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by Satrajit Sen

When the concept of internet marketing was introduced in India, various digital marketing agencies held that measurability is the prime USP (unique selling proposition) of advertising through this medium.

This very concept of measurability has probably thwarted the growth of online display advertisements as many advertisers feel that this format of online advertisements cannot be measured and hence they prefer to use the online medium for lead generation activities, rather than to build brands.

Display advertising can be defined as another type of online branding that normally contains graphic information, apart from text, like logos or any other pictures. The advantage of online display advertising is that it makes use of static or animated pictures and media that may include audio and video elements.

Many feel that display ads can encourage a brand’s potential customer to interact with the advertisement and spend time engaging with the brand. But at a time when TV is seen as a perfect medium for carrying out a brand building campaign, online display advertisements in India probably have a long and hard way to go.

In an effort to gauge what the industry feels about the future of online display advertisements in India, AlooTechie spoke to experts who appeared to be a bit sceptical about the future of this format of online advertisement in this country.

“Display ads have been in India for almost 10 years now and it is the fault of the online ad industry that display ads have been side-swiped and overtaken by search ads and that too to a point where search is almost double the size of display. If the industry continues to market display ads in the present way, then it will be hard for us to grow beyond a certain level,” holds Mahesh Murthy founder and CEO of Pinstorm.

According to Murthy, display ads have been so far sold on a ‘silly’ metric called CPM (cost per thousand impressions) and the basics of ad selling were ignored.

In India there is a prevalent conception that an online campaign cannot be helpful in building a brand and hence online display advertisements are being affected. “Media planners think that brand building can only be done through TV and hence they go for search based advertisements on the internet. They fail to understand that internet is not a medium where one can carry on a campaign; rather internet is all about intercepting the audience 24×7 to make a purchase decision. This is the only reason why display ads are ignored in the country,” says Manish Vij, co-founder of Quasar Media.

“Without going for the click-based model, media planners should use some ad-serving tools and gauge the view-through traffic of a display ad. Unless they do it, display ads will not emerge successfully in the country,” adds Manish Vij.

Though display ads are yet to catch up the pace in India, the concept has been well accepted worldwide. “The concept of display ads around the world is changing. Roll-overs, road blocks and peel-overs are already in great demand over regular mastheads of websites across the world,” asserts Gautamm Mehra, head, search and affiliate, Ignitee. “India is also not far behind but online marketers should sell these benefits to advertisers and avoid falling for the ‘performance pay’.”

According to Navneet Kaushal, founder and CEO, PageTraffic, online display ads have not only benefited manufacturers but they have proved to be a lucky charm for advertising agencies as well. “The worldwide revenue generated from online display ads in first nine months of 2008 were $17.3 billion, which was greater than $15.2 billion of revenue generated in the previous year. This is evident that display advertisements are quite well accepted around the world and Indian internet industry, sooner or later, has to adopt this trend,” says Kaushal.

However, media planners seem more comfortable deciding their media budgets around search based advertisement models. “In the case of reduced advertising budgets, it always makes better sense for a media planner to utilize more efficient channels that include search, mobile and social media. Going by the way media buyers are looking at online display ads, we feel that display ads will consume significantly lower portion of the total Indian digital marketing budget in 2009 as compared to 2008,” says Vivek Das, business head, Ishir Digital .

“Display ads will need to be more interactive, and engaging than before in order to be able to deliver better. Contextual display advertising such as mashups are more relevant in the current scenario. Improvement in ad serving algorithms led by publishers upping the ante on digging deeper for demographics is of utmost importance,” adds Vivek Das.

It is believed that the global economic slowdown has not affected the online advertising industry too much as international luxury brands have been spending on online advertisements as advertising in the online medium is relatively cheaper than advertising in other media. Recently, Swiss luxury watch brand Tag Heuer unveiled a ‘subtle’ online campaign where one gets to see its prominent logo displayed besides a watch placed near the masthead of select web portals, including Business-Standard.com.

Experts feel that though this recessional period has not been too harsh on digital advertising industry, display ads have been neglected all throughout. “If marketed properly, display advertisements have a great opportunity in this country, but many marketers are yet to understand this and feel that traditional display banners will not work in the internet. And now, when the economy is going through a turmoil, it seems tough for display advertisements to come good in India,” says Amar Goel, founder and CEO, Komli Media.

Agencies like Pinstorm have created their personalized means of promoting display advertisements in this phase of global economic depression. “At Pinstorm, we are among the largest buyers of digital media in India and we have had to create a different metric called ‘cost per impact’ which helps us to buy display more accountably and sensibly. We urge display ad sellers to change the way they have always done things, if they want to survive and thrive after this economic downturn,” says Mahesh Murthy of Pinstorm.

“Unless media planners drastically change the way display ads are sold, publishers will be toast in this economic slowdown. An IMRB survey earlier predicted a 40 per cent increase in display ad revenues. We differ. We predict zero growth to shrinkage in this medium in this financial year. However, we think search will grow in this economic climate,” adds Murthy.

According to Gautamm Mehra of Ignitee, the recessional period has affected online display advertisements to a great extent. “Due to this recession, many publishers are forced to sell inventories at lower CPL (cost per lead) and thus end up earning 1/3rd than what they would have earned on CPM. They do this just to keep the inventory rolling or else they suffer having too much wastage of available inventory. This is because search budgets are usually eating into regular display inventory every single day and hence publishers should be more careful with display inventory,” adds Mehra.

Navneet Kaushal of PageTraffic feels that display ads can prove as a product’s affordable branding solution even in the current recessional phase. “When the entire world is suffering from economic slowdown, it becomes essential for companies to keep promoting themselves in order to maintain a brand rapport. As lower prices will attract more advertisers, the online publishers might have to do some adjustments with their profit margins,” suggests Kaushal.

Travel website MakeMyTrip.com had recently carried out an experiment to assess whether online display advertisements have any impact on a brand’s performance and hence pulled off all its display ad campaigns from other websites.

“The experiment was on for a few days and we saw that our traffic and transaction on the website went down. Even our search traffic was affected a bit,” says Sachin Bhatia, co-founder, MakeMyTrip. “Then, when we took the display campaign back live, surprisingly a lot of direct traffic began to come on the site. That made us believe that display ads are meant to give an identification of your brand in the consumer’s mind.”

According to Sachin Bhatia, display ads help in creating the recall value of a brand in the consumer’s mind and hence can be a useful option for brand building. He feels that in this recessional period brands will prefer the search based option of online advertisements, but if marketed smartly, display ads can definitely be successful in India.

“Brands have to make it clear what they want from the advertisement. If they want branding, they might well go for online display ads and if they want transaction and performance, search based advertisements would be best suited. So every medium has its own viewers and display also has its viewers. But the problem is unless display ads are marketed and projected smartly, no one is going to look at that,” adds Bhatia.

It’s quite evident that the Indian internet industry has so far failed to leverage the benefits that display advertisements have to offer. Even the most conservative clients such as political parties, who are keen to build their brand image and thus go on spending heavily on banner ads, are coming to internet but through various other mediums. If marketed well, these new clients could have been attracted towards online display advertisements.