Mktg - Companies latch on to social media advertisements

Shivani Shinde / Mumbai October 9, 2008, 0:42 IST

Presence in the digital space is emerging as a crucial strategy for creating brand awareness and reaching out to the young.

The current slowdown and the resultant cut in advertisement budgets is making companies look at other options like the digital space which has shown 100 per cent growth at the expense of traditional media.

According to the 2008 Ficci-PwC report, the advertisement industry in 2007 was

Rs 19,600 crore. Online advertisement grew by 69 per cent year-on-year and touched Rs 270 crore in 2007 and was the fastest growing segment. The segment is expected to reach Rs 420 crore by 2008 and grow by 32 per cent over the next five years. Of the Rs 270 crore online advertisement market, the social media advertisement market is just about Rs 20 crore, again the fastest growing. The exact percentage growth is not available.

Social media optimisation (SMO) or advertisement makes use of online platforms like social networking sites, blogs, podcasts, widgets and RSS feeds.

An agency created an online presence for its client — a leading telecom services provider — by having an account on twitter, and posting close to 20 videos on YouTube. The videos received 100,000 views in the first month. The numbers went up to 200,000 in the next month. Each video had a viewership of 5,000-6,000.

Jet Airways, too, had a target campaign for promoting its special fare for students. Blogs, forums and communities, sites like Facebook, Orkut and Yahoo Answers among others were used. The conversion rate for Jet Airways from visitor to booking, from social media was higher than the conversion rate from search engine marketing (SEM).

Bollywood has also taken to this medium. Rajshri Media, the web and mobile arm of Rajshri Group, used the SMO route for the internet release of its movie Vivaah. The company had 100,000 views of the trailers in the first two weeks.

The cost is low as compared to a similar campaign on TV or print. The one-time cost of creating an online presence could be between Rs 30,000 and Rs 80,000 and the retainer fees starts from Rs 1 lakh per month and can go up to Rs 2 lakh.

Amardeep Singh, vice-president, Interactive Avenues, said: “SM sites has 53 per cent share of total online users & 11 per cent share of total time spent online. It places SM just below email & search in terms of usage and therefore marketers cannot ignore it.”

However, social media advertisers feel it is still a push-based mechanism.

Rajiv Dingra, Lead Consultant, WatConsultant.com, said: “In India we have media companies running technology applications. And social media is driven by technology use. Instances being Google and Yahoo. So the traditional media houses can get users to watch videos, but cannot engage the viewers. For that they need people who cater to this segment.”

One of the reasons for the slow adoption of this media apart from low penetration of internet and lack of understanding among companies, is that traditional media houses cannot cater to this audience as they do not have the skills. Mahesh Murthy, founder and CEO, Pinstrom, said: “Digital marketing needs a different set of knowledge and skills — from media knowledge, to knowledge of technology and ad options to an approach that is not ‘do-it-and-forget-it’ but ‘do-it-then-optimise-it-forever’.”