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by Leslie D’Monte
INTERNET: Meet the new kid on the block that promises advertisers better returns on advertising.

Precise figures are hard to come by, since search engines have Kerberos (the three-headed dog that is said to guard the gates to Hades, the Greek underworld) to guard their data.

However, the Internet and Mobile Association of India (IAMAI) and Pinstorm, a search engine marketing company, recently managed to ferret information which indicates that Search Engine Marketing (SEM) in India is a rapidly-growing sector.

They are not exaggerating. Consider these figures — over one billion searches a month; over 300 million searches with ads on them; almost 5 million clicks on ads every month; and Rs 70 crore online ad spend by Indian companies (not those of Indian origin, but ones with operations here, so ebay.au would not fit this bill).

The report has estimated the annual ad spend of Naukri (jobs), 99 acres (property) and Jeevansathi (marriage) — all part of the Naukri group — to be around Rs 10 crore (the highest of the key SEM players in India).

eBay would come next with a spend of around a little over Rs 9 crore, Monster and Jobsahead come third with around Rs 6.25 crore ad spend. The report qualifies these figures by stating that these approximations are based on today’s costs.

While general annualised online ad spend would be around Rs 23 crore, retail e-commerce accounts for around Rs 19 crore; jobs, around Rs 17.5 crore; travel, a little over Rs 17 crore; and banking/finance, Rs 14.5 crore.

Citibank, HSBC and ICICI Bank dominate the banking/finance sector spends, with Rs 2.7 crore, Rs 1.1 crore and Rs 9.2 crore respectively.

The travel sector ad spend is dominated by Yahoo! Travel (around Rs 1 crore), Lufthansa and MakeMyTrip. Travel sites routinely buy and deploy over three million keywords each on SEM campaigns.

Technology is dominated by HP — around Rs 2.5 crore, with Dell tailing at Rs 12.5 crore, and Siemens way behind at around Rs 5 crore. As for retail, eBay takes the cake with nearly Rs 9.5 crore as ad spend.

The interesting part, though, is the Pinstorm Search Maximiser Index (PSMI), which is a way of measuring if a campaign is over- or under-performing (with performance defined in strictly technical terms).

“We compare the clients’ share of spend with his share of searches,” says a Pinstorm spokesperson. Average performing campaigns score a zero; under-performing ones get close to -1; and outstanding ones score close to +1.

The index shows campaigns for Futurebazaar, Google, Zodiac Online,v Shaddi4ever and Fropper to be not-so-beneficial. Campaigns for Match India and Yahoo, however, score better on the index.

Yet, such online metrics are not without their sceptics. No SEM user can ignore terms like “cloaking”, which refers to the hiding of links so that you’re selling only the page rank, and “click fraud”, the illicit manipulation of keyword-based advertising metrics involved in pay-per-click or PPP deals.

These deals aren’t cheap anymore either. Average PPC costs have increased 37 per cent from 2005 to 2006, according to Doubleclick.

SEM will also have to put up with the “distrust” factor — up to 85 per cent of searchers say they “tend to ignore the paid listings”. And 87 per cent of commercial clicks take place “on the natural (not sponsored) search results”, according to Jupiter Research.

However, even though it’s a new channel to many companies, it is changing the way that many advertising agencies do business. It simply cannot be ignored any longer.

SPONSORED SIFTING

With over 100 billion web pages, scrounging for meaningful data can be quite a task. But it’s the top 10 or 20 results that matter.

Pinstorm studies indicate that up to 40 per cent users on any search term typically click on the sponsored links instead of the natural results. This is why paid search or Search Engine Marketing (SEM) is catching the attention of advertisers.

SEM worldwide is estimated to be a $14 billion business. Not surprising, since spending on Internet ads is expected to be around $29 billion in 2010 in the US alone, according to researcher eMarketer. In India, the sector is still in its infancy — around Rs 230 crore.

However, with Internet users predicted to grow to 42 million by March 2007 and 52 million by March 2008, SEM has a future you cannot ignore.

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by Aarti Razdan

Perhaps for the first time, the Indian ad agency flag is being hoisted on foreign soil. The dream of a traditional, brick-n-mortar Indian ad agency (yes, majority-owned by Indians, not Indian arm of a global agency network), of going global is finally being realised, albeit by a host of new generation agencies that focus on the digital and mobile space.

Search engine marketing firm Pinstorm, set up by Mahesh Murthy, is foraying beyond Indian, Malaysia and Singapore to set up offices in China, US, UK and Sweden and Australia by next year.

Internet promotions company, Webchutney, is expanding in the South-East Asian region, specifically Malaysia and Singapore by next month. Mobile marketing company, Mobile2win (owned by contest2win), set this trend by incorporating in Hong Kong (this operation has recently got bought over Disney), even before it opened its Indian office in ’03.

If internet knows no boundaries, why should ad agencies in this space have one, goes the logic with most players here. Anyway, all these internet agencies already work for global clients, either onshore such as mobile2win or outsourcing work offshore, much like Webchutney. Already, almost two-third of online agencies revenues is coming from global clients.

“It is much easier to watch trends in media online. Making an ad online is far easier than doing it in traditional media,” says Sidharth Rao, CEO & co-founder, Webchutney.

“We started with a global dream, unlike the typical, traditional agency where you set up a local office and then hire 40 people. We learnt the lessons from Infosys and Wipro and implemented it on ourselves,” says Mahesh Murthy, CEO of search marketing company, Pinstorm.

And its not that their office footprint are getting global – they even call their creative teams as ‘delivery teams’. These agencies have dedicated delivery team a la software firms that work closely with the business development/servicing teams of clients who may be sitting anywhere, Sydney to Stockholm.

No wonder interactive agencies are growing at a stupendous, over 400% per annum, and expect this kind of growth to continue for the next couple of years. Asia-Pacific markets are rich picking grounds for interactive agencies, owning to high internet penetration amongst consumers, coupled with a paucity of interactive players.

“Setting up our base there has no real cost advantage to us. It is the hunger to explore and tap these markets that driving us there,” adds Rao. Webchutney plans to bring in big ticket venture capital funding in the next six months to fund its global expansion plans, with a strong base in West Asia.

The fear of being gobbled up by big global players it seems is no dampener to these players. “If we don’t turn out to be multinational, we at least would like to be a pan Asian,” adds webchutney’s Rao. This global-local game is something that Alok Kejriwal, CEO, contest2win, has already worked out well.

Even though Disney has bought out the entire stake holding of Mobile2Win China, the Indian operations in Mobile2Win India remain independent. In fact Mobile 2Win India seems is still chasing the global run. It recently inked a deal with Freemantle (its partner for Indian Idol) to work on Philippine Idol.

“Its time for interactive agencies such as ours to not let geography limit us. The resurgence of the internet is just helping our global mindsets.”

Copyright © 2006, Bennett, Coleman & Co. Limited. All Rights Reserved.

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INDIA is emerging as a lucrative destination for online advertisers on search engines. According to a study by the Internet & Mobile Association of India (IAMAI), as many as 65m people use search engines in India, the market for which is estimated at Rs 236 crore. India still forms only a fraction of this big opportunity, which is $10bn globally and is expected to touch $23bn in the next four years.

“Search engine marketing (SEM) is catching up with advertisers because it helps a company reach a consumer when he is actually looking to buy something, unlike media ads, which may not reach the prospective buyer,” said Mahesh Murthy, CEO, Pinstorm, a Mumbai-based company which writes ads for companies who sponsor on search engines.

Globally, while there are 6,50,000 advertisers who use search engines, India has only 41,000 such advertisers, says the IAMAI study.

The advertising business on any search engine is a complex one. Companies bid in real time to book space on the first page of a result, Thus, it is not necessary that if you see a company’s ad on No 1 slot, the same would be there if you visit the page the next time. Also, the decision of choosing a search engine depends on reputation ranking, which, in turn, depends on global brands endorsing a search engine, said Mr Murthy.

The biggest myth probably in the SEM is that most of internet surfers don’t click on sponsored links. But the IAMAI study claims that sponsored links are clicked around 5m times a month. The supporters of SEM claim that the click-through rate, which is the number of times an ad is clicked, is quite high, at 0.62%.

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by Devina Joshi

Internet advertising is gaining a large share of the advertiser’s spend, and search marketing has a lot to do with it. According to a study in the US, Internet ad revenues will touch $ 18 billion in 2007, and with the growing popularity of search marketing, the advertiser’s dependence on graphic ads/banners will reduce dramatically. In fact, at the IAMAI Search Engine Marketing conference held in Mumbai yesterday (September 26, 2006), Rajiv Prabhakar, head, marketing, Sharekhan, disclosed that almost 50 per cent of his company’s marketing budget is allotted to the Internet, and 50 per cent of those budgets are invested in search marketing.

Other facts from the US are encouraging, too. On an average, Internet users use 2.4 search engines, with the average number of search results per query as high as a million. Abraham Thomas, director, Internet marketing, eBay Inc., further revealed that the average number of words in a search query is 2.6, which means that Internet users are becoming more specific in their searches, a result of low patience levels. “So, a person will probably key in ‘women’s shoes’ instead of simply ‘shoes’, which wasn’t the case earlier,� Thomas explained.

He went on to make a comparison between natural search and paid search (sponsored links, for example). “While paid search involves high risks and high returns, marketers shouldn’t ignore the benefits of natural search,� Thomas said. “A good balance of the two is necessary.�

Natural search is the core offering of any search engine, so it is important to invest in it, too, he said. This can be done by altering the content on one’s website to make sure it shows up on the ever important first page of the search engine results. He gave the three-step eBay example, explaining how natural search can be best used. The first step of the ladder is ‘keyword generation’. A marketer needs to link certain relevant keywords with his site, so that when the surfer searches for that word, his site is thrown up.

“Introspection in this regard helps,� Thomas said. “A website owner must first analyse what it is that visitors surf the most on his own website. This will help him along.�

The second step is ‘trafficking’, in which creative and landing page optimisation are highlighted. When a surfer lands on the website after using a search engine, he is sometimes taken to the home page of the site. “That is okay, but an even better option is to ensure that his landing page is a relevant one, where the information he is looking for is present,� Thomas added.

Thirdly, ‘monitoring’ is important, including constantly updating keywords. “Pull out those you’re losing money on,� Thomas advised. He also cautioned those present on ‘spam practices’. A website owner must ensure his site has unique, good quality content, which should not be duplicated as far as possible.

Further, the same keyword should not appear several times on the same page of the site, just so that it throws up during a search. “This kind of keyword spamming can result in that site being blacklisted by search engines,� warned Thomas. Further, URL structures should be kept short and page re-directs should be avoided.

While Thomas was gung-ho about natural search, Sharekhan’s Prabhakar was of the opinion that paid search yields definite results, particularly lead generation, for his company. “We have always preferred search marketing to other forms of online advertising. After all, people who come looking for specific information offer better scope for conversion,� he said.

Ashok Lalla, director of Internet marketing, Taj Hotels Resorts and Palaces, disagreed with Prabhakar’s views on paid search. According to Lalla, paid search does not guarantee a win situation because search marketing is an unpredictable game. “Search engines are like bazaars; one always gets more than what one asked for,� Lalla quipped. He also pondered over the theory that search marketing might even build brands; if a surfer becomes loyal to a site as a result of search marketing, then nothing like it.

However, Thomas of eBay felt it was too early to say that search marketing could be leveraged to build brands. “Search marketing is not a vehicle for branding; banner ads can do that,� he said. “Search marketing is more about immediate return on investment.�

The session was moderated by Sreekant Khandekar of agencyfaqs! and the event was organised by Pinstorm and agencyfaqs!

© 2006 agencyfaqs!

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Bibhu Pattnaik

New Delhi: Online marketing business is galloping at a higher rate in India. Keeping pace with the international market, Indian search engines are undergoing a phenomenal growth.

The search engine marketing business is a $10 billion industry worldwide.

According to a study by Internet and Mobile Association of India (IAMAI) in association with Pinstorm, India alone produces more than half-a-million searches a month. The study puts light to the evolution and growth of search engine marketing in India.

The study found that over 40,000 marketers are using this platform to capture the market share.

That’s not all, the number is growing at a higher pace as people research choices, product details and prices for every sort of buying decision – from travel to banking to insurance to education to even a film career.

22 of the top 50 and 37 of the top 100 search advertisers by keyword volume are firms with Indian operations.

So how search engine really works, how it increases the visibility of a website and how a particular client is charged?

In Internet marketing, search engine marketing (SEM), is a set of marketing methods to increase the visibility of a website in search engine results pages (SERPs).

Unlike other advertising media, SEM allows the advertiser to reach exactly their target audience. In other words it helps in fine targeting its audience on a global scale at a minimal cost.

The process of SEM involves bidding for the right words at a cost on major Search Engines such as Google, Yahoo, MSN, Baidu etc.

Search results are better with greater number of key words. The number of keywords bid could range from around 500 to 1 million or more.

These words are then used for writing ad copy that is visible in the Sponsored links when the keyword is searched.

The client is charged either through Cost per click (CPC), where the client is charged only when a potential customer clicks the ad or through Cost per Impression (CPM), where the client is charged for every 1000 impressions.

Every search is an expression of consumer intent. Marketing will veer around to this mode of communication because one is able to segment finely – a typical client effort may have two dozen or more campaigns and strategies – only advertising to stated consumer intent instead of shooting in the dark.

As traditional media increasingly fails to deliver with precisely targeted segments, online search will increasingly become the prime media weapon in a marketer’s arsenal for its sheer ability to target and deliver to an interested consumer.

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