March 30 2013 - MBA 4002 - Project Work - A Study of Growth and Sustainability of Online Marketing Agencies in India - AT - V4

A Study of Growth and Sustainability of Online Marketing Agencies in India
MBA 4002: Project Work Arun Trikha MBA (PT) 4706/10
Declaration
I Arun Trikha, student of Birla Institute of Technology (BIT) semester 6 hereby declare that this report titled A Study of Growth and Sustainability of Online Marketing Agencies in India is a record of independent work carried out by me as a part of final year project for MBA course offered by Birla Institute of Technology, Mesra, Ranchi, India for the period starting from April 2010 June 2013 The above project was executed under the guidance of Dr. Arun Mittal. I declare that the information submitted herein is true and original to the best of my knowledge.
--------------------------------------Signature of Student (Arun Trikha)
March 30, 2013 A Study of Growth and Sustainability of Online Marketing Agencies in India Arun Trikha
Acknowledgement
The work on this project has been an inspiring, often exciting, sometimes challenging, however always an interesting experience. I wish to express my heartfelt gratitude to the following individuals who have played a crucial role in the research for this project. Without their active cooperation the preparation of this project could not have been completed within the specified time limit. At the very outset, I wish to thank Dr. Arun Mittal, my mentor, for giving me the opportunity to participate in this interesting research project that helped me gain insights and develop deep understanding of the online marketing in India. He has supported me with his guidance, insights, encouragement and many a fruitful discussion on Internet Marketing. I am grateful to him to have spared his time and showing the patience to our answer my queries. The kindness shown by him, in spite of him being so busy with his work, is highly appreciated. I would also like to thank Dr K B Singh and my entire fellow batch mates who supported me at all times. This ensured the prompt completion of this project. Finally I would like to thank Mr Rajeev Parashar, Director Online Presence Management The Taj Group of Hotels and all my friends who have helped in all possible ways in making this project presentable. I am, indeed, indebted to all of them and express my gratitude to all the people concerned.
Arun Trikha Birla Institute of Technology, Mesra, Ranchi, India
Certificate of Origin
This is to certify that Mr. Arun Trikha, a student of Post Graduate Degree in Birla Institute of Technology, Mesra, Ranchi, India has worked under the guidance of Mr. Arun Mittal Faculty Birla Institute of Technology, Noida for this dissertation report. This dissertation report has the requisite standard for the partial fulfillment of the Post Graduate Degree in Marketing and Finance. To the best of our knowledge no part of this report has been reproduced from any other report and the contents are based on original research.
Signature Mr. Arun Mittal
Signature Arun Trikha MBA (PT) 4706/10
Executive Summary
I am excited to submit the project A Study of Growth and Sustainability of Online Marketing Agencies in India as a part of my MBA curriculum to the Birla Institute of Technology, Noida. Through this study, I intended to develop an in-depth understanding of the growth of online marketing and agencies providing online marketing services in India. The study provides a comprehensive overview of the different methods adopted by various online marketing agencies in India, current and forward looking trends, and challenges faced by the industry. This project provides strategic intelligence on online marketing India and highlights the profiles of major players of the industry. In 2011, internet contributed 1.6% (USD 30 Bn) to Indias GDP and expected to grow to 3.3% (nearly USD 105 Bn) by 2015. India is the worlds third largest internet mark et with a user base of 120 million and is poised to grow up to 370 million users by 2015. At present, internet market provides 6 million direct and indirect jobs to people and expected to provide employment to 22 million by 2015. According to McKinsey & Company Global Institute senior fellow Anu Madgavkar Given current downward trends in the cost of Internet access and mobile devices, India is on the verge of an Internet boom. India is likely to have the second largest user base in the world and largest in terms of incremental growth." The various factors such as falling cost of internet access and prices of mobile devices have contributed in the internet boom in India. Thus, the increasing use of internet accompanied with multiple sources has provided base to the marketers to choose online medium to reach to the potential clients anywhere across the globe. India has emerged as one of the leaders in the offshore outsourcing business and as a hub for online marketing. It offers a rich resource pool and services at very affordable rates. The internet advertising industry is still young in India and behaves in a similar way to the Western European internet advertising industry 5-8 years earlier. It is growing at fast pace outpacing offline advertising. As more and more companies realize the real value in advertising their goods and services online, they are diverting funds from other forms of offline advertising to compensate. The online marketing space is dominated by various sectors such as travel and tourism, financial services, IT/mobile and recruitment, with consumer package goods and retail. Consequently, the market share of Internet advertising is continually growing while the market share of offline advertising mediums stagnates or declines. At the current rate of growth, Internet advertising has already overtaken radio advertising in spending and market share. While outdoor advertising is also experiencing growth, it is not growing as rapidly as Internet advertising, and Internet advertising has already overtaken it. The Indian online advertising market, including classifieds is poised and expected to grow by 54% in the next 12 months. The research, from the Internet and Mobile Association of India (IAMAI) and IMRB, found that as of March 2012, the industry was worth Rs 2,851 Cr in annual
revenue and it is expected to further grow to Rs 4,391 Cr by March 2013. The IAMAI represents the online and VAS players in India. The online advertising market in India is about 11% the size of the conventional or traditional media advertising market. Online advertising has been growing in India, even in the recent economic downturn. According to IAMAI On an average, the digital ad spends have been growing at 25% year-on-year basis. Social media, email marketing, and search marketing is considered as the top three online investment channels. It has been noted that online users in India have exhibited willingness to make purchases over the Internet by getting influenced by the online advertisement; this is quite evident from the growing net commerce industry. The retail industry has also benefited from its online version which has resulted in the growth and expansion of the sector worldwide. The report includes the detailed outlook of understanding of online marketing in India and focus on the various major players in the online marketing in India through robust research methodologies and analytical plan
Table of Contents
1. Introduction ...................................................................................................................................... 8 Evolution of Marketing ................................................................................................................................8 Advertising .....................................................................................................................................................8 Online Marketing ........................................................................................................................................ 11 The Advent of the Internet ..................................................................................................... 11 7 Ps of Internet Marketing .................................................................................................... 11 Understanding the Internet customers .................................................................................. 12 Brand Building on the Internet ............................................................................................... 13 Critical Success Factors in Online Marketing.......................................................................... 14 Benefits of Online Marketing ................................................................................................. 16 Internet Marketing Trends ..................................................................................................... 17 Internet Advertising ................................................................................................................................... 19 Internet Advertising Vs Traditional Advertising ..................................................................... 19 Objectives of Internet Advertising ......................................................................................... 20 Features of Internet Advertising ............................................................................................ 20 Types of Internet Advertising ................................................................................................. 21 Internet Advertising Trends.................................................................................................... 23 Major Online Marketing Agencies in India ............................................................................. 25 2. Literature Review ............................................................................................................................ 29 Excerpts from the News Articles .............................................................................................................. 30 3. Market Research ............................................................................................................................. 38 Research Objective ..................................................................................................................................... 38 Research Scope ........................................................................................................................................... 38 Research Methodology .............................................................................................................................. 38 4. Business Model ............................................................................................................................... 40 5. Data Collection ................................................................................................................................ 41 6. Appendix A: Questionnaire ............................................................................................................. 42 7. Appendix B: Case Studies ................................................................................................................ 44 Carwale.com ................................................................................................................................................ 44 Flipkart.com ................................................................................................................................................. 46 Volkswagen India ........................................................................................................................................ 47
1. Introduction
Evolution of Marketing
At the beginning of the century, social life was mostly local. It was followed by a period in which commodities were produced on a mass scale. Consumer Marketing operated on mass marketing principles and business primarily concerned itself with how to build the best sales force. At the end of the century, there is an emerging global culture. The major driver of these changes is technology. Technological change has moved steadily back focusing on the individual. These changes shape the possibility and conduct of business. Marketing is especially tied to communication and transportation revolution. As the tools and reach of marketing increase, the job and responsibilities of marketers have evolved with them. Philip Kotler formalized this evolution with his book "Marketing Management." His key stages are production, sales and brand management. Each of these is strongly motivated by technological opportunities, which permit new methods and new opportunities. A fourth stage, a focus on the individual customer, is also important. As the new technology of the Internet develops, it reinforces the new marketing emphasis - which in many ways is a return to business at the turn of the century. In todays technology driven world, a new fast paced digital economy is emerg ing. In the near future, it wouldnt be surprising to see that there are companies that exist only inside computer networks. Most business transactions will be made electronically, directly from the producer to the consumer, bypassing the supply chain. In the digital marketing environment, the consumer becomes an integral player in the development of the product. In fact, a consumer might build the product himself from a wide array of parts provided by the company. It is e-commerce that is changing the way products and services are conceived, manufactured, promoted, priced, distributed and sold. The reason being that it is much cheaper; it allows vast coverage and helps in serving the customer better.
Advertising
Advertising is a paid form of communication, although some forms of advertising, such as public service announcements, use donated space and time. Second, not only is the message paid for, but the sponsor is identified. Third, most advertising tries to persuade or influence the consumer to do something, although in some cases the point of the message is simply to make consumers aware of the product or company Fourth and fifth, the message is conveyed through many different kinds of mass media reaching a large audience of potential consumers. Finally, advertising is non-personal as it is a a form of mass communication
Advertising is an important promotional tool for any marketing campaign. So much so that whenever we think of marketing we think of advertising although it is just one of the marketing tools. Till now only companies with a profit motive went in for advertising. But today government bodies as well as non-governmental organizations (NGOs) go for high profile advertising campaigns. The purpose here is not to increase the sales figure but to increase the awareness of people regarding the relevant topics. Even though each ad or campaign tries to accomplish goals unique to its sponsor, advertising performs three basic functions: Provide product or brand information: Although many ads are devoid of information, providing the consumer with relevant information that will aid decision making is still the main function of advertising. The information given depends on the needs of the target audience. In the case of purchasing a new suit, needed information might simply include price and outlet location. For technical products, the information is likely to be very detailed Provide incentives to take decisions: In most instances, consumers are reluctant to change established behavior. Even if there are somewhat dissatisfied with the current product or service, a habit has been established and learning about a new product is deemed difficult. Advertising provides the consumer with reasons to switch brands by presenting reasons through copy or graphics. Convenience, high quality, lower price, warranties, or a celebrity endorser are all possibilities Provide reminders and reinforcement: Its amazing how much advertising is directed at current customers. Consumers forget why they bought a particular brand of microwave or automobile. Advertising must remind the customer constantly about the name of the brand, its benefits, its value, and so forth. These same messages help reinforce the customers decision. Most television advertising seems to provide this function Advertising is a form of selling. It tries to make consumers buy goods or services. Advertisers must be aware of the factors that influence people's buying habits and then use advertising strategies based on this knowledge. Advertising can be classified in number of ways. Print Advertising: Newspapers, Magazines, Brochures, and Fliers: The print media have always been a popular advertising medium. Advertising products via newspapers or magazines is a common practice. In addition to this, the print media also offers options like promotional brochures and fliers for advertising purposes Outdoor Advertising: Billboards, Kiosks, Tradeshows and Events (OOH): Outdoor advertising is also a very popular form of advertising, which makes use of several tools and techniques to attract the customers outdoors. The most common examples of outdoor advertising are billboards, kiosks, and also several events and tradeshows organized by the company. The billboard advertising is very popular however has to be really terse and catchy in order to grab the attention of the passersby. The kiosks not only provide an easy
outlet for the company products but also make for an effective advertising tool to promote the companys products. Organizing several events or sponsoring them makes for an excellent advertising opportunity. The company can organize trade fairs, or even exhibitions for advertising their products. If not this, the company can organize several events that are closely associated with their field Broadcast advertising: Television, Radio and the Internet: Broadcast advertising is a very popular advertising medium that constitutes of several branches like television, radio or the Internet. Television advertisements have been very popular ever since they have been introduced. The radio might have lost its charm owing to the new age media however the radio remains to be the choice of small-scale advertisers Covert Advertising: Advertising in Movies: Covert advertising is a unique kind of advertising in which a product or a particular brand is incorporated in some entertainment and media channels like movies, television shows or even sports. There is no commercial in the entertainment but the brand or the product is subtly (or sometimes evidently) showcased in the entertainment show. Surrogate Advertising: Advertising Indirectly: Surrogate advertising is prominently seen in cases where advertising a particular product is banned by law. Advertisement for products like cigarettes or alcohol which are injurious to heath are prohibited by law in several countries and hence these companies have to come up with several other products that might have the same brand name and indirectly remind people of the cigarettes or beer bottles of the same brand. Common examples include Fosters and Kingfisher beer brands, which are often seen to promote their brand with the help of surrogate advertising. Public Service Advertising: Advertising for Social Causes: Public service advertising is a technique that makes use of advertising as an effective communication medium to convey socially relevant messaged about important matters and social welfare causes like AIDS, energy conservation, political integrity, deforestation, illiteracy, poverty and so on Celebrity Advertising: Although the audience is getting smarter and smarter and the modern day consumer getting immune to the exaggerated claims made in a majority of advertisements, there exist a section of advertisers that still bank upon celebrities and their popularity for advertising their products. Using celebrities for advertising involves signing up celebrities for advertising campaigns, which consist of all sorts of advertising including, television ads or even print advertisements Internet Advertising: Internet promotion is one of the newer types of advertising and can be accomplished in a number of ways. Flash advertising refers to messages that jump onto your computer screen and often move around. They can be hard to close and are annoying, but effective at gaining your attention. Pop up and scrolling ads are other examples of these types of advertising. Pay per click advertising refers to marketers paying to have their web pages placed high on search engine results pages. These are also called sponsored links
Online Marketing The Advent of the Internet

The new millennium has brought us on the brink of the I.T. Revolution. This revolution has been aided by the advent of the Internet in a big way. Internet is fast changing the way people used to do things. Naturally, the same would have an impact on the advertisers. The Internet has been accepted as the most powerful media for advertising due to the absence of geographical barriers. The advent of the Internet and its subsequent acceptance has once again challenged the traditional forms of advertising. Advertisers are trying to use the 'net' to advertise their products and hence 'net' their customers. Thus, with the Internet gaining prominence, vertising equations are fast changing. Online marketing, also referred to as web marketing, internet marketing, or eMarketing, is the marketing of products or services over the Internet. Internet marketing ties together creative and technical aspects of the Internet, including design, development, advertising, and sale. The Internet has brought many unique benefits to marketing, one of which being lower costs for the distribution of information and media to a global audience. The interactive nature of Internet marketing, both in terms of providing instant response and eliciting responses, is a unique quality of the medium. Internet marketing is sometimes considered to have a broader scope because it not only refers to digital media such as the Internet, e-mail, and wireless media; however, Internet marketing also includes management of digital customer data and electronic customer relationship management (ECRM) systems.
7 Ps of Internet Marketing
The four P's - Product, Price, Place and Promotion have long been associated with marketing, but things have changed on the Internet. So along with a change in the nature of the four Ps there are three new Ps which are relevant to the internet marketer: Presentation, Processes and Personalization. Product: Product on the Internet usually changes form online, and the user experiences it electronically, in the form of text, images and multimedia. Physical goods are usually presented in the form of a detailed online catalogue that the customer can browse through. Technology allows the user to virtually touch and feel the product on the Internet - rotate it, zoom in or zoom out and even visualize the product in different configurations and combination. Content and software are two avatars of digitized products that can be even distributed over the Internet. On the Internet, E-marketing will be based more on the product qualities rather than on the price. Every company will be able to bring down the cost of its products and hence competition will not be on price. It will rather be on the uniqueness of the product. To be able to attract the customers and retain them, the
company will have to provide nouvelle and distinct products that forces the net users to purchase and come back for more Price: Price has been drastically changed over the Internet. It lets the buyer decides the price. Also it gives the buyers information about multiple sellers selling the same product. It leads to best possible deal for the buyers in terms of price. Pricing is dynamic over the Internet Place: Place revolves around setting up of a marketing channel to reach the customer. Internet serves as a direct marketing channel that allows the producer to reach the customer directly. The elimination of the intermediate channel allows the producer to pass the reduced distribution cost to the customer in the form of discounts Promotion: Promotion is extremely necessary to entice the customer to its website, as there are currently more than one billion web pages. Promoting a website includes both online and offline strategies. Online strategies include search engine optimization, banner ads, multiple points of entry, viral marketing, strategic partnership and affiliate marketing. Presently, the cyberspace is already cluttered with thousands of sites probably selling similar products. For the customers to know of the Companys existence and to garner information on the kind of products or services that the company is offering, promotion has to be carried out. There can be traded links or banner advertisements for the same. Also the traditional mediums like print, outdoor advertising and television can be used to spread awareness Presentation: The presentation of the online business needs to have an easy to use navigation. The look and the feel of the web site should be based on corporate logos and standards. About 80% of the people read only 20% of the web page. Therefore, the web page should not be cluttered with a lot of information. Also, simple but powerful navigational aids on all web pages like search engines make it easy for customer to find their way around Processes: Customer supports needs to be integrated into the online web site. A sales service that will be able to answer the questions of their customers fast and in a reliable manner is necessary. To further enhance after sales service, customers must be able to find out about their order status after the sale has been made Personalization: Using the latest software it is possible to customize the entire web site for every single user, without any additional costs. The mass customization allows the company to create web pages products and services that suit the requirement of the user. A customized web page does not only include the preferred layout of the customer but also a pre selection of goods the customer may be interested in
Understanding the Internet customers

Now to be able to use the seven Ps effectively in order to achieve the predefined goals of an y organization it is imperative to understand the customers. Customization will only be truly effective if we understand our customers and their true needs.
Before adapting marketing practices to the Internet, the marketer needs to understand the characteristics of the online customers. The Net users can be classified into five categories depending upon their intention of using the Internet. The five categories of users are: Directed Information Seekers: They require specific, timely and relevant information about the products and services being offered Undirected Information Seekers: These users require something interesting and useful. Something that can give them an edge, advantage, insight or even a pleasant surprise Bargain Hunters: They are of two kinds: One who look for free items on the internet and other who are seeking better deals, higher discounts etc. Entertainment Seekers: They see the Web as an entertainment medium of vast breath and potential and want to explore the medium before the mass gets there Directed Buyers: They want to buy something - now. They are sure of their requirements and just log on to the Web to purchase the item
Brand Building on the Internet

For the Company on the cyberspace, their web site is their most important bran d. The seven Ps of internet marketing mentioned earlier not only have to try and make business successful but also do brand building in the process. Product and Service Customization: Companies that have powerful brand awareness on the web all have sites that help consumers do something whether its configuring a computer system (www.dell.com) online or offering personalized services like suburban railway pass ticket in Mumbai (www.rediff.com). Consumer demand and expectations are forecast to drive made-to-order or customized products with rapidly shrinking lead times. Products are configured, as customers want them to be and provide a high level of reliability, excellent quality, and longer life spans. For e.g. Dell computer (www.dell.com) has become a leading company in selling computers because of the customization facility it provided on its site. The consumers could build the own computer by ordering the own configuration. The customization highlights the value-for-money aspect and induces the consumer to buy a product that meets his own requirement The Evolving Value Propositions: The value propositions of goods and services offered in the physical world differ pointedly from those in the digital world. The ultimate aim of the universal marketer is to provide a complete end-to-end consumer experience - right from the promise to satisfy his need to its delivery. But the physical world offers only Point Solutions which is basically a solution of his needs in terms of functional benefits. A credit card, for instance, allows consumers to satisfy the immediate necessity of setting a transaction. But todays consumers are also looking for process and relationship benefit book referrals at no extra cost or e-mail reminders. The physical world is not able to deliver these benefits because of gaps in time, space and memory. The web, on the other hand provides all of these and more (reverse marketing, for example, where consumers seek
out vendors rather than the other way around) by giving the company the ownership and control over all interactions with the consumer The Evolving Risk Profiles: The on-line customer is not a fickle customer, but he is a risky proposition nevertheless. This is because all his online experience will influence consumer perceptions about the brand. If a consumer buys a product from a retailer and is involved in an unhappy purchase experience at the store, he will punish the store. But if the same experience were to occur to him at the companys web site, the consequences would be disastrous for the company if he were to share his experience though different user communities using a combination of chat rooms and electronic mails The Evolving Supply Chain: The transformation being brought about the Web revolution is not limited to just the consumer. The last few years have seen a flurry of suggested business models for doing business in the Internet era. Will the Internet era signal the death of the retailer? Or will a new intermediary come into existence? Technological innovations have made possible two interesting developments - the Choice board system 2 and the Vertical Portal Choice boards are essentially design tools and conduits of information, companies that produce the products need not control them. Dell uses a Choice board system to sell its computers but there are others like Point.com that uses a Choice board to help customers research and buy wireless phones and accessories. The market information that a Choice board collects about customer preferences is absolutely enormous and if the manufacturing company does not control it, the site offering the Choice board can emerge as a powerful intermediary. Vertical portals armed with sophisticated search engines, which specialize in a particular industry or product category, and provide customized information and promote online community development are the next emergent intermediaries. The sophistication and range of information collected on customer preferences will drive emergent business models. The Web will thus facilitate the transformation of the companies form transaction supporters to customer relationship managers.
Critical Success Factors in Online Marketing

Having observed the evolving paradigms of business in the Internet era, there are five critical success factors that the Internet Marketer has to keep in mind. Attracting the right customer: Attracting the Right Customer is the first crucial step. Rising digital penetration would mean that the number of customer visiting particular sites would inevitably go up. While the number of eyeballs or page views has so far been conveniently used as a satisfactory measure by most web sites, it would be foolish to cater to the whole spectrum of digital visitors. Content has to be very target specific. The digital company has to select its target segment by finding out which section of customers are the most
profitable in terms of revenue transactions and who are the customers who generate the maximum number of referrals. Here again it is important to note that the majority of online customers are not seeking the lowest price. Rather they are seeking convenience above everything else. The power of customer referrals has never been so enormous, since word of the mouse spreads faster than word of the mouth. E-Bay attracts more than half of its customers through referrals. Not only do referred customers cost less to acquire than those brought in by advertising or other marketing tools, they also cost less to support since they use their friends who referred them for advice rather than using the companies own technical desk Delivering content value: Delivering Content Value to engage the users interest is the critical importance in retaining customer participation. This is because content serves as a powerful differentiator. Content would include Product enhancements (Software patches for glitches), personalized interactions (through customized navigation paths as seen on the web sites of GM and Toyota) and Problem Resolution (updates of delivery schedules and e-mail responses).Integral to the concept of delivering proper content value is innovation. For e.g. www.campareindia.com Ensuring e Loyalty: Ensuring e Loyalty is vital to the success of any online venture. This is because acquiring customers on the Internet is enormously expensive and unless those customers stick round and make lots of repeat purchases over the years, profits will remain elusive. Contrary to the general view that Web customers are notoriously fickle, they in fact follow the old rules of customer loyalty. Web customers stick to sites that they trust and with time consolidate their purchases with one primary supplier to the extent that purchasing from the suppliers site becomes part of their daily routine. The issue of tru st is integral to the issues of privacy and security. Companies like Amazon.com, which command amazing levels of consumer trust, have used a variety of encryption tools and simple ethical decisions like not accepting money for publishers for independent book reviews to maintain the trust of its customer e Learning to facilitate personalized interactions: E-Learning to facilitate personalized interactions with customers has been the biggest contribution of the Web to the marketing strategists. Customers in traditional bricks-and mortar stores leave no record of their behavior unless they buy something. In the digital marketplace, however technology has made the entire shopping experience a transparent process. For example, if the customer exits the web-site when the price screen appears, he is a price sensitive consumer. Such minute tracking of customer behaviour has major implications for the world of advertising. The Internet may soon be used as a test bed for testing prototypes of marketing and advertising campaigns. By monitoring pages selected, click through, responses generated, and other indicators, the company would be able to discover which parts of a prospective campaign would work, thus reducing the risk of a potential flop. This would make it possible for the company to modify its product offerings much earlier than usual in the product life cycle Providing Digital value to the evolving consumer through his life cycle: Providing Digital value to the evolving consumer through his life cycle has become possible because of customized interactions and emerging business models. These models have often
disturbed the traditional status quo and created new rules of business. The sectors where new business models will emerge or have emerged are the music industry, the financial services industry, the travel industry, the relating segment and the publishing segment. Digital value is delivered to the consumer by promising him convenience, allowing the customer to feel his ownership of the Web experience, and giving the customer a sense of belonging that traverses the physical boundaries.
Benefits of Online Marketing

The reason why internet marketing has become so popular is because they provide three major benefits to Potential buyers: Convenience: Customers can order products 24 hours a day wherever they are. They dont have to sit in traffic, and a parking space, and walk through countless shops to find and examine goods Information: Customers can find reams of comparative information about companies, products, competitors, and prices without leaving their office or home Fewer hassles: Customers dont have to face salespeople or open themselves up to persuasion and emotional factors; they also dont have to wait in line Benefits to marketers: Quick adjustments to market conditions: Companies can quickly add products to their offering and change prices and descriptions. Lower costs: On-line marketers avoid the expense of maintaining a store and the costs of rent, insurance, and utilities. They can produce digital catalogs for much less than the cost of printing and mailing paper catalog Relationship building: On-line marketers can dialogue with consumers and learn from them Audience sizing: Marketers can learn how many people visited their on-line site and how many stopped at particular places on the site. This information can help improve offers and advertisements Clearly, marketers are adding on-line channels to find, reach, communicate, and sell. Internet marketing has at least five great advantages. First, both small and large firms can afford it. Second, there is no real limit on advertising space, in contrast to print and broadcast media. Third, information access and retrieval are fast, compared to overnight mail and even fax. Fourth, the site can be visited by anyone from any place in the world. Fifth, shopping can be done privately and swiftly.
Internet Marketing Trends

Internet marketing is now a critical piece of just about any companys marketing mix. There are few marketing options with the speed, efficiency and reach as internet marketing. And so you should take the time to ensure you are focusing sufficiently on your internet marketing to maximize your revenue and growth. The year 2013 will prove to be another year in which the array of internet marketing vehicles, tools and techniques will continue to increase. To help capitalize on the opportunities, here are 12 internet marketing trends for 2013 that can be considered when planning marketing initiatives throughout the year: Design Matters: Design matters, because design sells. Just look at the success of Apple, Pinterest, Desk.com or Nike. All four websites are stunning, and thats no coincidence. Apple is the most valuable company of all time. It actually carries very few products, though. Its the design that powers Apples value. Nike is a shoe and apparel company, yet pays just as much attention to the design of its website, videos and ads as much as to anything else. Focus on great design for all of your internet marketing in 2013 Marketing Goes Visual: Similarly, communication through visual means is hot and only getting hotter. Whether the explosion in info graphics, or the dramatic rise in the popularity of Pinterest, or the redesigns of Facebook, LinkedIn and Twitter, we are going through a visual revolution. Start figuring out how to make more of your marketing visual in 2013 Parallax Design: Parallax website design incorporates special scrolling techniques whereby background images on the screen move slower than foreground images, creating an illusion of depth on the screen. You can see examples at the following websites: Volkswagon Beetle and Activate (be sure to scroll down the page!). If you are planning a website redesign in 2013, consider incorporating elements of parallax design Mobile Mobile Mobile: Worldwide, there are over 5 Bn mobile users and 1.1 Bn Smartphone subscribers specifically. The iPad was the fastest growing technology product and needs to be connected via mobile channels Video Video Video: More than 4 billion online videos are watched every day. Sixty-eight percent of video watchers share video links. So its clear your audience likes video. On top of this, consider that after 72 hours, a typical person can retain about 10% of text that theyve read, 65% of an image theyve seen, or 95% of a video they watched Cloud Based Tools: To be uber-efficient with your internet marketing efforts, you should be using cloud-based tools. For email marketing, you might be using MailChimp. For SEO, you might be using SEOmoz. For landing page testing, you might be using Unbounce. For heat map analysis, you might be using CrazyEgg. For website analysis, you might be using BoostSuite. Check out all the unbelievably useful options available to you.
The Multi-Screen World: With 86% of mobile internet users actually using their devices while watching TV, and with more than 10,901 Tweets PER SECOND being issued as TV viewers watched Adele win Record of the Year at The Grammys, its clear that we all live in a multi-screen world Social Media Gets Smarter: Facebook has more than 1 Bn users, and Twitter has more than 500 million. Social media is an opportunity for your business, but its been difficult for many businesses to make sense of it all and to gain solid business value out of it. With a growing number of marketing platforms such as Wildfire by Google and ShortStack, and with more granular social media analytics as provided by tools such as SproutSocial, Followerwonk and PageLever, extracting clear meaning from your social marketing will get easier over time Retargeting Goes Mainstream: Retargeting is a means of placing your advertisements in front of your audience after they have left your website without converting. What many marketers fail to realize is that retargeting is one of the most effective internet marketing techniques available. If you are already investing in your site and your marketing campaigns for more site traffic, then it typically pays big dividends to remind the people who left your website without a conversion of your value in solving their needs. Your options for retargeting include Google Remarketing, AdRoll, Retargeter and also Bizo (for exceptional B2B retargeting) Email Marketing: In lead generation campaigns or retailer email marketing, there are always going to be occurrences of form or cart abandonment. However, its a waste to just let the prospect go without reaching out and finding out if you might indeed offer exactly what they want or need. After the abandonment of a registration form or online shopping cart, through email remarketing you can send out an automated email to give your brand another chance at winning the heart and mind of the prospect. According to SeeWhy, 26% of those who abandoned an online shopping cart will return to complete the purchase in the case they receive a remarketing email. Search , Scoial, and PR Collide: Organic search has been incorporating social signals for some time, and the integration of search and social has accelerated with the introduction of Google+ and the Google Knowledge Graph. With Googles Panda and Penguin search algorithm updates, its become extremely clear that quality and value matter. That means high quality content, combined with sincere, transparent social marketing, combined with targeted PR is going to be a triad thats hard to beat Attribution Measurement: If you run multiple forms of internet marketing, such as paid search, SEO, email marketing, display advertising, and retargeting, then it can be difficult to assess the value of each piece of your marketing puzzle. If someone encounters your brand five times in a given week through the different marketing vehicles, whos to say how much credit to give to each of the different pieces. Thats where attribution measurement services come in, whether Google, ClearSaleing or VisualIQ
Internet Advertising
Online advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, Rich Media Ads, Social network advertising, online classified advertising, advertising networks and e-mail marketing, including e-mail spam. Online video directories for brands are a good example of interactive advertising. These directories complement television advertising and allow the viewer to view the commercials of a number of brands. If the advertiser has opted for a response feature, the viewer may then choose to visit the brands website, or interact with the advertiser through other touch points such as email, chat or phone. Response to brand communication is instantaneous, and conversion to business is very high. This is because in contrast to conventional forms of interruptive advertising, the viewer has actually chosen to see the commercial. Marketing over the years more so recently has started being used interchangeably with advertising. Now since the explosion of the internet; advertising paradigms have been constantly changing. The first Web advertisement was placed on the Hot Wired web site in October 1994. AT&T, MCI, Sprint, Volvo, Club Med, ZIMA were the first to try it out and the Internet advertising has come a long way since then.
Internet Advertising Vs Traditional Advertising

Traditional Advertising It is static Space is not a restricting factor Internet Advertising It is dynamic with multimedia - supporting text and graphics video sound all together Space is a problem, as regards size of the banners etc.
The proportion of advertising to editorial is A web page would be 91% editorial and 9% high sometimes 50:50 advertising Does not evoke immediate action Invokes immediate action as you at-least need to click on the ad First response is immediate as when the user clicks, the person is directed to other web page with more details
Response to the action is not immediate
Advertisements are passively received
The user has high attention level and concentration while using the net, and hence they notice the advertisement possible with Internet
Difficult to track the exact number of people This is quite who saw the advertisement. advertisements
Ads are graphic intensive and avoid copy Both copy and graphics are restricted by the overload banner size specifications The costs would be prohibitive to reach a There are no such constraints global audience Advertising does not always target a very This can be very focused focused audience
Objectives of Internet Advertising

Advertisement: As far as advertising on the internet goes, all advertisement will serve to attract the user's attention and draw him to the company, which is advertising Build brand awareness: Direct or indirect methods can be used on the websites to build brand awareness of the different brands of a company. This is where the Internet scores traditional media and methods as explained below Stimulate direct action: Visitors to a company's web site should get involved with the offerings on the site. Valuable customer information can also be captured and tracked for future marketing initiatives Promote its brands: Promotional give - away or contests generate excitement while simultaneously promoting your brands online, aiding off - line sale. Building a culture around its brands: This goes along with that company's traditional advertising Surrogate advertising: This is another means of surrogate advertising of the company, where all forms of traditional advertising fail. Surrogate advertising can be proved to be positive in case of advertising on the Internet
Features of Internet Advertising

Advertising on the Internet has certain unique features that differentiate it from other forms of advertising. They are as follows: Member registration: Member registration is an efficient tool that is used by firms to create their database. Such a database may be used to design promotional campaigns.
Allowing registered users to participate in various events can follow systems of free registration. Online opinion polls: Opinion polls are conducted to obtain the responses from users regarding the firms' products and services besides including topics of general interest. Newsletters: Regular newsletters are sent especially to registered users. These contain information about current updations on the site and activities being performed by the company. Contests and sweepstakes: Contests are useful in attracting new users to websites. They may be for simple things depending on the product or service being advertised. The prizes offered are in a wide range and usually have the logo of the company and the homepage address displayed prominently. Content: The content of the advertisement can be regularly updated with news regarding the activities of the firm. A fact-based section showing the manufacturing processes of a company may also be included. The use of multimedia tools can make this more interactive E-cards: Users send free cards via e-mail from the site of the company advertising the product. The card prominently displays the logo or the baseline of the brand. The cards may be for different occasions such as birthdays, festivals, birthdays, etc. These cards are used to reinforce brand identity. Star endorsers of the brand may also be included in the picture postcard themes Downloads: Downloads may include various utilities for the computer such as icons, desktop patterns, screensavers, themes, etc. Registered users get the opportunity of downloading software. Charts and other informative articles may also be included Coupons: Coupons are used to promote sales off-line. Sending discount coupons for the products and services of the company on special occasions can do this
Types of Internet Advertising

E-mail advertising: Legitimate Email advertising or E-mail marketing is often known as "opt-in e-mail advertising" to distinguish it from spam Affiliate Marketing: Affiliate marketing is a form of online advertising where advertisers place campaigns with a potentially large number of small (and large) publishers, whom are only paid media fees when traffic to the advertiser is garnered, and usually upon a specific measurable campaign result (a form, a sale, a sign-up, etc). Today, this is usually accomplished through contracting with an affiliate network The online retailer used its program to generate low cost brand exposure and provided at the same time small websites a way to earn some supplemental income. Contextual advertising: Many advertising networks display graphical or text-only ads that correspond to the keywords of an Internet search or to the content of the page on which the ad is shown. These ads are believed to have a greater chance of attracting a user,
because they tend to share a similar context as the user's search query. For example, a search query or "flowers" might return an advertisement for a florist's website. Another newer technique is embedding keyword hyperlinks in an article which are sponsored by an advertiser. When a user follows the link, they are sent to a sponsor's website Behavioral targeting: In addition to contextual targeting, online advertising can be targeted based on a user's past click stream. For example, if a user is known to have recently visited a number of automotive shopping / comparison sites based on click stream analysis enabled by cookies stored on the user's computer, that user can then be served auto-related ads when they visit other, non-automotive sites Pay per Click: Search engines place your website on their front page and you pay a set amount per click-through. Sites like Overture also run bids for certain keywords - the more you bid, the higher your site appears on the first page of the search results. Properly run, these campaigns can bring a lot of extra traffic to your website Search Engine Optimization: This is an online advertising service provided by many web media companies. They will look at your target audience, your competitors and the keywords for your business and optimize your website content so that it has a much better chance of appearing on the first page of the search results. You will pay a fee to the consultants for this service. Studies have shown that many searchers prefer to use the "natural" listings provided by the search engines, rather than the paid-for listings Sponsorships: Website sponsorship can come in two formats; regular sponsorship where the advertiser has a space to place the logo and company message, and content sponsorship where the advertiser has limited control and submits their own content to the site as well as having an advert on the page. These sponsorships will be for fixed periods, and need to be on targeted websites to reach the right audience Online Directories: The online equivalent of Yellow Pages, or Industry Directories, these give you basic or enhanced listings on the website. Your details will come up if your sector, location or company name is searched for. Enhanced listings will allow users to clickthrough to your site. Online directory listings are often offered in conjunction with an entry in the printed version of the directory Banner Ads: Banner advertising was the first kind of advertising ever done on the net. A banner can highlight your product/service/offer and by clicking on it the user will be taken to your website, where you can create a suitable landing page to provide his further Banner spaces are usually sold by impressions, or banner views, but it is sometimes sold by click-thru, when you pay only when the user clicks on the banner. Usually horizontal bars across the top of a web page, they offer colour, graphics and often animation, together with the ability to click through to the advertiser's own website Pop-up Ads: These are the small windows that appear when you first get onto a website. Pop-ups appear on your screen in full, pop-downs appear on the bar at the bottom of your screen and you have to open them to get rid of them
Interstitial Adverts: These adverts sometimes referred to as Bridge Adverts, pop up as you move between pages on a site. You have no choice as to whether you view them or not, although you can close them down Floating Ads: These ads appear when you first go to a webpage, and they "float" over the page for five to 30 seconds. While they are on the screen, they obscure your view of the page you are trying to read, and they often block mouse input as well. These ads appear each time that page is refreshed. Floating ads are popular for several reasons: They grab the viewer's attention and cannot be ignored They are animated They have audio/video content like TV ads They can take up the entire screen, therefore from a branding standpoint, they are much more powerful than a banner ad or a sidebar ad They have a high click-through rate of about 3 percent However, many users get highly irritated because of these ads. Unicast Ads: A unicast ad is basically a TV commercial that runs in the browser window. It has enriched audio/video content. The ads can last anywhere from 10 to 30 seconds. These ads have similar branding power as a TV commercial. However, a unicast ad offers something that TV ads cannot -- the ability to click on the ad for more information. These ads are getting very effective, as the average click-through rate is 5% Takeover Ads: Viewers visiting the website will see a large ad when they first come, and then the continuity is maintained by reiterating the same message throughout the site in the form of banners, side bars or buttons. The approach works very well for branding because the brand is visible to viewers throughout the visit to the site. Click-through rates are also high
Internet Advertising Trends

There is no question that the growth of Internet advertising is outpacing offline advertising. As more and more companies realize the real value in advertising their goods and services online, they are diverting funds from other forms of offline advertising to compensate. Consequently, the market share of Internet advertising is continually growing while the market share of offline advertising mediums stagnates or declines. Google, Facebook, Apple, Amazon and plenty of other large companies are innovating at amazing speed to gain control of customers attention. Some are doing it through devices, some through content, and others through infrastructure. A handful of companies have had a huge impact on what we do online and at the same time, new companies, start-ups and individuals are creating amazing solutions
Rather than jumping sequentially from one thing to the next, marketers should consider developing adaptive models that allow for rapid assimilation of new technologies and trends. As it stands, companies may adopt early with some risk, move with the crowd giving up first mover advantage or wait and see until its too painful not to change. The ramp up time to evaluate and adopt new technologies and trends is expensive. As an example, over $100 billion has already been invested in social business and tha ts just a drop in the bucket compared to the next 5 years as companies implement enterprise collaboration platforms and social technologies Companies are going to evolve their ability to adapt more quickly, tune in to trends and data more efficiently and at the same time have the infrastructure and partnerships that will allow them to evolve and innovate at greater speed The new internet no longer exists on your computer as consumers and content shifts to tablet devices and smart phones. The search experience has not only become distinctly different for consumers through user innovations like Siri, interface and back-end changes but also for marketers trying to play Googles game in achieving top search visibility Online tools such as the well known Blogger make publishing on the Internet extremely easy and accessible to people with hardly any technical knowledge. The phenomenon of democratized media results in a landscape of millions of micro-media, most importantly in the following forms: Weblogs (or blogs) are in fact web pages that are extremely easy to update, published by one person or a group. Blogs typically offer the possibility for readers to leave comments on posts, which typically leads to dialogue Podcasts (combination of the words iPod and Broadcast) are essentially radio programs, distributed in MP3 format. Creating a podcast is still relatively easy and very cost-effective. Podcast can be easily downloaded to a portable MP3 player
Videocasts (Video Podcasts) are video files distributed in MPEG-4 format. Homemade videocasts are starting to appear through videocasting, available instantly to the whole world Wikis are types of websites that enable cooperation (open to the public or within a company or group) by allowing people to freely edit all of its content. The result is a publicly edited website, with as little top-down control as possible. The best known wiki is Wikipedia.org, an online encyclopedia that allows all registered users to improve its articles The first three of these new forms of media come with a universal technology for distributing content over the Internet: RSS. RSS is a very important part of all three technologies, as it allows consumers to literally subscribe to content. RSS (Rich Site Summary or Really Simply Syndication) facilitates syndication of content. By subscribing to an RSS feed, content will be delivered automatically to the subscribers computer, rather than him or her going out to a website to find it. This content can be text (weblog or news feed), audio (podcasts) or video (videocasts). These feeds can we viewed in so called RSS readers, software (web based or stand alone) that receives these RSS feeds, interprets them, and shows their content either as articles or as multimedia. New uses for RSS are being developed constantly and according to many, it will be the future standard of distributing content on the Internet, in the broadest sense
Major Online Marketing Agencies in India

With the increasing reach and popularity of the social media, more and more brands and personalities are looking to find space in that media. Social media today is emerging as an important game changer for customer opinion. As the popularity is increasing brands and personalities are looking for experts to effectively manage that space for them. This has brought about opportunity to advertising agencies and social media experts to focus exclusively and create a niche service of providing social media solutions. Here is a list of social media and digital marketing agencies that are quite popular in India. The agencies listed here operate from different locations within India, provide a niche service and have already had some brands and personalities that they serve to. Echovme: EchoVme is a digital marketing firm that specializes in integrated digital marketing consulting, services and training. It is also a research firm that updates and upgrades the elements of virtual marketing ecosystem and creates industry specific roadmaps pertaining to marketing for business successes virtually across different geographies. Echovme has hosted about 48 Successful Social Media Marketing Workshops across Chennai, Colombo, Bangalore, Delhi, Cochin, Pune, Mumbai, Coimbatore and Bhopal and many corporate training programs for: M.O.P Vaishnav College, Chennai, TiE Chennai, TiE
Coimbatore, Nasscom, Madras Advertising Club, Beroe Inc., 2020 MSL (Mumbai, Chennai, Delhi and Bangalore office), Ticketgoose.com, Xcode life sciences etc. Service: Social Media Marketing, Facebook application development, website consulting and revamping, website designing, social media consulting, video marketing, content marketing Brands: Kris Srikkanths Careerstrokes, Dalal Street Investment Journal, Elitad (Spain Based), Andromeda Marketing Pvt. Ltd, Forex Trading Pvt. Ltd, TiE Con Social Media Organizers, Personal Branding executers for leading celebrities and entrepreneurs, Ticketgoose.com, Amrutanjan Healthcare, Ramco Systems, Happiest Minds, Amigo NGO, Cartridge World (Nungambakkam, Chennai), Sams Pizza Chennai, Habilis the best virtual assistants (US), Jeff and Kane Industry Rockstars (Australia), Social Media Consulting for SAP Techniversity Location: Chennai Alive Now: Founded by Adhvith Dhuddu, experienced in social media and new media. Service: Social media packages, social media analytic reports, social media cards Brands: Jamboree, Mantri, Hard Rock Caf, Barista Lavazza, eMids, MOFILM, City Bar 560001, California Pizza Kitchen India, Nandos India, Branding and Marketing Guru Mr. Ramanujam Sridhar Location: Bangalore Bcebwise: With a huge clientele, deal with all aspects of internet media solutions and other advertising and promotional need of clients Service: Internet media solutions, websites, internet advertising, e-newsletters, mobile marketing, online research, content management. Brands: Hindusthan Lever, Microsoft, ITC, Kelloggs Chocos, ABN Amro, Yahoo (India and Singapore), M ONE, MindShare, WNS, Madison, Kingfisher Airlines, PCS Technology, Ruchi, Crest Communications, Indian Institute of Interior Design, Zydus Cadilla, Peerless, BPL, Johnson n Johnson, HP Gas, Star TV, Garnier, Maruti, Crossword, Orange, etc. Location: Mumbai Bloggers Mind: Helps in communicating and engaging with audiences and monetizes presence in social media Service: Brand Monitor, Brand Insight, Brand Buzz Brands: Nokia, Yahoo!, Max Bupa Location: New Delhi
Blogworks: Blogworks helps global brands and organisations engage stakeholders in conversations to share, build communities, draw insights and co-create offerings for business impact Service: Social media programmes, solutions to brands and organizations Brands: Allen Solly, GE, S.Oliver, Cotton, Samsung, Samsung Mobile, Fastrack, Benq, CAA, Ideafarms, Chimes, Freed.in, exchange4media Location: New Delhi Brainwork Technologies: Offers Social Media Optimization services that facilitate various companies in establishing a brand and thereafter, marketing their services and products with the aid of social networking sites Service: Social media marketing, search engine marketing, search engine optimization and so on Brands: NA Location: New Delhi Business Blogging: A social media consultancy that helps businesses leverage the potential use of social media Service: Social media strategy & consulting, Web 2.0 accounts management, corporate blogging services, online event management and PR2.0, online reputation management, SEO friendly corporate website, social media workshop and training Brands: NA Location: Chennai Communicate 2.0: It is an organization that focuses on providing Search Engine Marketing solutions to leading clients in India. Service: Pay Per Click (PPC), Search Engine Optimization (SEO), GAAC/Analytics, Mobile Search, Search Engine Marketing Brands: Bajaj Allianz, Casino Royale, Cholamandalam, Cleartrip, BSP BlackRock Mutual Fund, Essar, Godrej, HDFC Bank, ICICI Bank, ICICI Lombard, India First, Kotak, Metro, Star, TCS Location: Mumbai Catalysts Labs: The organisation deals with evangelising new technologies using new / social media. Design philosophies are utilised to produce effective results by delivering a targeted impact to specific audience groups around the world Service: Social Media Marketing, Technology Evangelism and Slide Deck Design Brands: NA
Location: Bangalore Dzine Garage: It is a full service global digital agency specialising in online branding, strategy and communication and production services. Their offices are in London, Mumbai and Chennai. Service: Online communities and social networks, website design, web application development, eCommerce, website maintenance Brands: Fidelity, Royal Sundaram, RSA, Shriram Transport, Canara-HSBC Life Insurance Location: Chennai
2. Literature Review
Internet marketing, also known as web marketing, online marketing, web advertising, or emarketing, is referred to as the marketing (generally promotion) of products or services overthe Internet. Marketing is used as an abbreviated form for Internet Marketing. Internet marketing is considered to be broad in scope because it not only refers to marketing on the Internet, but also includes marketing done via e-mail and wireless media. Digital customer data and electronic customer relationship management (ECRM) systems are also often grouped together under internet marketing. Internet marketing ties together the creative and technical aspects of the Internet, including design, and development, advertising and sales. Internet marketing also refers to the placement of media along many different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, email marketing, mobile advertising, and Web 2.0 strategies The Indian online advertising market, including classifieds, will grow by a huge 54% in the next 12 months. The research, from the Internet and Mobile Association of India (IAMAI) and IMRB, found that as of March 2012, the industry was worth Rs 2,851 Cr in annual revenue and it is expected to further grow to Rs 4,391 Cr by March 2013. The IAMAI represents the online and VAS players in India. The online advertising market in India is about 11% the size of the conventional or traditional media advertising market. Online advertising has been growing in India, even in the recent economic downturn. According to IAMAI On an average, the digital ad spends have been growing at 25% year-on-year basis. Social media, email marketing, and search marketing is considered as the top three online investment channels. It has been noted that online users in India have exhibited willingness to make purchases over the Internet by getting influenced by the online advertisement; this is quite evident from the growing net commerce industry. The retail industry has also benefited from its online version which has resulted in the growth and expansion of the sector worldwide.
Excerpts from the News Articles

Digital, Minus the Moolah, January 2013 Digital ad spends may still show stark single digit figures - albeit slightly improving with each passing year - but the mood among marketers is upbeat, as they eye the flourishing internet industry as an effective communication channel, both for its wide reach and the heightened level of engagement it helps build for brands. High end departmental store Shoppers Stop took a plunge into digital around two and- a-half years back as a natural response to changing consumer habits. While the first phase was essentially a monologue phase, it gradually transitioned to one with greater interactivity, engagement and dialogue with the online audience. According to Vinay Bhatia, Customer Care Associate and VP - Marketing and Loyalty, Shoppers Stop, for a category like fashion, creation of video content on digital has helped a brick and mortar brand like Shoppers Stop to become a successful online brand. Another seemingly complex sector, BFSI, is also seeing a surge of activity on digital and from merely being an accompaniment; the online medium is gradually becoming its core business. Initially, we were using digital as a marketing medium for lead based campaigns. Then we moved to display and since last year, we have been selling insurance online, explains Sanjay Tripathy, EVP - Marketing, Products and Direct Channels, HDFC Life. Currently, 2-3% of the brands annual turnover comes from digital and for the protection segment - the only segment that is on digital at present- it is 90%. Aditya Save, Head-Media & Digital Marketing, Marico says that marketing spends on digital are growing multifold, but are growing from a small base. Lalitesh Katragadda, Country Head- India Products, Google echoed a similar sentiment. Ad spends are not low. They are accelerating. Its the fastest growing ad horizontal in the country and will continue to be so for the next decade, he said. He also ad ded that once India reaches a tipping point and reaches 300 million consumers online, both ad spends and per page price will increase. Mukund Mohan, CEO in Residence, Microsoft Startup Accelerator , feels its a problem around the world. There are three main reasons why marketers complain about it. Firstly, they say the reach doesnt exist yet. Secondly, the digital expenditure that they have seen in terms on investment online is a lot less than what they see offline. Lastly, most marketers are still a bit older and most of the people who control digital budgets are in their 40s and 50s. As the guys get younger, we will start to see it change and a lot more coming on digital.
Digital marketing is also often looked at as a standalone marketing tool rather than as part of the overall media mix. And this isolation, according to many marketers, is another reason for the low spends. Most people think digital as an extension tool. When you have an e -commerce module, then it makes it much easier to think digital and play on digital. It becomes a key focus rather than just being part of a 360- degree communication, says Tripathy. Those who are still more into the offline environment dont understand the potential online offers. From a spend allocation, for online players 70% of spends go online since thats where the consumers are. Once online marketers start establishing this correlation, spends on digital will grow, says Dhruv Shringi, Vice Chairman, Internet and Mobile Association of India (IAMAI) and CoFounder & Chief Executive Officer, Yatra.com. Jonathan Bill, Senior Vice President, Business Development and Innovation, Vodafone India was of the opinion that better sales quality and understanding the advertisers need will create a more conducive environment for marketers to spend on digital. According to Manish Kalra, Chief Marketing Officer, Makemytrip. com, acquiring customers is a media agnostic exercise. If your consumer spends greater time online, then online is the place to be. In that case, you can track his behaviour and give targeted, sharply defined and customized offers through online advertising and email marketing. If a brands goal is to get new customers, then television is the right place, he says. Arun Sharma, VP Marketing-Head Media & Rural, Bharti Airtel, says, Shift to digital is happening at a good pace. Reach is already there. What we require are creative ideas. Traditional creative agencies need to ramp up their digital departments. Technology is growing at a faster pace than creativity. It is expanding but traditional creative teams first want the money to come in, then they want to invest it. Whoever is ready to take the risk will do well. Mohit Hira, SVP and Regional Business Director, JWT, feels that marketers are indeed spending on digital. Depending on the nature of the target audience, brands are investing on the digital front. On the usage of mobile as a platform, he believes that it is the first screen and a public medium, where people can share everything. Hence, mobile is certainly a gamechanger. Due to the significant reach and enormous amount of time spent by the user, mobile has evolved from being the third screen to the first screen. Dippak Khurana, CEO & Co-Founder, Vserv.mobi says, Marketers are always keen to spend on digital. It becomes the onus of people like us to solve the need gap by looking at targeting the user accurately in this space. Neville Taraporewalla Sr.Director - Emerging Markets - India, Thailand, Malaysia & Korea, Advertising and Online, Microsoft Corporation, Around 10% of the advertising budget of Airtel is on digital, which is huge and I have seen a shift from 2 to 5 to 10% in terms of spends. I
believe as more and more people spend time on the Internet the proportional spends will definitely increase. Read: article
Digital Marketing in India - On Explosive Growth Trajectory, September 2012 According to Vishwadeep Bajaj, Chairman and Managing Director, Value First, Digital Marketing in India is all set to take off on an explosive growth trajectory. Several industry reports have forecast it to grow to the region of 4000 crores by 2016 without considering the classified revenue as part of the digital marketing revenue. I am aggressively bullish on the sector and willing to bet top dollar that the forecasts will be well beaten. My confidence comes from the fact that the industry is at an inflexion point because all the key fundamentals are just right all pieces of the jigsaw are coming together - for the industry to experience the clichd tipping point. I would like to highlight some of the key ecosystem elements, which are all pointing to the industry explosion in the next 2 years. Reach: The most important criterion for the brand manager to adopt any medium at a fundamental level is the reach it can offer. Internet users in the country are now well over 150m and indeed the Mobile users we have lets say at a realistic level are 750m strong. Of these Mobile users, a well over 25m is smart phone users, growing at a fast pace of an additional 15m in calendar year 2012 alone. Couple this large base with the high growth rate of net additions and we get a very large addressable reach. Consumer Behavioural Changes: The growing reach is only useful if it translates into meaningful inventory that is amenable for running advertising (meaning that the advertising performs). This is definitely the case as the digital consumer is now an evolved consumer who is no longer merely surfing but is consuming the medium in meaningful ways including conducting real transactions as is evident from the growth in e-commerce story of India in the last 18 months plus the way it is continuing to scale. Indian digital consumer is spending more time on the medium driven through need for social media, entertainment, communication, search and e-commerce. Infrastructure: Whether we talk of broadband or the mobile infrastructure, both are witnessing positive changes. There is enough governmental push for the broadband rollout as it is a key agenda item on growth drivers for India. On the mobile infrastructure front, India is going to leapfrog certain technologies, which augurs well as one must understand that a substantial part of Internet access in India will be through a mobile device over a mobile data network. Read: article
Shakir Ali is 'Digital Marketing Man of the Year 2012', November 2012 Shakir Ali the founder CEO of E-merchant, one of Indias top digital marketing companies in India was awarded 'Digital Marketing Man of the Year 2012'. Shakir Ali said: Digital marketing is evolving faster than any other market on earth and influencing the world will live in right now. Many companies are shifting from traditional marketing to Internet marketing because it effective form of marketing with proven results. Any business that does not have a strong website, and doesnt use some sort of social media interaction and online advertising, you will be left behind. Digital Marketing is the practice of promoting products and services using digital distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner. The best part of digital or Internet marketing is that it is relatively cheap to implement as compared to traditional marketing but has provided a plethora of opportunity to individuals and relatively small businesses to to do business and compete globally. Read: article
Hindustan Unilever Ltd forays into digital advertising space in a big way, 2013 Sometime in mid 2011, Nitin Paranjpe, CEO of the Rs 22,000-crore Hindustan, found himself taking some unusual lessons: on how to tag a person on Face book, and tweet. Teaching the digitally challenged Paranjpe the ropes of social media was Karthik Perumal, the 32-yearold media services manager of HUL. "Today, there is a generation of consumers growing up only in the digital space," Paranjpe told ET in December 2012. "As the CEO of a company whose business revolves around the consumer, how can I not be clued in to it?" Its learning and in many cases, unlearning that every marketing manager is going through, though in less personalised settings. While Paranjpe has a personal coach, HUL managers have trainers from Google teaching them the vocabulary of the online world, acquainting them with technologies involved, and giving them a digital certification. That's at the back end. The back end is meant to pump the front end, which is fast changing in character. HUL is acquiring momentum in its online and digital drive. In FY13, it is expected to triple ad spends in those mediums, taking their share to 7% of its total ad spend, which was Rs 2,635 crore in FY12, according to analyst estimates. In 2012, HUL launched a massive India-specific initiative, BE Digital, which draws a complete digital road map for premium brands such as Tresamme, Sunsilk, Lakme, Close-up and Surf, for which the target audience online is high. So, against the old approach of thinking about digital after exhausting TV spending on a brand, HUL is integrating social media and mobile into the brands' marketing at the planning stage itself, as it did with Tresamme, a hair care brand. HUL created Tresamme Style Studio, a digital-styling website loaded with 100-odd videos on hair styling, a webcam mirror that lets women style along in real-time, and a tool that lets women test new lengths and looks on their own hair virtually. The company is also working on a semi-digital roadmap for its other brands, which will eventually be scaled up depending on a brand's requirement. "For some brands, the time has already come now, and others will catch up," says Hemant Bakshi, executive director home & personal care, HUL. Marketing consultant Suman Srivastava says HUL still has to master the art of doing something unconventional to make an impression online. "Currently, HUL's digital strategy is complementing its television strategy, while the Internet is all about engaging consumers in a
different way," says Srivastava, founder of Marketing Unplugged, marketing consultancy firm. Part of that re-orientation, adds Srivastava, involves HUL looking beyond traditional ad agencies. "A lot of real innovations are being done by smaller firms," he says. According to an analyst with a foreign brokerage research unit, FMCG companies in India direct around 3% of their ad budget to online. This is a fraction of the 15% spent by auto and telecom sectors on the digital medium. HUL is taking big steps towards that. Read: Article
Vodafone-mydala joint mobile marketing platform crosses six million unique visitors mark, March 2013 mydala, Indias leading online deals and most preferred mobile marketing & service platform and Vodafone, one of Indias leading telecommunications services provider, have said that their joint mobile marketing platform My Delights has crossed the six million mark of unique visitors per month. Vodafone and mydalas association spans across 120 cities with more than one million deals facilitated already by over 80,000 merchants on the joint platform. The partnership allows Vodafone users to shop on their mobile on a range of products and services such as restaurants, spas, fashion accessories, personal care products and a lot more. They can now avail discounts upto 90 % and free services in some cases and products they wish to choose from a menu of their favorite food joint to a Cineplex in their vicinity. Bringing internet value, discounts and offers to the mass market is the aim of the service and, so far, the response has been overwhelming. Said Vivek Mathur, Chief Commercial Officer, Vodafone India, Using USSD, our partnership with mydala enables us to provide our customers with exclusive deals and offers. The combination of technology and easy to use mobile capability is a recipe for success. We are seeing a big uptake in the tier 2 and 3 cities and rural India and this is in line with our strategy to take the benefits of the internet to the masses. Anisha Singh, Founder and CEO, mydala said, There is a huge potential to provide value to all consumers of Vodafone. Our platform allows real-time tapping of Vodafone users, which combined with intelligent data analytics is working towards executing on Vodafones vision of extending value and rewarding their loyal customers. Read: Article
3. Market Research
Research Objective
The primary objective of this research report is to develop deep understanding of the online marketing methods/tools adopted by the online marketing agencies in India. This research study is aimed at providing an overview of the online marketing agencies in India and their growth and sustainability and analysis across the following three key components: Study the growth and methods being adopted by various online marketing agencies in India and analyse the current and forward looking trends and tools used in the online marketing in India Create a sustainable business model of creating one small organization with a seed capital of under INR 5,00,000 and analyze the products and services that can be offered through this business model and strive for growth
Research Scope
The scope of the study has been defined as follows: Geographic Scope: India Industry Focus: Online Marketing
Research Methodology
Secondary Research: To gather information on the online marketing sector, relevant indicators related to the performance of the online marketing, growth and sustainability of online marketing agencies, methods used by various agencies and trends, I have conducted an extensive scan of reliable secondary sources. Below is an indicative list of the sources that leveraged: Websites of major online marketing agencies in India Press releases and news articles Published reports and literature Published studies and articles by subject matter experts Primary Research Online Survey: To understand the current and forward looking trends in online marketing in India, growth and sustainability of online marketing agencies, I have conducted an online survey among the senior level marketing executives/professionals, marketing managers, C-level executives, marketing heads. Survey Questionnaire: Based on information gathered through secondary sources, I have prepared a succinct questionnaire, ensuring an appropriate survey length. The
questionnaire comprised of 11 questions, including 2 open ended questions. The various themes covered in the questionnaire are as follows: Current and forward looking trends Tools and methods utilized by online marketing agencies Challenges and issues faced by online marketing agencies in India Objectives of marketers while investing in online marketing communication Sample Size: 150 respondents divided as follows: Online Advertising Agencies: 60 Industry verticals: 90 Respondent Profiles: I have prepared a list of 150 C-level executives, marketing managers, senior level marketing executives working with the online advertising agencies and across different industry verticals such as retail, travel, banking, real estate, and consumer services Data Synthesis and Analysis: I will use statistical tool such as SPSS to analyze the responses of the survey. I will synthesize and analyze the cleaned survey datasets to understand the trends, growth of online marketing in India. Hence, the sustainability and growth of online marketing agencies in India
4. Business Model
5. Data Collection
Please note that we have sent the survey links to the respondents and their responses are awaited to conduct analysis.
6. Appendix A: Questionnaire
Name.. Profile. Company. Age. Sex.. City.
1. How important is online marketing to reach a mass audience in current scenario? a) Very important, its the foundation of all we do b) Rather important, we consider it valuable c) Important, we use it as part of our digital marketing d) Somewhat important e) Not important 2. Is online marketing is an effective communication and promotion vehicle? a) Very effective b) Effective c) Somewhat effective d) Not at all effective 3. How often do your clients/you use online marketing as a communication channel? a) Daily b) Once a week c) Once a month d) Bimonthly e) Occasionally 4. What is/are the key drivers for online marketing in India? a) Loyal customers b) Discount seeking customers c) Need based d) Not specific 5. How much share of the yearly marketing budget is allocated for the online marketing by your clients/you? a) Less than 10% b) 11% to 30% c) 31% to 51% d) 51% to 75% e) Over 75%
f) Dont know 6. What are the goals behind investing in online marketing for you/your client? a) Customer acquisition b) Customer retention c) Brand awareness d) Other 7. Does investing in online marketing helps marketers to increase their sale? a) Yes b) No 8. Do you/your clients have plans to increase investments in online marketing in India? a) Less than 5% b) 6 to 10% c) 11% to 20% d) 21 to 50% e) Over 51% 9. What are the preferred digital channels by you/your clients? a) Website development b) Email marketing c) Search marketing d) Social media e) Video f) Webcasts 10. What are the forward looking trends in online marketing in India? . 11. What are issues and challenges that can affect the growth of online marketing in India? .. .
7. Appendix B: Case Studies

Carwale.com
"All advertisers in the auto industry should start using Google AdWords, and analyze it to see how much ROI is derived from the online space." Tufail Khan, Vice President Marketing, CarWale.com
Driving Success
CarWale.com, one of Indias leading automotive web portals, allots 80% of its budget to the online medium; a large portion of it goes to Google AdWords.
Firing up the Engine

Launched in October 2005, CarWale.com is now India's leading automotive web portal. Owned by Automotive Exchange Pvt Ltd, it is backed by India's leading early stage venture capital firm Seedfund, and top tier US venture fund Sierra Ventures. It has corporate offices across Mumbai and Delhi. The intent behind forming CarWale was to offer well researched content to both car buyers and sellers in India to enable them to make informed choices. CarWale also connects users to leading car manufacturers like GM, Skoda, Mahindra, and so on. It also has af- filiations with leading insurance and finance companies. Last year CarWale influenced 1.5 lakh new car sales, which amounts to 10% of the total cars sold in the country. Additionally, 30,000 users make inquiries on the website per month, and a significant portion of this traffic converts into sales.
Upshift
Following the encouraging initial response, CarWale.com turned to Google AdWords to help them attract more users. The online medium worked wonders to help them effectively target two different audiences buyers and sellers, on one hand and manufacturers and dealers, on the other. Tufail Khan, Vice President Marketing, finds the online medium aligned to the ROI cen-tric approach of the company. This is the reason CarWale.com has allotted 80% of its advertising budget to the online medium, of which a large portion goes towards Google AdWords. It combines this with offline media campaigns for effective branding.
Cruising in Control
Google AdWords has helped CarWale.com get around 20-35% new visitors per month. According to Tufail, Conversion Tracking in Google AdWords is an effective way to track ROI, and to make future predictions. The Keyword Tool is also used extensively by the in -house team to check search traffic and cost estimates, before adding new keyword to their account. Tufail also finds the new AdWords interface better and easier to navigate.
Driving Directions
Tufail advises, 'All advertisers in the auto industry should start using Google AdWords, and analyze it to see how much ROI is derived from the online space. He also advises using the Display Network for branding purposes.' http://www.google.co.in/intl/en_in/adwords/select/success/carwale.html
Flipkart.com
Flipkart.com aims mostly at people who would like to buy books online in India. What the company calls the steroids for its website are low prices, free shipping and an intuitive interface that makes it very convenient to search for books. The site has a young and trendy look and feel. Flipkart.com was launched by a passionate group of professionals who aimed at giving Indians a good online shopping experience and excellent customer service. Technological initiatives were focused on making the search for books faster and more convenient.
Marketing Efforts
In its social media initiatives, Flipkart.com aims at facilitating an easier conversation channel for customers and users. Conversations are to the point and are targeted at specific issues, thoughts and ideas. Flipkart.com began activities to make its presence felt on Facebook and Twitter about a year ago. The company has also used LinkedIn to connect with people. The popularity of the site has grown through recommendations...people recommending the site to their family, friends and co-workers. And what better platform than social media to leverage word-of-mouth! Flipkart.com recognized that using social media is about being human. The people who manage their channels infuse Flipkart's culture and personality in what they do or say in tandem with their own personality. Social Media have feedback mechanism built into them, which needless to say benefits both the customer and the brand, says Mr. Sachin Bansal, CEO and Co-founder of Flipkart.com. What's key is to listen to what is being said about you (as opposed to hear), and for that matter being said directly to you. Users will be brutally honest if you give them an opportunity. The onus then lies solely upon you and your brand, about what you do with the feedback. That's where we've seen tremendous benefit. Transparency and Honesty is the key. If you value these traits as an organization, Social Media will help amplify it, adds Mr. Bansal.
Result of Efforts
Flipkart.com has a strong presence on Facebook, with a staggering number of fans. The company has more than 690,000 fans and has used easy, interesting conversations to engage them. Flipkart.com has 2,877 followers on twitter. Flipkart.coms Alexa global ranking is 2,101, while its India ranking is 164. http://www.topseos.in/casestudies/surajit-agarwal/case-study-flipkartcom/27369/
Volkswagen India
Volkswagen (VW) is one of the worlds leading automobile manufacturers and the largest carmaker in Europe. As Volkswagen pursues its goal of becoming the number one automaker in the world by 2018, India has become a key component of its strategy. India is currently the worlds second fastest growing car market, with shipments expected to more than double by 2018. As a relatively recent entry into the Indian automotive market, VW needed to raise brand awareness. To address this challenge, Volkswagens marketing team focused one of its key brand pillars, innovation, to make a strong impact throughout the roll-out in India. Innovation was showcased not only in Volkswagens product introductions, but also in its communications and advertising.
Innovative Marketing Strategies Raise Awareness

VW India created groundbreaking campaigns such as the worlds -rst talking newspaper, which used light-sensitive chips to speak to readers about Volkswagen as they turned the pages of their morning newspaper. The talking newspaper ad created a sensation in India, and garnered worldwide attention for taking print advertising to a new level. In one year, brand awareness more than quadrupled, increasing from 8 percent to a high of 37 percent. Volkswagen next turned to digital media to extend its success and create new opportunities for customers to connect with the brand. Lutz Kothe, Head of Marketing for VW India, says, At Volkswagen, innovation is woven into everything we do. In formulating our digital strategy, we looked beyond the obvious for innovative ways to engage our audience. We knew that for many people, their car affects their professional life and their professional identity affects their car choices. This made LinkedIn a natural choice to connect with current and potential car buyers among the growing Indian professional population.
Engaging Working Professionals on LinkedIn

LinkedIn approached Volkswagen India with an opportunity to be the rst auto major to establish a presence on LinkedIn Company Pages. Company Pages provide a branded home base within the LinkedIn community where businesses can showcase their company, products, and services in a trusted, professional environment. Volkswagen India participated in the worldwide launch of Company Pages in November 2010, and soon thereafter opened up their pages to allow LinkedIn members to post reviews and recommendations of their car line in India including the New Beetle, Vento, and Polo. Mr. Lutz Kothe, Head of Marketing & PR, Volkswagen Passenger Cars says We were pleasantly surprised
to see how easy it was to create our Company Page on LinkedIn and start engaging with customers among the LinkedIn community. Furthermore, the quality of interaction was very high.
Recommendation Ads get People Talking

Next, Volkswagen launched a series of Recommendation Ads encouraging more customers to join the conversation. Each ad showcased endorsements of actual LinkedIn members, and invited the community to recommend their favorite Volkswagen model. Volkswagen used LinkedIns broad reach (100 million members worldwide, 9 million in India) and precise targeting capabilities to connect with professionals who matched the buyer proles for their different models. Lutz Kothe said, Volkswagen was the rst company in India to use LinkedIn Recommendation Ads, and the campaign was a success. We went in with a goal of inspiring 500 ecommendations among current and prospective car buyers. In less than 30 days, over 2,700 Volkswagen fans had stepped forward to recommend their favorite cars and share these recommendations with their professional networks. In the same time period, we gained over 2,300 followers who asked to stay abreast of the latest news and developments from Volkswagen. Kothe concludes, In a world where people spend an increasing amount of time at work, thinking about work, and interacting with their work colleagues, we believe its important to foster discussion about Volkswagen products in a professional context. Our innovative partnership with LinkedIn lets our customers learn about Volkswagen products and provides insights. http://marketing.linkedin.com/sites/default/files/pdfs/LinkedIn_VWIndia_CaseStudy2011.pdf

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A Study of Growth and Sustainability of Online Marketing Agencies in India

MBA 4002: Project Work Arun Trikha MBA (PT) 4706/10

--------------------------------------Signature of Student (Arun Trikha)

Arun Trikha Birla Institute of Technology, Mesra, Ranchi, India

Signature Mr. Arun Mittal

Signature Arun Trikha MBA (PT) 4706/10

Online Marketing The Advent of the Internet

Understanding the Internet customers

Brand Building on the Internet

Critical Success Factors in Online Marketing

Benefits of Online Marketing

Internet Marketing Trends

Internet Advertising Vs Traditional Advertising

Response to the action is not immediate

Advertisements are passively received

Objectives of Internet Advertising

Features of Internet Advertising

Types of Internet Advertising

Internet Advertising Trends

Major Online Marketing Agencies in India

Excerpts from the News Articles

7. Appendix B: Case Studies

Firing up the Engine

Innovative Marketing Strategies Raise Awareness

Engaging Working Professionals on LinkedIn

Recommendation Ads get People Talking

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