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The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

Digital Marketing in India - On Explosive Growth Trajectory

Vishwadeep Bajaj
Chairman & Managing Director-ValueFirst
Thursday, August 30, 2012
Vishwadeep Bajaj
Incepted in 2003, ValueFirst, is a digital media company in India. In addition, ValueFirst has built and acquired several digital properties recently like Way2sms, 160by2, mGinger through which it owns an ever growing profiled opt-in subscriber base of 54 million registered users. The company with over 500 employees across India is targeting revenue of over INR 250 Cr in FY 12-13 and looking to IPO in the next 18- 24 months. The last funding of $12.9 million was raised in the year 2011 from Headland Capital Partners and NEA.

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 clichéd 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. Further this base now can be targeted using profiling methods, which several digital publishers have adopted on their own opt-in subscribers. Key changes that are contributing to this growth in reach are cheaper access devices (aka netbooks, laptops, tablets, smart phones etc.) and lowering access costs (falling mobile data and broadband tariffs). The predictability around the growth in reach as well as ability to target this reach is very comforting for the brand manager.

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. On the mobile side, consumers have downloaded mobile application instances that support in-app advertising and are creating billions of advertising impressions per month as and when the consumers use such applications.

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.

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