Sales pitch in cyberspace

Auto giant Maruti Udyog has taken a small bet on the Internet. The company has just splashed ads for its new redesigned Zen on a handful of high-traffic Internet sites like Yahoo and Hotmail.

Maruti says its reasons for heading into cyberspace are obvious: it's hoping to reach deep-pocketed Netizens.

"The Internet audience composition has a very strong skew towards the SEC A audience. Therefore it is impossible for any car manufacturer to ignore the capabilities of this medium," says a Maruti spokesman.

Maruti Udyog isn't the only company that is putting money on the Internet. These days ads for Citibank's numerous lending schemes start flashing on your screen almost the moment you've logged on.

Even Bollywood has figured that the Net is a smart place to catch moviegoers.

In the heady days of the dotcom boom the pundits of the ad world reckoned that the Internet would soon be a giant force in the world of advertising. Their predictions turned out to be premature but Internet advertising is finally coming into its own.

But anyone who thought that Net advertising would be like a quarter-page in a newspaper had better think again.

Companies and ad agencies are discovering new and innovative ways of reaching customers on the Net. Web-mercials, interactive contests and highly targeted advertising are the order of the day.

Take a look at how Tata Racing is using the Internet. It could have splashed a picture of a racing car and driver Narain Karthikeyan who wears its colours.

Instead, it presented an F1 microsite for racing aficionados featuring downloads, race reviews and a photogallery. Within four months 1,807 users took part in contests on the site.

Or, look at Seagrams which has had an even greater success with its competition-format ads. A few months ago it hosted online contests for its Mega Movies and Mega Music contests and 55,000 users took part.

Contestants had to log in and answer a few trivia questions relating to the movie or music album being featured.

"The promo was a huge success for Seagram's," says Rajneesh, head of marketing, MSN India, one of the countries leading portals.

The contest generated 3 million page views and with the success of the event, Seagram's introduced its Royal Stag Mega Zone microsite featuring theme-based contests.

It's not tough to understand why India's marketing whizkids are looking keenly at the Net. The clutter in mainline media "" print and television, has forced product managers and marketing heads to look at new ways of reaching their audiences.

The Net companies, for their part, have been quick to understand what's driving their customers and they've been trying to offer better alternatives. "It's the search for greater value which is driving Net advertising like never before."

But it isn't just cost-cutting that's attracting companies to the Net. Maruti, for instance, is about to make use of something called the interactive-page domination technique.

In this system a pre-set corner advertisement opens to give a detailed view of the new car. Then, by moving the cursor on the ad, it's possible to check out different aspects of the new car.

At a different level, Britannia has already shown that a foray onto the Net can bring rich returns.

Some time ago Britannia signed an 18-month exclusive deal with MSN for online and offline campaigns under which it was co-branded on Windows XP and MSN Explorer CDs. This gave Britannia access to a large group of young tech-savvy users.

The amounts of money involved are still minuscule. A PriceWaterhouseCoopers (PwC) survey in July estimated that online advertising revenues are currently hovering at around Rs 60 crore.

That isn't very much but the market has zoomed by around 40 per cent since last year. And PwC reckons that online advertising is poised for takeoff and will touch around Rs 500 crore in five years.

The PWC forecast is endorsed by key Net players like Rediff.com chairman Ajit Balakrishnan. He says: "The emergence of net advertising is an international phenomenon, and year 2003, can easily be looked upon as the benchmark year, in terms of a turnaround."

On a slightly different note, Yahoo India, Country Manager Neville Taraporewala feels, that current ad revenues are probably only at around Rs 50 crore. But he's confident that the Rs 500 crore target is easily achievable.

The fact is that a wide range of companies are already spending small amounts on the Net. MSN India has more than 60 advertisers today ranging from Hindustan Lever to Bollywood studios.

Others on the Net include auto giant Honda and Tag Heuer. Ford's SUV ad on MSN made it look as if the computer screen was shaking "" that's an effect that might be tough on an actual television screen.

What are the top techniques that advertisers are looking at? There's the web-mercial which has the look and feel of a television commercial. It is usually a 80kb file with music and animation.

Also, there are text-based ads which are big hits on the Net according to all available research.

The fact is that web advertising is still extremely cheap compared to television or even print.

MSN's Rajneesh believes that the Net can reach the same number of potential customers as television at one-fifth the price.

MSN's ad rates have only risen by around 10 per cent since last year but its ad revenues have doubled in the same period.

Similarly, Yahoo India's 24-hour home page promotion costs an advertiser between $10,000 (Rs 5 lakh)and $12,000 (Rs 6 lakh). That's up about 10 per cent but it's still inexpensive compared to other media.

Yahoo is, however, careful about certain types of ads that appear on the Net. It doesn't, for instance, encourage pop-up ads that interfere with the actual content.

Says Taraporevala: "Unlike other players in the market, we haven't gone over the hill "" we donot allow or encourage pop-up ads. The advertising, be it in the form of a Pepsodent emerging out of the screen or a Jet Airways flying across the page, should not antagonise the user."

Are the hi-tech companies right to be so bullish about the future? Rediff, for instance, notched up quarterly revenues of $3.5 million upto September 2003 and half of that came from advertisements. What's more, Balakrishnan points out that the number of Net users in India is bound to boom and so is the amount of e-commerce.

He believes that the number of Net users will climb from around 16 million currently to about 30 million by the end of 2004. And he believes these figures will climb even further.

"In an English language-governed urban society, the penetration of the English print medium is 70 million, and we will eventually hit that number in the online space as well," he adds.

Worldwide, FMCG companies, auto companies and retail chains are spending heavily on the online media, and investing in e-commerce forays.