sachdeva visited, he was uncannily being shadowed by car ads and banners. Soon, he found that even the ads on his home page had changed. That was some time ago. Today Sachdeva no longer bothers about the spookiness of it. In fact, he expects to see ads only of products that interest him as he surfs the World Wide Web.
Homing in…
The ability of web ads to home in on the right target audience makes them a critical tool in the hands of advertisers. Accurate user profiles can be build through transaction information, registration procedures, and anonymous matching. Ads can also be targeted at audiences based on the day of the week, or even the time of the day! There are products that deploy advanced targeting technology to help on-line advertisers reach the right audience.
Besides, advertising on the Web is an interactive experience, with the interactivity being instantaneous, and two-way.
Value for money
There’s more. Net ad campaigns are typically less expensive, as well as easier and faster to produce than television advertising. A simple banner can be made within Rs 5000/-. Sure, an audio and video version could cost in the region of a few lakh of rupees, but a 60-second television commercial could easily cost Rs 50 lakhs. In contrast, putting up an exclusive Website purely for the purpose of a brand promotion costs as little as a Rs 2 lakh.
The flexibility advantage
The flexibility of using ads on the Net enable advertisers to cost-effectively launch ad campaigns at short notice in response to specific needs. ‘In addition, once an ad campaigns is launched, advertisers can change it’s content and frequency of delivery in response to feedback, and they can do it on-line,’ says Viraj Savant, Director, DBS Internet, a Net Solutions Provider. Net campaigns are logistically simpler to handle as even campaigns spanning several content sites can be run from a central location.
The very nature of the medium allows an advertiser to create different sets of communication for different audiences and sequence them. This results in users being automatically able to see the different parts of a 3-ad teaser campaign in the right order everytime he visits the site. Moreover, advertisers can make contests more interactive and product or promotion-focused by weaving the contest around say, a current television commercial. One example: different end-options can be devised for the commercial, with prizes for the best options. Says Ashish Bhasin, President Initiative Media: ‘This ensures his participation.’
Indeed, Web ads can also be used by advertisers to post discount coupons on Websites, enabling customers to download and redeem them.
Better feedback
What makes Web advertising exciting for advertisers is that they can get an immediate feedback on their campaigns. The Net allows advertisers to measure the effectiveness of their ad campaigns and provides the flexibility to control those campaigns even as they are being delivered. Advertisers can instantly measure the number of times an user views, responses, or clicks on a particular ad and whether or not this results in a purchase.
But do you get the numbers?
One big grouse about advertising on the Net is that it doesn’t deliver numbers. Thought this problem is not as acute as it was when internet connections were limited, net audiences still cannot be compared with television audiences.
In absolute terms, advertising costs on the Net are low: a banner ad could cost as little as a few hundred rupees to put up on a website (this can go into lakhs, depending on the traffic to that website), but the cost per eye-ball can climb to as high as 25 paise per view as compared to a mere 5 paise for television. “But there is no wastage,” argues Bhasin, “because in the long run, it’s effective cost versus the absolute cost.”
Making Web ads work
The real advantage of advertising on the Net is the profile of Netizens. They are highly educated tax-payers and the ability to zoom in on the right consumer profile is a great advantage. In fact, some companies are striking hard bargains with sites whereby they pay only if a sale is effected…nothing pleases a demanding client better.
Yet, traditional advertisers sold on numbers are not being converted in a hurry. Admits Habib Nizamudin, Senior Consultant, O&M: “Some clients feel that advertising on the Net is not cost-effective as the audience is not large enough.”
Besides, Net advertising is a completely different ballgame. The conventional approach of evaluating sites by the eye-balls they generate and their rates may work with traditional media. On the Net, the objective assumes overriding importance. A print ad for example, could be a multilayered communication with the objective to sell as well as build the brand in very broad terms. Net ads, on the other hand, need to be tailored to a definite objective to be most effective. For example, to generate an inquiry or change an attitude.
The Net surfer’s mindset is completely different from a newspaper reader or a television viewer. Most users log on to the Net for a specific purpose and are likely to ignore, even, get irritated by intrusive advertising.
The techies do it best
Not surprisingly, it is the Net technology companies that have best understood Web advertising. In the US, IBM and Microsoft are the top ad-spenders on-line.
In India, companies like Intel have carried out extensive promotions on Indian Websites. “It is an opportunity for a one-on-one relationship building,’ says Kanwaljit Singh, General Manager, Intel. Some years ago, Intel wanted to own the excitement created on the Net around the festival period from Diwali to New Year. “A partnership had to be created with a high traffic Website to gain visibility for intel.com and thereby, promote the Intel content in a relevant and exciting environment,’ says Singh.
With Satyam Online as it’s partner, Intel managed to generate 75,000 impressions for the Intel Technology quiz and 39,000 for the Intel Home of the Future.
But even non-tech advertisers can get encouraging results on the Net. ICICI for example doubled NRI deposits through Web advertising one year. In fact, finance companies contribute a fair share to the on-line ad spend on Indian sites. Citibank and Standard Chartered have run campaigns targeting credit card applicants. The ad offers prospective client application forms and is followed up by a sales person’s visit to complete the sale.
Other finance companies like Kotak Mahindra AMC have also cashed in on the power of the Net. Kotak, which advertises on sites like indiainfoline.com and investsmartindia.com is drawn by the fact that Web banners can be made to appear on a host page according to the demographics and personal characteristics of the visitor. “The targeting can be fine-tuned,” says Prakash B. Dalal, Chief Marketing Officer, Kotak.
The early adopters
Some FMCG companies jumped on to the Web advertising bandwagon early, in the late nineties. One of the early starters was Hindustan Lever. It partnered with contests2win.com for on-line promotional contests. The results speak for themselves. Levers’ first contest generated only 66 participants but within two years the company generated 30,000 responses. At best a print campaign for a contest generates 15,000 responses.
One of the reasons for the high responses on the Net is because of the younger generation’s penchant for the Net – and for contests.
Some consumer durable companies like Godrej GE Appliances have been advertising on sites like rediff.com and contests2win. Says Shyam Motwani, General Manager, Marketing, Godrej GE Appliances, ‘The extent of micro-profiling that is possible represents segmentation at it’s best and enables us to tailor-make solutions catering to very specific target groups.’
Still a long way to go
On-line ad spends of traditional brick and mortar companies are still a small part of the whole. However, this is all set to change. The Net population is galloping ahead, and media planners and advertisers are rapidly logging on.

Advantages of advertising on the Web:
Automobile sector: Target audience can be provided with a simulated driving experience, or taken on a virtual car-show.
Electronic sector: Advertisers can use the medium’s multi-media capabilities to take customers through a review of product features.
Hi- Tech products: Advertisers can use the medium’s computing capabilities to demonstrate product benefits.
Services sector:
Advertisers can use the medium’s interactivity to answer queries on how offerings can be customised.
Entertainment sector: Advertisers can let users sample clips of movies, games, and music, and also make the medium the merchant

Disadvantages of advertising on the Web:
Surfers who are on the net for a specific purpose may ignore your ads.
Surfers may notice your ads but choose not to click.
Low-net penetration of your target markets. This will push up cost per contact.
There is a limited media choice as not all Indian sites maintain user data-bases.
There is an absence of sufficient research on the effectiveness of Web ads.

How can advertisers use the space on the web?
They can use banners either on top or the bottom of the page. These banners could be plain, or click-throughs, connecting to the company site.
They can use pop-up screens, or insterstitials, which will appear when the surfer performs a certain operation or opens a particular page.
They can tailor contests and promotions exclusively for the Net, where users can log on, fill in an on-line entry form, and just click to submit.
They can create discount coupons or forms that users can download from the site, and redeem at the nearest brick and mortar outlet.
They can build customer relationships by using e-mail to send newsletters about product upgrades, sales, and other corporate developments.
They can leverage their on-line brand to forge co-branding deals with high-traffic sites that attract audiences similar to their own target audience.
They can create an on-line community around a subject that is relevant to the product’s core benefit either on the corporate site or elsewhere.
They can attract surfers to their site by registering with search-engines, and picking key-words about the product’s core benefit.
And many many more…

(Published in the magazine Business Today)

Marketing articles: The story of the brand Taj
Category creation: How Hindustan Lever’s market segmentation strategy worked for the deo market
Quality of after sales service in India
Brand extensions and why brands fail
Sub-Branding.

Related articles:
Advertising Codes and Advertising Standards in India.

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3 Comments leave one →
  1. November 13, 2006 6:56 pm

    Very informative. Basically, net advertising facilitates what in marketing lingo is called positioning. Just as mobiles are sold en masse now, maybe net advertising though customized shall also have a mass appeal some day.

  2. sunil sachdeva permalink
    December 17, 2006 8:33 pm

    Congratulations Nita. I think the site is a great idea. Was also very happy to see the width of work done over the years.

    Great show! Keep up the good work.

    Warm regards

    Tony

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  1. Online Ads, showing what people want to see at Blogbharti

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