Part of a wider trend of social networking sites leveraging their user base.
With the Indian Premier League (IPL) cricket season round the corner, Google’s social networking platform, Orkut, is hoping to turn itself into a hot-bed for advertisers.
In discussion with IPL to create brand positioning campaigns and even an IPL profile page for Orkut users, Google is serious about monetising its social media portal. “Last year, we built a stronger base of marketers and invested in internet advertising. In 2009, we should make revenues from our social media platform,” says Google India Managing Director Shailesh Rao.
Google is banking on converting its vast network of Adwords advertisers to Orkut, where they can place targeted and contextual advisements on various social communities and user profiles, reaching individual customers directly. “This would be through minimum intrusion, as we will (only) allow advertising at the lower half of the user’s profile page, that too at an infrequent rate,” adds Mahesh Narayanan, senior industry manager, Google. Online display adverts are a $70-million market today and Google is gunning for a bulk share.
Around 10 entities, including FMCG, telecom and movie producers, says Narayanan, will be the big-ticket advertisers for Orkut in 2009. “You will see Google helping airlines sell tickets and packages on Orkut, financial services and products to users, and insurance and brokerage firms to offer services to targeted users,” says Rao. According to comScore data, in 2008, Google sites ranked as the top property in India, with nearly 20 million visitors. Orkut registered nearly 10 million visitors, marking a growth of 39 per cent. Orkut Apps, the blog that has become popular for software developers to market their social applications, has also opened new revenue streams for Google.
An estimated 45 million internet subscribers drove the online advertising market to Rs 240 crore in 2008, and according to Federation of Indian Chambers of Commerce and Industry (Ficci) estimates, it could touch Rs 2,500 crore by 2011. But a harsher financial outlook in 2009, combined with an expected fall in online advertising, is forcing the networks to focus more on making money from existing subscribers than on adding new users.
But market research firm, IDC, in its report claims that the use of social networking sites will continue to grow, but advertising will not necessarily expand along with it. Their analysts say: “The fact that people use social networking services for communication puts them in a mindset that is less receptive to advertising than when they are using web sites like Yahoo or Google.”
This explains the effort undertaken by social networks to monetise their user base. In an earlier interview, BigAdda had also confessed to the need to engage its users to churn value for advertisers on its networking portal.
Shivanandan Pare, its chief operations officer, told Business Standard: “Pricing for generic banner advertising on social networking sites is relatively low as compared to other sites, because marketers believe users are logging in for communication rather than commerce.”
BigAdda is campaigning with brands like Intel, Nokia and Lenovo, where these interact with users via special promotions, free multimedia download and through brand polls.