General Motors (GM), the third biggest advertiser across all media in the US after Procter and Gamble and AT&T, stopped advertising on Facebook in May as it found paid ads on the site have little impact on car purchases. But Indian brands – both big and small — don’t seem to be sharing that pessimism.
Kirthiga Reddy, Facebook’s director-online operations and Head of India office, gives the example of Chumbak, a souvenir products firm. By using Facebook as the sole platform for its marketing efforts, the company today generates 25 per cent of its revenue from Facebook and claims to have made 5x on its return on investment.
Airtel recently spent Rs 30 lakh per day for a “logout” banner advertisement on Facebook, industry players say. While this is certainly one of the highest paid advertisement slot for a social media platform, agencies say that corporates are spending large amounts for ads on Facebook for one reason: the world’s largest social media platform’s unique selling proposition in India: its 51 million users.
|GOOGLE VS FACEBOOK
- Search-driven marketing platform
- Generating lead, sales, drive traffic to website
- Targeted advertisement based on demographics like age, location, interest etc
- Engagement, community building
Says Reddy: “The biggest advantage of Facebook is that you have 51 million real identities on the web that they can be targeted precisely. Since 2010, we have seen phenomenal growth in the Indian market — from eight million users to 51 million. The biggest positive is that companies can have a metric for ROI.” Besides, Facebook for advertisers is not about just creating communities, but also allows them to do several other things, she adds.
Agencies agree. “Brands in India are much aware of what they want from Google and Facebook. Google as a platform is used if someone is focussed on driving sales, whereas Facebook is for branding and creating a community around that brand. We recently worked with a FMCG player that spend Rs 35 lakh per month on Facebook,” said Rajiv Dingra, Founder and CEO, WatConsult.
Vikram Bharadwaj, head of interactive at Cheil Worldwide, South West Asia, who also manages the advertising for Samsung's brands, believes that there are other benefits of associating with Facebook. “The idea is to get close to the point of purchase. So it is not uncommon for big brands to spend upwards of Rs 20-25 lakh per month on Facebook. Samsung alone spends Rs 25 lakh per month,” says Bharadwaj.
Even when Facebook approaches brands in India independently, they are taking the engagement story to them. “There are benefits of Facebook approach. If a brand wants to launch a new product or a campaign they already have a community created,” said Moksh Juneja, Founder and CEO, Avignyata, a social media marketing consultancy.
Media planners say brands are going after Facebook today because of the ability to create communities. “People talk on Facebook, so it isi not unidimensional as in traditional media. There are multiple parts to Facebook: communication, feedback, engagement, which makes it an interesting draw for brands,” Bharadwaj says.
- Advertisement revenue: $992 mn for Q2 CY2012
- Monthly active users: 955 million
But Facebook is up against a formidable competitor, Google, both globally and in the Indian market. The search giant has over half the Indian digital advertisement pie, which is expected to reachRs 4,391 crore by March 2013. At present the market is pegged at Rs 2,851 crore says Internet and Mobile Association of India (IAMAI) and IMRB.
While Google’s engagement with advertisers and agencies is far more than newbie Facebook, persons in the know say the latter has been talking to prospective clients of late. Industry sources say Facebook as of now is targeting agencies that have budgets of Rs 5 lakh per month on their platform. “They have a small team, but yes they are going out and talking to clients,” says a media planner based in Mumbai. Digital industry sources say that it is also cheaper to advertise on Facebook than on Google.
“Definitely they have been talking to advertisers and agencies,” says Srikant Sastri, country chair, Vivaki, the media arm of the Publicis Group. While the effort is not as organised as Google’s, which has a larger team, agency honchos admit that Facebook has made a start.
Facebook, last month tied-up with industry chamber Ficci to tap the small and medium enterprises.The company has tied up with Ficci to help smaller firms understand the potential benefits of advertising on the site. Through this industry interaction Ficci and Facebook plan to rope in at least 600 SMEs. Participants will receive tutorials on how to build a presence on Facebook through pages and engagement via advertising programmes on the site.