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An ecosystem of companies that optimise and market search on the Internet is making its presence felt in India, says Vinita Gupta.

In the bad old days, before the ubiquitous Internet search engine was invented, finding information on the Net involved visiting portals with their directory structure of links. Today, search engines such as Yahoo and Google scan and index millions of pages, permitting you to fine-tune a query and get relevant information in a jiffy.

According to a recent Internet in India (I-Cube) report released by the Internet And Mobile Association of India (IAMAI) in association with IMRB, search is the primary application for 32 percent of active Internet users.

Imagine that you are the owner of a business. When a potential customer keys in a query on a search engine, one of three things happens: your company’s Web site (which has the relevant information) comes up, or it doesn’t, or your biggest competitor’s Web site might pop up first. If your company is not even listed among the top three results of a search engine (such as Google or Yahoo) it could have an adverse impact on your business. That’s where search engine optimisation (SEO) firms come into the picture.

Survey results

Here are some key findings of The State of Search Engine Marketing in India study.

  • IAMAI estimates that there are 37 million Internet users in India as of September 2006. This figure is expected to grow to 42 million in March 2007 and 52 million by March 2008.
  • Search advertising aimed at Indian users is now estimated at Rs 230 crore. Of this, about a third, or Rs 70 crore, is spent by Indian companies alone.
  • Categories of advertisers that have invested massively in search include technology companies, retail and e-commerce firms, job sites, the travel and hospitality business, and online portals.
  • Search engine marketing worldwide crossed the $10 billion mark in 2006 and is on its way to hit $23 billion by 2010.

Search engine marketing

“India produces more than a billion searches
a month, and that number is growing as people research choices”

- Mahesh Murthy
Founder & CEO
Pinstorm

SEO firms are specialists that tweak Web pages and make a host of submissions to search engines so that the next time a potential customer runs a search on Google your company will appear on the top of the rankings for the words used. This is known as search engine marketing (SEM), and it has become one of the most efficient methods of online advertising. It has been adopted by numerous companies around the world. SEM involves a set of marketing methods to increase the visibility of a Web site in search engine results.

IAMAI, in association with Pinstorm, recently released a study titled The State of Search Engine Marketing in India. This study shines a light on the evolution and growth of SEM in India. It found that over 40,000 marketers are using this platform. Mahesh Murthy, the Founder and CEO of Pinstorm states, “22 of the top 50 and 37 of the top 100 search advertisers by keyword volume are firms that have Indian operations. India produces more than a billion searches a month, and that number is growing as people research choices.

Unlike other advertising media, SEM allows an advertiser to exactly specify and reach its target audience. The process of SEM involves bidding for the right words at a cost on major search engines such as Google, Yahoo and MSN.

According to the report, SEM is now a $14 billion business (Rs 63,000 crore). Over 99 percent of Google’s revenues come from selling ads, and it has quickly overtaken online display advertising as the preferred route for online advertisers.

Net vs Print/TV

There are a number of positives to SEM in terms of targeting the right audience which cannot be achieved through newspapers or TV. First, the ads are targeted only through words that users are searching for, and you can choose the exact set of search words to have your advertisement appear on so there is little or no wastage in terms of reach. Second, an advertisement is shown right at the moment and on the page that the user is searching from, so there is no wastage of frequency either, unlike on TV, where the same ad sometimes get repeated so much that viewers start mentally tuning it out.

To advertisers, search comes closest to delivering the Holy Grail of targeting: getting the exact target audience as determined by their search and demand patterns, and getting them only at the time when they’re looking for information and choices to make a purchase decision. Not surprisingly, search as an advertising medium is growing at 35 percent a year.

Search results are better with a greater number of keywords. The ‘long tail’ theory holds that the greater the number of relevant terms you bid on, the lower the cost of acquiring results. While typical advertisers bid on 50 words or less, experts bid on upwards of a million search terms in their online campaigns. A client is charged based on cost-per-click for all clicks and visits generated through a search engine, or on a cost-per-acquisition basis where the results paid for are either leads, enquiries or sales.

Some search specialist firms have moved to a pay-for-performance model, where they offer a flat price to a client for a result after using their technology to arbitrage and buy clicks at a lower cost.

With all this, search marketing is still an evolving medium. The future will have video, audio and other innovations within the pay-for-performance format.

© Indian Express Newspapers

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Ramya Ramamurthy
CNN-IBN

More than 2 lakh people watched the video of the first rock band to make music over the Net.

Google now wants to make users pay for the videos they watch, by introducing contextual video advertising, but this may take a while to reach India, where Google has only recently appointed its reseller agents.

Companies like Next Gen publishing will buy media on Google Adwords for local clients, but internationally Google can pick from these options.

Says VP Next Gen Publishing Mandeep Singh, “When we talk about visual, either it could be topic based or it could be classified and then it can be sponsored or you never know, google might like to use a contextual search ad. For example if a child gets hurt and a band-aid ad appears, then that could be wonderful.”

But that’s easier said than done. Google will first need to ensure all offensive clips are removed, then classify the clips which have so far been manually tagged. It will also have to match clients with clips. And the advertising itself will have to be tailormade for the Internet.

Says Founder and CEO Pinstorm Mahesh Murthy, “When you are buying Youtube, and when you have thousands of videos, most of them user generated, plainly funny – a dog fighting a cat or a person eating off a live rat – its really hard to put that in a context and say, ‘You know what do I show in that?’”

But Google may just have a googly up its sleeve. It already has content tie ups for Google video, and it could move away from the click through model and charge users and clients per view.

The other option is to tie up with broadband providers to stream the high bandwidth Youtube site exclusively. Even so, experts say, breakeven in three years is a tough ask.

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Asit Ranjan Mishra

Internet marketing has arrived in India and how. A recent study by IAMAI-Pinstorm puts the size of Search Engine Marketing in India at Rs 236 crore. This, according to speakers at a workshop on ‘Marketing through Internet, mobile and search engine’, offered a tremendous opportunity and could yield high ROI. The workshop was jointly organised by media school FMCC and Media Estate.

Speaking on the occasion, Rahul Nanda, VP, WebChutney, said, “Brands are trying to engage with customers online through search marketing, viral marketing, display advertisement, mailers, microsites, communities and blogs. Search marketing clearly has become the hot favourite. Google’s search revenue is 60 per cent of its total revenue, around $1.3 billion. 40 per cent of its revenue comes from AdSense itself.”

“To make SEM work for you, one needs to select relevant keywords and group by goals, test messaging and keywords from time to time and revise campaigns keeping what is working and use reporting tools to measure results,” Nanda further said.

Mahesh Murthy, Founder, Pinstorm, said, “The way we have known advertising is basically interruption marketing. The problem with such advertising is that viewers think it is the price to pay for their entertainment. So they ignore the advertiser and thus the advertiser loses relevance and respect.”

Comparing between interruption marketing and contextual marketing, Murthy said, The former is where the advertiser focuses on the target audience, and interrupts them to deliver his message. The latter is where the advertiser focuses on the target audience when they are in the right context and frame of mind, and then delivers his message.”

Contextual marketing, especially driven by search and content, has grown to Rs 70,000 crore globally in just three years. In India, spends have reached nearly Rs 236 crore in just two years. Contextual ads get around 5 million clicks a month in India.

Speaking on the usefulness of Web Analytics, Gopika Dawar, Senior Analyst, Quasar Media, said, “Web analytics allows one to take informed decision rather than gut feel decision.” Calling it Performance Marketing, Dawar said, “Web analytics helps one to know the details of the user profile – like who they are, where they came from, what they look at, which country they belong to, length of their visits, etc.”

“Different types of sites like informational, service and support, lead generation and retail have different business goals and hence require unique analysis capabilities,” she added.

Various web measurement tools like Google Analytics, which is free, and others like NetTracker, Hitbox and Web Trends are available in the market for the same purpose.

Speaking on business application of blogs, Rajesh Lalwani, an independent consultant, said, “Blogs could be used for conversatioinal marketing. Many CEOs like Jonathan Schwartz, President, Sun Microsystems, have taken up writing blogs to engage with their stakeholders and others, like Microsoft, have even used their employees’ blogs to give it a human face and soften its image.”

Emphasising on the need of blogs in today’s world for marketing purposes, Lalwani said, “Advertising will continue to drive sales, media relations will drive visibility, however, Blogs bring transparency, a first-hand perspective based on participation both from the company and the consumer.”

Giving the now-famous example of the Dell disaster, he said that marketers needed to engage with bloggers and keep a track on what they said on the blogsphere through blog search engines like Technorati.

Lalwani, however, also pointed out that using blogs for marketing wasn’t necessarily about setting up a blog. “You may not have one but may still use the blogosphere to your advantage,” he said.

© exchange4media 2006

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Neha Kaushik
Preethi J.

Advertisers are scrambling to buy keywords to get themselves noticed by Netizens in the country.

It’s the only place where advertisers pay and even try to outbid each other to stake claim to phrases coined not by them but by the target consumer.

With an increasing number of Indians logging on to the Net and Googling already figuring among the favourite hobbies of many a netizen, advertisers in India are waking up to the opportunity in search engine marketing.

Sample this. Indians conduct about one billion searches every month. Out of this, 308 million searches resulted in sponsored links shown and there are over 4.8 million clicks on sponsored links by Indian users every month. If the figures are anything to go by, search engine marketing in India is rapidly emerging as a favoured medium of advertising.

And according to Mahesh Murthy, Founder and CEO, Pinstorm (which, along with the Internet & Mobile Association of India, recently came out with a report on search marketing in India), more and more advertisers are taking note. He gives an example of a leading foreign fashion brand which is entering India and has decided to advertise only through three media – the Internet, mobile marketing and banner ads! A strategy which the firm felt would be most apt to reach out to its target consumer.

Incidentally, on an annual basis, total advertising spend by all advertisers targeting Indian users is about Rs 236 crore, out of which Rs 72 crore was the spend by Indian advertisers targeting Indian users. Further, there are now about 40,000 advertisers targeting Indian web users!

Here is how it works: Every time you run a search for a keyword/s, the search engine throws up a number of results (at times several millions), the order of which is determined by a number of factors including reputation ranking. As advertisers can do little to alter that ranking, it is the sponsored results column (usually on the top or top right of the page) they are concerned with. Thereby advertisers pay for their ads to come up in the sponsored results column every time certain words or phrases are searched.

Suppose you are searching for a `cheap hotel in Goa.’ A search may throw up sponsored results by online travel sites, hotels in Goa or by other travel-related firms. The order in which the sponsored results come up depends on which advertiser has bid the highest amount for that specific keyword/s.

Some popular keywords in the Indian online advertising industry are `cheap,’ `discount,’ `flight,’ `MBA,’ `laptop’ and `home loan’ (also internationally popular). A combination of two words, such as `cheap flight’ or `cheap hotel,’ is also bid for.

Keywords are priced anywhere between Rs 2.50 and Rs 2,500 ($50) in India. Some of the more highly bid keywords, with their current bids for a top position, are: Discount hotel Rs 95.40 cost-per-click, stock broker Rs 81.90 cost-per-click, cheap hotel Rs 78.75 cost-per-click, flight to Mumbai Rs 72 cost-per-click, MBA Rs 58.95 cost-per-click, laptop Rs 53.10 cost-per-click, cheap flight Rs 52.65 cost-per-click.

According to the IAMAI-Pinstorm survey, the average number of keywords bought by a brand is 42. Travel sites, the most competitive online advertisers, routinely buy and deploy over three million keywords, the study reported. Many individual Indian advertisers bid on up to five keywords to ensure traffic flows into their site.

At present, the largest advertiser in India using this medium is naukri.com (along with its sister portals 99acres and jeevansathi), which spends about Rs 9.7 crore per annum.

The pricing of keywords is directly proportional to the number of advertisers, says Vinod Nambiar, Director (Global Delivery), Position2, a US-based search and online marketing firm with an office in Bangalore. It’s an open supply-demand based system, much like the stock market, he added.

On Yahoo’s recently launched search engine marketing platform, the keyword `travel’ had a highest bid of Rs 55. Interestingly, `hote’ also had been bid, for Rs 5.5! The fact that a typo could dish out an ad is an example of the amazing flexibility of the Internet! `Books’ was bid at Rs 27 and `flight’ at Rs 48. `Bangalore real estate’ was bid for Rs 46, while `Delhi real estate’ went for Rs 28.

The more the number of takers for a particular keyword, the higher the price.

According to Rishi Behal, Director (Search and Strategic Alliances), Yahoo! India, there are currently 19 million unique Indian web users per month, out of which 64 per cent conducted searches at an average of 42 searches per user. The number of unique users is expected to increase to 50 million by 2010, he adds.

But certainly there is no risk of keywords or keyword combinations running out. According to Murthy, over half of the searches on a search engine have not been searched before so companies just need to keep adding to the pile of keywords to stay up to date.

The biggest spenders on keyword advertising in India are the retail, e-commerce, travel, and banking and financial services sectors. The largest advertisers in the banking/financial sector are Citibank, HSBC and ICICI; Yahoo! Travel, Lufthansa and Makemytrip in the travel segment; and ebay, Kijiji and Zodiac in the retail category.

Further, the number of keywords a company bids for can range from a handful to several thousands. For example, social networking site Fropper.com bids for 12-15 keywords, ranging from internationally used `dating services’ and `friendship’ to a more local combination of `Mumbai dating,’ says Raj Seth, Product Manager, Fropper.com. The firm has invested in keyword advertising on all three players in the online advertising arena: Google, MSN and Yahoo. Twenty-five per cent of the people who search Google for these words visit Fropper, says Seth.

Besides offering keywords for bidding, search engines also use other tactics to ensure highest earnings, says Nambiar. The search engine would review your ad for its performance. You could be charged a lesser price for the keyword compared to what your competitor, whose campaign performance is bad, has bid on for the same word. This is on the basis of the conversion rate – as the search engine earns more from your better ad, it offers you a better price. In other words, there is still scope for creativity in this form of advertising as web users may not necessarily click on the first ad in the column but the most eye-catching one. Trading portal Sharekhan, for example, advertises in Gujarati on English search results in order to attract clicks.

Search engine marketing is growing by leaps and bounds in the country as it is worldwide. In fact, search engine marketing globally crossed the $10-billion mark in 2006 and is on its way to hit $23 billion by 2010. Though the Rs 230-crore figure for India looks pale in comparison, one must remember that for an industry which barely got off the ground a couple of years ago, this is a huge leap.

Copyright © 2006, The Hindu Business Line.

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Rediff, a general-purpose India portal, has launched a Hindi version of its instant messaging service.

The IM service launched by the portal Wednesday, known as Rediff Bol (the word means “speak” in Hindi and rhymes with “goal”), is an extension of Rediff’s Indian-language email service, which covers 11 Indian languages.

Local-language email is also available from Webdunia.com, the most popular Hindi language portal, as well as from Hotmail, Sify, and Rediff.

Local-language web sites, mail, and instant messaging—all web-related traffic builders—are hot in India’s online world.

It took six years in India before Microsoft launched MSN portals in several local languages in September of this year, but the move prompted rival Yahoo to announce it would do the same in a few weeks.

The homegrown portals Sify and Rediff already offer content in some Indian languages, while Indiatimes is happy with its English site.

Microsoft is even trying to build a community of developers who will make Indian-language computing easier so larger numbers of non-English-speaking Indians can use PCs and hence use the company’s Office desktop software, which is now available in a few Indian languages.

If MSN took time to reach out to the masses, there was a sound business reason: low rates of Internet connectivity. But an online revolution could be around the corner.

Computers can be bought for as little as the equivalent of $210 in India, broadband rates have plummeted to about $6 a month, and content is finally getting interactive. No numbers are yet available on how popular Google’s Indian-language search is.

Raftaar, a startup that’s experimenting with its own search system, says it’s getting a few thousand visitors a day, without any advertising.

India’s leading matrimonial portal, JeevanSaathi.com (meaning “life partner”), hit upon a winning strategy with its Hindi version. Now a database of potential brides and grooms is available to parents looking for an ideal match for their son or daughter. Who said tradition can’t be kept up by modern means?

Rupees Clinking

Smart companies like Google, Microsoft, Rediff, and Sify can hear the sound of cash, even if it’s in the future. Convert some of the educated Hindi-speaking millions into Internet and e-commerce users, and you get about half of Europe’s population.

The largest-selling English newspaper, with sales of over 10 million copies a day, trails at No. 11, behind several Hindi, Tamil, and Malayalam newspapers.

Dainik Jagran, the No. 1 paper, sells over 21 million copies daily and prints only in Hindi. National readership surveys say there are over 300 million readers of Hindi newspapers, and the numbers are growing.

The possibilities of e-commerce are tempting too. Google actually has a team targeted at businesses that have never advertised on the web. Yahoo India has launched its search marketing service in India. And eBay holds training sessions in one-horse towns for small entrepreneurs to sell their wares on the Internet.

Search Marketing Opportunities

A study by the Internet and Mobile Association of India, along with the search marketing consultancy Pinstorm, pointed out last week that Indian online users did 1 billion searches per month. Total annualized spending by advertisers targeting Indian users reached $52 million.

That number might seem small until you realize there are only 37 million Internet users in India. The user base is expected to grow to 42 million by March 2007 and to 52 million by March 2008.

The study had other interesting findings. Searches by Indians that bring up sponsored links have reached 308 million per month. Total clicks on sponsored links by Indian users amount to over 4.8 million per month.

The survey also found that small metropolitan areas and towns are increasingly embracing the Internet and account for 25 percent of all users in India.

“The next round of growth will be driven by new and innovative applications such as blogs, P2P, video on demand, and online gaming, while the old favorites such as email, chat, and IM will drive first-time users to the medium,” said Mohan Krishnan, country manager (eTechnology Group) of IMRB, a market research firm.

With Web 2.0 companies the flavor of the season, the day isn’t far off when a social networking site draws users from across the globe, all writing in their own languages, but perfectly understood by each other because of the translation magic hidden in the heart of the software.

Contact the writer: KShah@RedHerring.com

© 1993-2006 Red Herring, Inc. All rights reserved.

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