On Line 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

I N D I A

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 cost-effective 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 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.

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- 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].

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 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

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.

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.

3.4 Video ads

Video ads stream audio and video content, and help marketers to

• 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.

4.5 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].

• 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]

Effective viral marketing strategies have been employed in the following cases [9].

• Hotmail

• Amazon

• ICQ

• Tumbleweed

•

• 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 |Sector |Share in online Ad |

| |Share in online Ad | |Industry |

| |Industry | |In India |

| |(in %) | |(in %) |

|FMCG |30 |Finance |40 |

|Finance |15 |FMCG |20 |

|Technology |11 |Consumer Durables |15 |

|Communi- |7 |Media |10 |

|cation / Publication| | | |

|Others |37 |Others |15 |

|Total |100 |Total |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 and .

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 the time of experiencing it. But web - publishers have not created a premium positioning for the click-thru.

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.

•

•

•

•

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.

• 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 multi-channel marketing. Internet marketing is still in a nascent stage. It is not a panacea for everything, nor can its power be underestimated or underplayed.

References:

1) Conrad, Craig A., and Johnston, Timothy, “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.

4)

5) sauce/_email_promotion/email_promos.htm

6) cgi/dispnewsstand?article=1304

7) Prasad R. (ed.), Digital Marketing Concepts and Experiences, The Institute of Chartered Financial Analysts of India, Hyderabad, 2002.

8) articles/permission-marketing/

9) vmcases.html

10)

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

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download