e-commerce is the key driver for online advertising. But it is still nascent and growing compared to other verticals such as travel, head hunting and matrimonial.

There has been a paradigm shift in advertising and marketing services in recent times. As the industry evolves and delivers ‘targeted’ results, more emphasis is being laid on online marketing. The online advertising industry is experiencing incredible growth today. As organistions leverage different dimensions of this medium from brand building to customer engagement, they get encouraged to increase their investments in online marketing.

Digital advertising

Digital advertising has become the norm for most big and small companies. It is extremely rare in today’s economy for a large firm to have a marketing department that does not include an e-advertising group. The downturn has made companies more sensitive to the returns from their marketing investment which has further sharpened their focus on the online medium.

Parminder Singh, Business Head, Google India, says online advertising in India is evolving. India is one of the world’s fastest growing online markets. It witnessed tremendous growth in Internet with more than 50 million online users today. With a sustained growth in broadband and personal computer penetration, the number of Internet users has grown further.

From shopping to travel; banking to job-hunting; and news to purchasing movie tickets, Internet slowly but steadily is becoming an important medium of business. It is expected to go beyond allocating a portion of an organisation’s marketing budget and be a long-term business investment that will yield an immediate short-term result.

Mr. Singh says e-commerce is the key driver for online advertising. But it is still nascent and growing compared to other verticals such as travel, head hunting and matrimonial.

However, the driving factors such as ROPO (research online and purchase offline) model, brand advertising and interactive groups are fast catching up in the e-commerce model. It is estimated that these factors will accelerate the e-commerce verticals in a big way.

On whether online advertising will catch up when compared with other models of advertising, he says that versatility in Internet is the main factor that will set aside the online advertising from the conventional one. Mr. Singh claims that digital medium helps advertisers target the consumer in three ways — it helps the consumer to test a new business start; analyses his traffic flow for his website and helps the consumer to mix both offline and online advertising campaigns.

Google’s initiatives

On Google’s initiatives to boost online advertising, he says that in recent years, it has established ties with advertisers, companies and agencies. It has launched several initiatives to boost the market such as ‘Digital Days’, wherein education workshops for advertisers are held to make them understand the power of the Internet. Second, it is integrating online and offline mediums to work together. Third, the focus is to expand the impact of online marketing to help companies use it for branding as well. Further, Google helps advertisers use video and social media through innovative advertising options on YouTube and Orkut.

With slowdown acting as a catalyst, Mr. Singh feels that online advertising rapidly creeps up on traditional media platforms in terms of revenue generation. According to a Lintas media report, online advertising can touch the magic figure of Rs. 2,500 crore by 2011. The total size of the advertising industry is estimated at Rs. 20,000 crore. But today, the online advertising industry size is estimated at Rs. 750 crore.