No stories this time, no anecdotes. Just a conundrum. Please help demystify if you can.
Some basic facts to begin with:
Reach on TV
1. Reach in Television Audience Measurement refers to the average number of people who have viewed a particular TV Content for at least 1 minute. Simply put, it means the number of people who have been exposed to the program for at least a minute.
2. Reach of a particular program IS NOT EQUAL TO the reach of the ad in the ad break of the program. This is because people wait for breaks to take a pee break or a tea break. Hence Ad Break reach is always lower than Program Reach.
3. Also, reaching a person just once is ineffective. An advertiser always plans for a campaign to reach his TG at a minimum frequency of 3+. Which means he wants his TG to be exposed to his ad at least thrice. This reduces reach even further. To as low as 50% of the original number.
Reach on Internet
1. Reach on Internet is calculated simply by measuring the number of Unique Users that have been exposed to the campaign.
2. Since the number of UUs on the site in a campaign are equal to the number of UUs exposed to the ad, the two figures of reach are equal.
3. Also, if one divides the total impressions served in the campaign by the total UUs reached, one also gets the frequency number.
An analysis that I did:
In an exercise with post evaluation data from a client, on the reach of a program where his campaign was run on a particular TV channel, the Cost per Person reached (Cost of the campaign divided by the reach) was INR 9.44. This was at a frequency of 1. If a frequency of 3+ had been taken, Cost per Person would have been much higher. Probably closer to INR 20. And if the Ad Break reach had been taken, it would be still higher.
The same money, if spent on the Internet, would deliver a Cost per Person reached of INR 2.03 at a frequency of 10!!!
I am very sure that similar exercises with other campaigns would yield similar and equally shocking results.
Of course, it is possible to argue that an ad on TV is the only piece running at a given point of time and hence is high impact. But the same can be achieved through Search Interstitials and Home Page Takeovers and will still prove far more economical.
Therefore the Conundrum:
Is there a flaw in the theory? If yes, I’d like to know what. If not, why don’t advertisers try this out then?
Prior to working with NetworkPlay.in I have had some experience in Digital Agency and Online publishers. The time was 2005-2008, the Economy was growing, Monies were flowing in, everybody was happy. I took a yearlong break for further studies and now that I am back in the Indian Internet Industry, I see that everything is the same but no one is happy. Quite surprising.
Earlier, as the monies were pouring in, everyone was bent on getting a higher pie from each advertiser, hence deals started getting cheaper. Not just rates but also the type of deals started to change and everyone started offering CPC and CPA’s. The publishers at this time were happy as almost all their inventory was getting consumed and with a 100% sell thru even a CPA deal will make the P&L account brighter. Agencies were happy as the clients were willing to spend more and more, Advertisers were happy as this was a medium which could show immediate success in terms of leads and further sales.
These were happy days when no one(all 3 parties included) really cared about brand and engagement on Internet.
Now, with the slowdown hitting all the major advertisers (BSFI & Dotcom) publishers have started to feel the pinch. Sell thru’s have fallen, and % of CPA deals have increased. Consumer doesn’t have the power to purchase (rather consumers are hesitant to purchase) hence reducing the CTR and CTL ratios. Overall the system has started to crack. Agencies are under tremendous pressure from the clients to deliver more and better. Now that the medium has proved to be an efficient lead generator, in these bad times the client wants more and cheaper leads. Overall no one is Happy.
I think we need to start all over again.
If we are measuring a campaigns with metrics like click and lead we are ignoring the fact that there is something called brand perception. This could purely be that the user does not have a connect with the brand or product, which is because of his perception towards the brand. A user might have seen an ad but not clicked it. This does not mean that the user has not seen and read the contents of the ad. There could be so many other reasons for which the media owner should not be held responsible. It could be also the fault of the advertiser, as he has not targeted the right audience or in a offline sense it could be due to spillover.
Displaying an Ad is the primary function of a media. Internet Media right now is not getting the dues for this. Considering the fact that Digital media is the only media that can provide a two way communication, we should charge a premium from an advertiser who is spending on display, instead we have taken it to a level where the advertiser pays much less than what he would have paid for the same user in other media.
I feel there are some sectors like BFSI who had the ability to milk this media and they have done it. Being a service industry they saw a huge potential in the media. Now that they are hit, what next?
Auto is another classic example of a category being miss lead by “leads for test drive”. Knowing that Indian Auto industry is poised to see a good number of launches this year, other mediums will take the larger chunk of budgets and we will be left with bits and pieces for getting test drive leads.
What are we doing to get a big chunk of media spends from the top advertisers like FMCG and Consumer durables, who have the spending power? I am sure we can get a piece of this by getting in leads for users who are interested in RIN tikia and Parle-G biscuit.
We as an Industry have to stand up to this and get our share, else it will be very difficult for us to scale up the revenues. We have the potential to Live happily ever after.
What is the consensus about internet advertising effectiveness during a recession or an economic downturn? Should you advertise? What are your benefits?
Get some insight from media chief executives, internet advertising consultants and leading online advertising research studies and publications:
1. Why continue internet advertising in a recession?
“In recession times, it is quite good to continue to advertise because it is an opportunity to take market share.” —Patrick Stahle, chief executive, Aegis Group’s Aegis Media Asia-Pacific, as quoted in the Wall Street Journal, October 20, 2008.”
2. Why media budgets favor internet advertising and online advertising spending during an economic downturn?
“In a downturn when your ad dollars get restricted, you move them into areas that are more direct and measurable.” —Ashutosh Srivastava, chief executive, WPP Group’s Mindshare Asia, as quoted in the Wall Street Journal, October 20, 2008.”
3. Why Internet advertising is the advertisers’ wise decision during a recession and economic downturn?
“There’s a focus on efficiency during these leaner times. Advertisers are putting more concentration on maximizing direct response. The Internet is the most efficient direct response machine ever invented.” —Guy Phillipson, chief executive, Internet Advertising Bureau UK, as quoted in ediaWeek, October 7, 2008.”
4. What is the forecast for traditional media versus online advertising and why?
“Life is going to be quite difficult for traditional media as the temptation in downturns is to cut marketing budgets.” —Sir Martin Sorrell, chief executive, WPP Group, as quoted in MediaWeek, October 7, 2008.”
“The media budget slashing is expected to fall heavily on traditional media such as newspapers, radio, broadcast television—and even consumer magazines. Comparative Estimates: US Advertising Spending Growth for Select Media, 2008 & 2009.”
5. What consumers want in this recession and economic downturn and why?
In a study conducted by OMD, a media agency under the Omnicom umbrella, 81% of consumers surveyed said advertisers need to continue to communicate about their products during a recession.
“We want to help consumers be certain they’re making smart choices when every dollar they earn counts.” —A.G. Lafley, chief executive, Procter & Gamble, as quoted in The Wall Street Journal, October 15, 2008.”
The source for the foregoing quotations: The White Paper “Digital Marketing Now: Seven Strategies for Surviving the Downturn; By CEO Geoffrey Ramsey eMarketer Inc. November 2008.”
It is evident that…
When you closely examine and analyze the foregoing, two main points become evident (1) Internet advertising will lead making money online (2) The Internet Advertising Industry will continue to grow during 2009 and beyond.
Best of all, the benefits of internet advertising effectiveness holds the key to your coming out of this recession or economic downturn ahead of your competition.
My interpretation would go beyond the dominant metrics of CPC CTR & CPL. What the article emphasizes is the need to map audiences to the client requirement rather than inventory. Unless the media is accepted as reaching the most correct audience for a customer it will continue to be sold as a commodity. Now, with the recent economic downturn stretching ad budgets thin, online ad space has become a buyer’s market, and many publishers find themselves having to accept unfavorable cost-per-action (CPA) deals, as opposed to the more traditional cost-per-thousand-impressions (CPM) arrangements, in order to survive.
Sunil Punjabi - Co Founder & Vice President Sales - Networkplay.in:
“If I had to capture the essence of Networkplay in one line, I would say, ‘Networkplay is India’s No.1 Verical Multi-Genre Brand Ad Network’. In comparison to what is available in the market, Networkplay offers a completely different proposition of providing audience rather than just blind inventory. And this audience is the right audience with effective targeting and high reach. We command Over 500 Million Exclusive PVs and 12 Million Unique Users across networks through our federation. The above combined with the inherent advantages of online creates an unassailable value proposition in building sales and saliency for advertisers.
How did it start ?
Internet Gurus have averred that the Internet Industry will grow to 1000 crores in a couple of years. If that is the number that one goes by, taking it from 350 crores (which it is at today) to 1000 crores will not come out of performance advertising alone. This means that Internet will have to find its rightful place as a Medium of Advertising. That currently is an evangelizing game because the advertiser does not still look at the Internet with the same filter as he looks at the other media. That is largely because Internet has not been positioned correctly and the same measurement metrics (as in traditional media) are not offered.
Currently, in the Indian Internet space, there exist Individual Portals like Yahoo.com, Rediff.com, etc, that offer brand metrics in a small measure but can’t offer critical mass. On the other hand, there exist networks that offer scale but not these brand metrics. There clearly was a need gap here for an entity that offered both. Which is how networkplay came into existence.
Many Ideas, decided on the “ONE”!
An idea is worth the salt only if there isn’t anything similar to it in the market. Of the various ideas that keep crossing my mind everyday, a hoard of them get sifted out because in some form or the other they exist in the market. This was clearly a need gap in the market and the thought of doing something in this space took form over a couple of drinks with my friends Ram and Sidharth Rao. It dawned on us that there was nothing similar existing in the market and that apart from everything else, this is what the market is looking for and if we get into this we would also have the first-mover advantage on this.
Motivation to start :
I always had the entrepreneurial ‘keeda’ in me. It was only a matter of finding the right idea, the right team and the right backing (as VC to sustain us initially) before I launched into it. The emergence of this idea in collusion with Ram and Sidharth Rao, the confidence that there is no other way for the Internet to go but this and the fact that I knew exactly the people I wanted to have on board decided for me what I wanted to do.
Organizations funding/ capital :
After the idea was in place, the task of putting together the business plan and working out the numbers began. After exactly two iterations, our business plan was ready and most find it hard to believe but the entire story unraveled in a matter of 48 hours, right from conceptualization, to putting together the business plan to mobilizing the right team.
I have always known the value of batting on the front foot in cricket. I follow the same principle in life as well and it was with the same passion that the business plan was presented to the team at Capital 18, who are now our investors. They saw value in the plan, they saw the passion and commitment of the people behind the effort and they decided to partner us in this venture. The take out from this seemingly simple process of mobilising Venture Capital is that you need to have an idea whose time has come but no one else has hit upon it yet and you have to have everything else (except the money) to convert that idea into a working and paying business.
Key elements for starting and running a successful business:p>
As I said, a kickass idea whose time has come but hasn’t been thought of by anyone else.
The right team to turn this dream into a reality.
Drawing up a proper business plan in line with the market dynamics and expectations.
Getting initial backing through effective articulation of ideas to VCs.
Hard work, hard work and more hardwork to sustain the business.
Most satisfying moment in your business :
One also needs to understand that in a new business there will be ups and there will be downs. Sometimes, the downs will be more than the ups but if one is gritty enough and has the confidence and capability to weather the storm, winning small battles is inevitable. And when you win a lot of small battles, winning the war seems possible. We have won a lot of small battles already and all of them have been extremely satisfying. Right from putting the entire team in order and starting going into the market to getting our first campaign to converting our first non-believer into a believer to so many other things. So there hasn’t been only one satisfying moment, each day is satisfying in its own way.
Success Mantra to future entrepreneurs :
Believe in yourself and your idea, have the courage to give it shape and the resilience to see it through right to the end. And most importantly, have fun while at it all.”
http://www.peerpower.com/et_article.php?article_id=exp17&article=Y&pub=public
We have finally signed up a Network18 invested internet company under our federation last week - Bookmyshow.com.
BookMyShow.com is India’s largest entertainment ticketing & Information service which sells tickets for over 700 cinema screens spread over 200 cinemas in 52 cities in the country. They allow booking tickets online using credit cards, debit cards, net banking, mobile and also operate a call centre.
I am sure bookmyshow will add lot of value to our strong shopping vertical which attracts premium transaction audience in the country.
I am happy that we were able to convince bookmyshow to go the brand way. Here again, we don’t plan to limit ourselves to only plan vanilla banners, but work on customised brand solutions.
My special thanks to Roopesh Shah, Marketing Head at Big Tree for making this happen.
Cheers!
Last week was a memorable one for me as it was my first partnership deal for NetworkPlay.in. The feeling is good and keeps me pushing to close more of such deals in our journey towards success. This is our deal with www.Indiahotelreview.com (IHR) for an exclusive ad sales representation. Even though we have a strong Travel vertical, we needed to strengthen it by adding a strong Hotel booking website, which is typically used for weekend getaways.
www.Indiahotelreview.com an arm of Vitri Infocom, is one of the largest hotel search cum booking site. It specializes in budget traveling and unexplored destinations. With Travelguru.com and Indiahotelreview.com, we have strengthened our hotel booking audience, hence enhancing our offerings in Travel vertical. Air-tickets have been the leading product in the Travel vertical online, but I am sure in the future Hotel booking is going to increase. Moreover a user spends more time online when he is searching/booking for hotels compared to air tickets. Also unexplored destinations are catching up with the imagination of regular travelers.
We ensure we have the right basket of audience for our advertiser, hand picking sites with the right audience to support our verticals.
Remember the story of the six blind men and the elephant? Yeah, yeah, I know. Yet another story from me, whoever’s been reading my blogs. But anyway, remember the story?
The first touched the body and thought the elephant is like a wall
The second touched the tusk and thought the elephant is like a spear
The third touched the trunk and thought the elephant is like a snake
The fourth touched the leg and thought the elephant is like a tree
The fifth touched the ears and thought the elephant is like a fan
The sixth touched the tail and thought the elephant is like a rope
All of them were partly right but wholly wrong.
Here’s the poem verbatim. Googled it and found it.
John Godfrey Saxe’s (1816-1887) version of the famous Indian legend, The Blind Men and the Elephant
It was six men of Indostan
To learning much inclined,
Who went to see the Elephant
(Though all of them were blind),
That each by observation
Might satisfy his mind.
The First approach’d the Elephant,
And happening to fall
Against his broad and sturdy side,
At once began to bawl:
“God bless me! but the Elephant
Is very like a wall!”
The Second, feeling of the tusk,
Cried, -”Ho! what have we here
So very round and smooth and sharp?
To me ’tis mighty clear
This wonder of an Elephant
Is very like a spear!”
The Third approached the animal,
And happening to take
The squirming trunk within his hands,
Thus boldly up and spake:
“I see,” quoth he, “the Elephant
Is very like a snake!”
The Fourth reached out his eager hand,
And felt about the knee.
“What most this wondrous beast is like
Is mighty plain,” quoth he,
“‘Tis clear enough the Elephant
Is very like a tree!”
The Fifth, who chanced to touch the ear,
Said: “E’en the blindest man
Can tell what this resembles most;
Deny the fact who can,
This marvel of an Elephant
Is very like a fan!”
The Sixth no sooner had begun
About the beast to grope,
Then, seizing on the swinging tail
That fell within his scope,
“I see,” quoth he, “the Elephant
Is very like a rope!”
And so these men of Indostan
Disputed loud and long,
Each in his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!
The point being? A lot of people in the Internet Industry think Internet is only for performance.
Questions:
1) As India too faces the slowdown heat and industries are cutting down on the advertising spends unless they find the medium accountable. Vertical ad networks are said to be 100% accountable and transparent, they have a direct focus too therefore:
Would you agree the vertical ad networks are the need of the hour in India and that this could lead to further growth in the online advertising space?
A) I have had 3 – 4 situations in life where I remember how powerful first mover advantage is and how quickly the market dynamics change if you lead into a direction that’s new and suddenly shows promise. All competitors follow suit and that’s a good sign I would say, it only reiterates the power of your business model being right. It has happened again at NetworkPlay with me and I am now by far convinced simply because the market is now moving in a direction we have set, every one is now calling themselves transparent and accountable thus by shifting focus from their core business model, which wasn’t built on this premise, I would say tats a good thing because course correction in business is the key to victory but implementing that correction is a task and not many have successfully implemented course corrections well to my knowledge.
So, need of the hour is not vertical ad networks, need of the hour is to understand the advertisers business needs and then provide him with a solution and vertical ad networks can do that better than anyone else in that space, therefore if this means that vertical ad network is the need of the hour then so be it.
Online advertising space is bound to grow with or without vertical ad networks because online medium has now started being a core area of focus in very many organisations and so I have no doubt that its going to grow leaps and bounds in the next 2-3yrs. Vertical ad networks are just going to be one contributor to the entire scheme of things.
2. What is your view on the scope of vertical ads in India? What kind of product does Networkplay offer- CPC, CPM or CPA?
A) Scope is large simply because it differentiates what technology hasn’t mastered to do yet. Segmentation of audience is critical to understand SEC profiling, purchase power and so defining target audience clearly. It is critical to understand the kind of categories that will cater to these points and accordingly verticalise your offering. It can be in one category or in a multi genre format like how we represent, however multi genre can also have its pitfalls if not categorized well and so we have just about 8 categories we work in where we think we can deliver value for both advertiser and publisher alike.
We strictly work on CPM model and we will work on CPA at some point but again we would be redefining the metrics of CPA in a brand environment when we have our product roll out in the next couple of quarters.
3. Do they bring differentiation in an already cluttered market?
A) Off course they do, having a clear definition of your audience is the key for brands to understand their target audience thus by defining what their business objective and creative objective will be when they run a campaign on the internet.
4. Is the Indian ad network market mature enough to support vertical ad networks business model?
A) Markets are created and a smart marketer knows where his market lies and how to create it, we believe that we have created a space for ourselves well enough to get onto a growth path we have chartered for ourselves. It only shows that there exists a market. Now is the market mature? Not yet, it will take another 2-3yrs for it to get to some scale in terms of demand coming closer to that of supply.
5. How much of an exclusive inventory can vertical ad networks really garner?
A) You can garner inventory at will since the supply demand gap is huge but that’s not the key for Vertical Ad Networks. One has to know how much demand actually exists in the market and accordingly map supply to ensure there is optimal usage of inventory to the demand you generate.
So we have a lot of exclusive alliances but I don’t think adding more will help the cause, we might add more when we think the demand scenario changes and I keep getting feedback from my sales team, which knows the pulse of the demand situation in the market very well.
6. These days publishers are increasingly launching their own ad networks, does this in any ways pose a tough challenge to vertical ad networks?
A) Publishers are launching ad networks because they have realized the importance of delivery in the performance space and there is only this much that one can do with owned and operated inventory and so they seek external support to ensure they get more market share in the performance space but this makes no difference to us because we only play in the brand side of the business. We are not looking at the short term and so playing in a 25M USD market as compared to playing in a 85M USD market may sound illogical to many but when this 25M USD becomes 150M USD in the next couple of years, we would be having our first mover advantage in a big way.
7. Is a vertical- horizontal ad network tie up possible? If yes, how would it help the two and internet advertising?
A) Strategically it’s possible but just a tie up wont help. It has to be a significant alliance where there is clear demarcation on who runs for which dollars and this will get visible when the consolidation in the space happens where you will see mergers and acquisitions that will ensure that there is one entity that’s taking care of both lines of business. I think there will just be 2-3 players by 2011 – 12.
8. Currently what is the share of vertical ad networks in India? how is it compared to in the international market?
A) I consider only NetworkPlay as a vertical ad network and we already have close to 7% market share in the ad network space and that in just 2quarters and we would grow leaps and bounds going forward to take atleast 30 – 35% market share by the end of next year.
As compared to international markets say US we are no where near those numbers.
9. What are the trends to watch out for in this space in 2009/ 10?
A) I am sure we will see a lot of innovation and traditional brands coming online and that would propel the growth of the industry on the whole.
They say the World is facing the greatest and the worst recession post World War II. I am sure there are very few among us who have experienced both.
The market dynamics have seen a sea change since that time. It has changed in all forms, shapes & size. The change is probably more visible in the Indian market than probably that of European or American market. So I fail to understand how & on what parameters one can compare both the situations which have a gap of at least 4 decades.
Anyways in the current situation where global market is experiencing a meltdown, where the arrow is always diving down in the share market, people are apprehensive towards any kind of investments. Organizations are in a cost cutting spree be it in production or size of the organization, management or employee structure, the picture remains sadly the same – Cost cutting, down sizing.
But how can that help any organization or any brand in the long run remains to be seen. Anyways when companies are cutting down their marketing budgets & marketing activities, how in this troubled market a brand can make itself acceptable to its target audience? How can a brand make itself an obvious choice for consumers than its competitors or what will make a brand feel safe when people are very apprehensive, more so when companies are stressing on immediate business?
I think in this volatile market consumers are willing to go for those brands they trust & have faith in its output. No one would like try or acquire any brand they doubt its value proposition or brands that they do not believe in. So only those brands which have the confidence of its consumer can feel safe or can at least look forward to sail through this troubled time. And I guess here lays the answer to the question that most organizations are looking forward to, these days – How & what would make a brand safe and acceptable to the market? I think organizations should concentrate more towards gaining its consumers confidence & faith rather than cost cutting or reducing its branding activities. Any organization should be extremely committed & focused towards gaining the confidence & trust of its consumers and standing out from its competitors. One should increase its marketing & branding activities, by reaching out to its audience more frequently than ever before, letting its audience know how different & better it is than others, telling them its values and benefits. It will also make its consumers feel better and safer as they consider only one aspect more than ever before - Values they are derive from the brand, against their investment. A regular activity most certainly ensures the brand to be present more in the consideration set of consumers, there by increasing its recall factor and greater chance of acceptance. By reaching out to consumers regularly and telling them its benefits, its technological superiority, its values, by telling them that the brand understands what its consumers like, desire & prefer, can also give an edge over its competitors psychologically.
Hence in the present scenario, where the market slumped to all time low, where investments have fallen down, building the Brand & gaining the trust & confidence of consumers should be the most logical choice for any company and for doing all these one should not shy off from marketing & brand building activities, rather should concentrate in such activities than ever before.
As more money flows into online advertising, there has been a renewed debate about the value of ad networks. I personally have no doubt that leading “horizontal” ad networks, such as Tyroo,TribalFusion provide tangible benefits to both advertisers and publishers. Large ad networks aggregate and sell remnant publisher inventory; providing valuable revenue stream to many publishers, as well as convenience and scale to advertisers. But there are limitations to the horizontal model.
Vertical Ad Networks work as catalyst in the market. Reaching audiences rather than Inventory.
Unlike horizontal networks that collect a wide variety of sites from different categories into a network, a vertical network consists entirely of sites within a specific industry category. In our case, its travel, technology, business, news but it could also be healthcare, technology or even weddings. Ad networks that focus exclusively on one industry can create significant scale of a highly desirable audience across many strong publishers. These results in characteristics not found with horizontal ad networks, and significant benefits to both publishers and advertisers.
From the advertiser’s perspective, a vertical network can cater to its specific needs with a greater amount of expertise and intelligence, as opposed to purchasing an endemic “channel” on a broader network. With the vertical network, an advertiser can get scale and access to many great publishers through one source– making life easier for the already overworked media buyer.
A vertical ad network also brings intelligence to its advertisers.
“A vertical ad network brings reach, industry expertise and transparency to where the ad is running. Rather than having to develop relationships with many publishers who may not be experts at selling and managing digital ad campaigns, I can work with one company who knows what they are doing and who helps me deliver results.”
By Sunil @ 1:16 am