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Ad war in cyberspace

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remains the leader in digital advertising, but is catching up fast

The race for leadership in the digital advertising space is getting fiercer. While Yahoo is still the leader in the display space, Google has stepped on the gas.

The first evidence of Google’s resolve came when the Mountain View-headquartered firm gave out its revenue break-up – something it has never done before. Google said that the contribution from ads — from , and – was $2.5 billion. The intention was clear: Google wants to let the world know that it has achieved a critical mass in advertising.

Closer home, the appointment of Shailesh Rao as managing director of the media business for the Asia Pacific region was another indication of Google’s game plan. Add to this the recent launch of its campaign ‘Watch this space’.

The reason for the search giant’s enthusiasm is obvious. The Indian online advertising market went up by around 26 per cent to Rs 993 crore in 2010-2011 compared to the previous year. Total online display advertising market grew 28 per cent to Rs 534 crore.

More importantly, India’s internet user base has touched 80 million, and another 30 million access internet through mobile handsets. The latter is expected to grow as 3G starts gaining acceptance.

With YouTube, Google has demonstrated that it finally has the vehicle to dream big. To drive home the point, Rao says YouTube, which had 55 million hits during last year’s IPL, scored heavily on ad revenues. “There is a difference between knowing about an opportunity and actually seeing it happen. In a span of 30 days, we received sponsorship from seven to eight companies across multiple verticals in India who never thought of investing seriously on display ad. That’s when we realised the magnitude of interest,” explains Rao.

There’s more. Over 36 hours of video is uploaded on YouTube every minute. YouTube has crossed 20 million unique users in India and Google reaches 80 per cent of all internet users in India.

Rao says Google is focused on audience-based buying and targeting display advertisement. “We believe web is much more than just finding the audience and selling. We are trying to help through data that helps advertisers and publishers find the audience based on gender, interest, demographic, behaviour etc.,” he adds. And there are innovations galore. For example, offerings like ‘remarketing’ that allow advertisers and publishers to track a user anywhere.

THE LEADER’S MOVES
Yahoo doesn’t seem to be overtly concerned about Google’s sudden aggression and says it is focused on growing the digital advertising category further by educating advertisers about the potential. Yahoo launched Fresh Fridays program for advertisers and agencies this year. This is a single day session that usually covers all key marketing and advertising professionals. “We share with them some great case studies, trends etc while encouraging them to leverage this medium to build their brands,” says Arun Tadanki, MD, Yahoo! India.

Digital ad campaigns for Dove, Samsung, Pepsi, Tata DoCoMo, Yatra, Cadburys and Citibank on Yahoo have delivered good results for brands. The Samsung Jet campaign reached out to over three million unique users in just seven hours with very high engagement. Tata DoCoMo reached nine million unique users through Yahoo.

Tadanki says Yahoo is constantly striving to retain its edge. It has already launched a dozen odd ad formats in the display advertising space. For example, its new log-in page ad enables advertisers to bring about their messages as they would with a full-page print ad but with much larger scale, reach and interactivity. “You can show a consumer an ad that lets him play the trailer of a movie (in full screen), post that link to Facebook; read reviews for that movie or even book a ticket for it: all from the ad itself,” informs Tadanki.

While the two giants are slugging it out, experts say that the larger story is to get the bigger chunk of TV advertisement spend. “I think Google is better prepared to garner this share of advertisement,” says Mahesh Murthy, founder Pinstrom — a digital marketing firm.

Data show Google is clearly gaining an edge. According to Comscore, in January 2011, Google sites ranked the top online video viewing destination in India across several metrics. More than 23.5 million viewers watched a total of 785 million videos on Google sites, with viewers averaging 1.7 viewing hours during the month.

But everyone agrees there is enough space for both to co-exist in India. Listen to Rao: the percentage of smartphones in India that allows rich media is still small in number. “But based on our interaction in the market, we will see in four-five years an Android-based smartphone with a price tag of just Rs 5,000.

The battle is therefore expected to be a long-drawn one.

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