| "It's a pay-for-performance model," says founder Mahesh Murthy. With a turnover of around Rs 11 crore, Murthy is aiming at Rs 25-30 crore by fiscal 2008. |
| "Our job is to connect prospects to the brand. We pay for the media, the creative, the account service and the technology. The client only pays for the results," he asserts. Today, Murthy has around 40-45 global clients across the hospitality, BFSI, education, online business, IT and FMCG sectors. They include Lee Jeans, Sharekhan, Indiagames, Makemytrip, HP and Colgate. |
| Pinstorm's model is simple. The online business comprises search engine marketing (45-48%) and online advertising (display, et al) which jointly account for 90-95 per cent of the business. The remaining 5 per cent comes from "building online communities". |
| For instance, when Lee Jeans wanted to connect with the youth, it asked Pinstorm to come up with an idea. It came up with leelounge.com that today has over 17,000 members in the age group of 17-23 who surf the internet or use their cellphones to post messages and interact with other forum members. Pinstorm is paid for every recruit it brings in. "This is an audience that does not watch too much TV but is very mobile. It works for Lee Jeans," reasons Murthy. Likewise Pinstorm claims to generate "two leads every minute" for Indiagames (50,000-60,000 leads every month) and "one person every minute" for Sharekhan too. |
| Pinstorm's bread and butter, though, comes from search engine marketing (SEM) which worldwide is estimated to be a $14 billion business. Also consider the Rs 70 crore online ad spend by Indian companies (not those of Indian origin, but ones with operations here). Naukri.com alone is said to spend around Rs 16 crore annually. And with Internet users predicted to grow to and 50 million by March 2008, SEM has a future you cannot ignore. |
| Incidentally, the company has developed a software called Livecontext (filed for patents) which scouts websites, recognises a new write-up or story, extracts the content, breaks it down into keywords, then buys the keywords from search engines, automatically writes an advertisement based on the keywords and hosts the ad on the search engines "" all within five minutes of the story being posted online. |
| Using this software, Murthy claims to be alluring 10,000 visitors every month to the Yahoo! Answers site from Google. |
| Sponsored ads or links work thus. If you search for a 'hotel in Matheran', the search will also throw up sponsored results by travel sites and hotels in the vicinity. However, buying sponsored links is no longer a low-risk game. Brands generally buy around 40 keywords. |
| "While you might be happy with 10 or 50 keywords, a typical campaign we run will feature at least 10,000 keywords -"" and there are a few in the hundreds of thousands of keywords range. This gives our clients a wider coverage and lower costs per response compared to others bidding on a limited set of words." |
| And the price of keywords seems to keep on rising. Specific keyword(s) are priced anywhere between Rs 2 and Rs 1,800 ($40) in India. Pinstorm has devised a way out. "Our BroadWords technology sniffs out non-obvious but relevant, inexpensive keywords. Second, our BidWise systems ensure we bid appropriately on each word "" across millions of keywords," says Murthy. |
| SEM, though, will have to put up with the 'distrust' factor "" up to 85 per cent of searchers say they "tend to ignore the paid listings". And 87 per cent of commercial clicks take place "on the natural (not sponsored) search results", according to Jupiter Research. |
| However, this new channel is changing the way many advertising agencies do business. It no longer can be ignored. |
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