Download Online Promotions and Advertising in the Indian Context

Online Promotions and Advertising in the Indian Context
Dr. KALYANI RANGARAJAN
Management
Bangalore University
Alliance Business Academy
19th Cross, 7th Main, BTM 2nd Stage, NS Palya,
BANGALORE 560076
INDIA
Abstract: The web is increasingly being used as an element of the marketing promotional mix, as a
medium for specialty product distribution and as a method of streamlining orders. A presence on
the web is a must for conducting business in today's environment. This paper assesses the efficacy
of the various online promotional and advertising methods currently in vogue. Internet marketing
is still at a nascent stage. It is not a panacea for everything but its power can not be underestimated
or underplayed.
Key-Words: Online promotions, Rich media Solutions, Web Banners, Opt-in-email, Click-thru,
Pop-ups and Pop-unders, Viral Marketing
1. Introduction
Promotion is one of the four pillars of the
marketing mix of an organisation. Depending on
the marketing situation, an appropriate
promotional mix is used to achieve an
organisation's communication goals. Advertising
is mainly used to create an awareness of the
availability and benefits of products services,
and existence of suppliers. Sales promotion is
used to encourage sampling and repeat purchase.
Merchandising and advertising are used to
establish and maintain a good corporate image.
Online advertising is used to attract users to seek
out more information about products and also to
help users to find a site that they may already
know about. The advertisers on the net have to
ensure the accessibility of the product / service
offer, whatever be the search engine or portal
they come across.
A common and widely used promotional
strategy is to create a website for one's company.
In this Internet era, websites are a key source of
online corporate information and promotion. The
Internet also offers marketers a very costeffective method of direct marketing via e-mail.
2. Online Promotions
The increasing use of the web as an element of
the promotional mix, as a medium for specialty
product distribution, or as a method for
streamlining order taking has created many
challenges. The number of web pages is
increasing exponentially, as businesses, both
large and small; seek to stake a claim in the
dynamic, ever-changing market place [1].
On line promotions are being increasingly used
by marketers, to rouse consumer interest and
action. The expenditure on internet-based
promotions is expected to increase to $14 billion
in 2005, up from $2 billion in 2001. The
compelling benefits of online promotions are:

Immediate consumer response: The
internet provides both a vehicle for
generating awareness and a platform for
2
taking immediate action, like entering a
contest, purchasing a product or signing up
for more information.
Reduced costs: The addition of an internet
component to an existing offline promotion
helps to reduce costs, by allowing advertisers
to efficiently re market to consumers.
Enhanced tracking / measurement
capacity: Promotions leveraging the Internet,
add a tracking and reporting dimension
which is not possible in the traditional off
line promotion. Besides, the Internet is
capable of measuring promotional
performance in real time, thus enabling quick
and flexible execution.
got used to banner ads and click through rates
(CTRs) are falling, targeted placement combined
with effective design are bound to yield rich
dividends for the consumer. Most major sites
prefer to sell cost per impressions banner ads,
though there are quite a few cost per click
advertising networks. The average click through
rate is around one percent. Most sites, accepting
pay per click advertising, put a lower limit of
two percent on the click through rate the
advertiser's banner must achieve. Traditional
brands have utilized banners and online
advertising to lift message association by 16
percent on an average [4]. Two types of banners
are, In- Banner and Expandable Banners
A core concern is related to the cost of customer
acquisition. A large amount of site traffic is
needed to generate sales. Only one out of every
200 surfers will click on an online ad. Out of that
one out of 50 will make an online purchase. A
recent survey by E-buyers.com revealed that 63
percent of online customers had been guided to a
retailer by email promotions, 38 percent by
banner ads, and 29 percent by traditional
advertising.
Appropriate promotional tactics will have to be
used, based on the customer’s stage in the
buying cycle [2].
Banners can be targeted through purchasing on a
site and purchasing at a particular time of day or
week. Banner ad campaigns can be rated by
reach recognition, click through, traffic quality
and cost. By 1999 banner advertising had
reached 1 percent of global advertising value.
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3. Rich media solutions
Rich media add an additional dimension to the
web experience, through the use of audio, video,
animation, and unique ad formats.Rich media
offer the benefits of interactivity, emotional
appeal, and increased banner branding
effectiveness.
The following rich media tools are available to
the online advertiser [3].
3.1 Banners
Banner ads are a prominent from of online
branding. Even though consumers have by now
3.2 Bots
The bot, also known as 'Web Robot', 'Virtual
Personality' and 'Virtual Assistant', is a software
tool designed to interact with customers and
answer questions. Using the bot technology,
marketers can provide customized information
about brand, product or service. This will help
companies to drastically reduce their CRM costs.
According to a recent study by Forrester
Research, the average live customer service
phone call at a support desk costs around $33 per
call, whereas the same issue handled by a
customer service bot costs only $1.17.
3.3 Buttons
Buttons are a form of banner ads that offer
greater flexibility in size and page placement.
Compared to banner ads, nonstandard buttons
and micro buttons are placed on the left, right or
middle of a page, allowing enhanced visibility
within certain page formats.
3
3.4 Video ads
Video ads stream audio and video content, and
help marketers to

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Engage and entertain consumers, through
game playing, moving graphics and drawing,
without leaving the current page.
High interactivity increases ad
functionality through such features as
integrated data capture system, instant email
delivery from the ad, live surveys and polling
with real time results, and printing directly
from within the ad.
3.5 Pop-ups / Pop-unders
Pop-ups are large ad vehicles that "Pop up" or
load and appear, when a user lands on a
particular web page. Pop-ups nowadays support
all forms of rich media like streaming video and
animation, and allow for high interactivity and
impact.
3.6 Top Layer
Using top layer rich media, creatives fly out of
the banner and spread across the web page. This
ad format uses consistent cross media messaging
like print, broadcast, and also outdoor creative
for consistency and cost effectiveness.
4 Other Online Marketing Vehicles
The other on line marketing vehicles that can be
employed are:
Contests, couponing, editorial sponsorship,
microsites, newsletters, opt-in-email, sampling
and sweep stakes.
4.1 Contests
Contests promoted online help marketers to
increase customer data bases, by requiring
entrants to fill out certain forms, besides driving
traffic to web sites or online purchase areas.
Contests promoted online can also drive offline
sales, by requiring entrants to collect physical
proofs of purchase or codes before entering.
Contests are a very good tool for enhancing
brand awareness and positioning, besides
creating consumer excitement.
4.2 Couponing
Online coupons take many forms. They may be
printable pages that can be redeemed offline or
special codes translating into discounts, when the
consumer makes an online purchase. Online
coupons help to stimulate incremental product
purchases, by identifying and segmenting
current, prospective and lapsed users and
delivering appropriate customized offers to each,
whereas off-line coupons only subsidize current
usage.
Coupons help advertisers track redemption and
obtain campaign effectiveness feedback in real
time. The level of security and fraud detection
available in the online medium is not possible
with offline coupons.
4.3 Editorial Sponsorship
Editorial Sponsorship is a means of aligning a
product or service with editorial content in order
to enhance the brand and build credibility. It
works the same way online, as in print /
broadcast media. Editorial sponsorships offer a
flexible combination of branding and advertising
elements, from logo integration to sponsorship
of a content block or text link.
4.4 Microsites
A Microsite is a one-page website containing an
individual advertiser's content. Microsites are
tightly focused on selling a single product or
service. Microsites offer the flexibility of linking
editorial content with an advertising message
that can be achieved by sending consumers to an
external website.
4
4.5 Electronic News Letters
Electronic newsletters are one of the most useful
vehicles for conversing directly with the
customers and establishing and maintaining
customer relationships, at minimal cost, as
compared to traditional direct mail pieces.
Electronic newsletters are used by companies for
driving subscribers back to the website, for more
information, conducting research and surveys
and enhancing brand awareness. [5].
4.6 Opt-in E-mail
E-mail marketing offers consumers a convenient
way to receive advertiser information on
demand, at their own pace, and in their own
place. A common form is opt-in-messaging,
which allows customers to indicate the
companies from which they would like to
receive information. Opt-in email systems
provide marketers the ability to customize
messages for targeted audiences, thus providing
a means of avoiding clutter on the web.
Email strategies can be used for raising
awareness, promoting products, consolidating
the customer, generating loyalty base, and
building the brand power [6]. Care should be
taken to ensure that the legitimate e-mail does
not look like spam.
4.7 Sampling
In an online context, consumers can be targeted,
based on purchase preferences, and encouraged
to sign up for delivery of a sample to their home
or business.
4.8 Sweepstakes
In order to avoid clashing with the provisions of
lottery laws, sweepstakes should not insist on
purchase on the part of the consumer. In addition
to generating consumer interest, online
sweepstakes offer an excellent way of building
databases.
5 Promoting your website
Some means of luring visitors to one's website
are listed below [7].
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Get your website listed prominently on
search engines and web directories.
Collect 'opt-in' e-mail addresses and email
invitations to your prospects.
Buy links to your site from other sites your
prospects visit.
Promote your site's URL offline everywhere
you can.
Send 'e-mail' and snail-mail press releases to
announce your site.
Swap or buy banner advertisements on other
sites.
Pay commissions to affiliates who send
customers to you.
Carefully promote your site on newsgroups,
chat lines, and e-mail discussion lists.
Buy sponsorships of sites or pages your
prospects visit.
Banners are only short-term traffic drivers.
Sponsorships are long term, suitable for driving
ongoing traffic. Sponsorship of content related to
your prospect's needs, will generate a lot of
qualified visitors.
6 Viral Marketing
Viral marketing is a strategy that encourages
individuals to pass on a marketing message to
others, creating the exponential growth in the
message's exposure and influence, in the manner
of a computer virus. An effective viral marketing
strategy exploits common motivations and
behaviours, utilizes existing communication
networks and, takes advantage of others'
resources [8]
5
Effective viral marketing strategies have been
employed in the following cases [9].
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Hotmail
Amazon
ICQ
Tumbleweed
Memail.com
Geocities
Homestead
E Groups
Vivaldi
Dove Express
7 Online Promotions and Advertising
in India
A breakup of advertising online globally and in
India is shown in Table 1 [10].
Table 1
Sector wise Advertising Online
Sector
Global
Share in
online Ad
Industry
(in %)
FMCG
30
Finance
15
Technology 11
Communication /
Publication
Others
Total
7
37
100
Sector
Finance
FMCG
Consumer
Durables
Media
Others
Total
Share in
online Ad
Industry
In India
(in %)
40
20
15
10
15
100
The traditional media paradigm has been 'CPM'
or 'Cost per thousand' units of audience. Since
the arrival of the web, we are on to CPA' or 'Cost
per Action' model. The forms of 'action' under
CPA can include a click-thru on a banner, the
filling up of a form or even the actual purchase
of a product online [11].
The most common pricing formula is 'CPC' or
'Cost per Click'. CPA deals constituted only 10
percent of on line advertising in the first half of
2001, as per an Interactive ad Bureau and
Pricewaterhouse survey. However Forrester
Research has predicted that by 2004, half of all
online advertising will be performance based.
Pure CPM deals are expected to decline to less
than 20 percent by 2003, whereas CPA will
increase to more than 50 percent and the
remainder will be a mix of the two.
In India, as of now, most top companies have
started allotting budget for on line media.
Content sites are the prime drawers of ads. These
consist of news based and newspaper sites,
followed by some interactive sites, which offer
contests and youth oriented material. Advertisers
are happy with financial portals like
Indiainfoline.com and sharekhan.com.
Service organisations in categories such as
banking, brokerage, finance, travel and software
have been able to transit to web based
advertising easily, as their products also sell on
the web. FMCG companies are still a bit wary of
the web. Companies like Coke employ a contest
driven strategy. Some FMCG Companies are
exploring sponsorship of relevant categories on a
mix of sites.
Online financial institutions like Citibank have
successfully adopted performance - based
advertising. The bank pays web-publishers only
when visitors to their site opt for one of Citi's
products. Web publishers however are
complaining that they should get some
compensation for the exposures that advertisers
receive [12].
In online advertising, the click thru measures the
consumer's active interest in the ad message at
6
the time of experiencing it. But web - publishers
have not created a premium positioning for the
click-thru.
nor can its power be underestimated or
underplayed.
References:
The recent downturn in the global economy had
increased the trend towards CPA advertising.
The popular tools of on line promotions in the
Indian websites are banner ads, pop -ups and
sponsorship of festival sites.
.
Following is a sampler of the popular websites,
which an Indian Advertiser can use.
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Rediff.com
IndiaMART.com
Indiatimes.com
Indiainfoline.com
8 The Future Scenario
The Internet as a marketing channel is now
being taken more seriously. In the years to
come, the following trends may emerge.
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Banners and Interstitials will continue.
Pay - per - performance campaigns like
cost per action or cost per click may
become the norm.
Contextual advertising will become
more prominent.
Online geo-targeted ad campaigns are
now possible.
Partnering and Co-branding on the net
will increase.
In obtaining leads, new subscribers etc.,
Co registration will be on the increase.
Online promotions like contests,
sweepstakes and real-time instant win
games will continue to attract attention.
Advertisers will insist on measurable
results and ROI.
There will be a continuing trend toward multichannel marketing. Internet marketing is still in a
nascent stage. It is not a panacea for everything,
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“Search Engines in the E-promotion Mix: A
Preliminary Investigation”, Proceedings of
the Association of Collegiate Marketing
Educators Conference, New Orleans, 2001
(2) Smith and Chaffey,
e Marketing excellence The Heart of e Business,
Butterworth-Heinmann, Oxford,2003.
(3)
advisor.aol.com
(4)
indiatravelite.com
(5)
fue14arts.com/sauce/_email_promotio
n/email_promos.htm
(6)
thedma.org/cgi/dispnewsstand?article=1304
(7)
Prasad R. (ed.), Digital Marketing
Concepts and Experiences, The Institute of
Chartered Financial Analysts of India,
Hyderabad, 2002.
(8)
pagecafe.com/articles/permissionmarketing/
(9)
www.viralmarketer.com/vmcases.html
(10)
indiainfoline.com
(11)
McCrea, John K., “The Pricing Battle:
CPM Vs. Revenue Share”, iMarketing
News,2(28),p.24,28
(12)
Mantravadi, Pramod,M, E-Marketing,
The Emerging Trends, The Institute of
Chartered Financial Analysts of India,
Hyderabad, 2002