Digital marketing: still to evolve in India

Somehow digital marketing hasn’t taken off in India. At least, not in the way one would have expected, considering India’s penchant for the Internet.

According to internetworldstats.com, India had 42 million Internet users in 2007, with a penetration of 3.7%. International Telecommunication Union (ITU), however, pegs the figure much higher at 60 million users as of September 2007, with a 5.3% penetration. Even then, compared to the United States with over 215 million Internet users and a penetration of 71.4% (Nielsen//NetRatings, November 2007), India has a lot to catch up.

And, as far as digital business goes, it’s a dismal picture. According to a recent Exchange4Media article by Rosy Ngaihte covering the India Digital Summit 2008, “spends on Internet advertising in India is just 1.8 per cent.”

What seems to be the problem with digital India? Plenty, if we go by what the market leaders have to say.

The same Exchange4Media article quotes V Ramani, Co-founder and Vice-Chairman of Connecturf, a conglomerate of digital marketing companies in India: “The audience for digital advertising is fragmented and there is low penetration among women, teenagers, language consumers. Also, there is limited geo-targeting and there is no trade exposure.”

Havas Media’s Vishnu Mohan, CEO-APAC, is more hopeful: “There is enormous growth in digital marketing, although it is still in the process of evolution. Digital media as a medium will be a substitution for TV ad sales, but traditional media will continue along side. To enable digital access, the facts and processes need to be addressed better… and along with that clients also need to be educated.”

There’s more. With low ownership of PCs and poor Internet connectivity, digital marketing in India may need to rely on other digital media solutions to prosper. For instance, the mobilephone market may offer a solution for growth. According to Telecom Regulatory Authority of India (TRAI), India had over 225 million mobile subscribers as of November 2007, or almost a 20% penetration.

[According to the US Federal Communications Commission, as of June 2007, the United States had 243 million subscribers, a 81% penetration.]

Perhaps, that’s where India’s digital marketing business will come from – from mobilephone users (and not the Internet). Almost 2 years ago, I remember Rajesh Jain, CEO Netcore, saying that the future of digital marketing in India will be built around the mobilephone (or words to that effect).

Maybe Mr Jain was right. Maybe it’s too early to tell. Whatever the case may be, as we see it now, India’s digital marketing business is still to evolve into an industry of some reckoning.

[Citation: India Digital Summit 2008: ‘Digital media as a medium will be a substitution for TV ad sales’, article by Rosy Ngaihte, Exchange4Media, 11 January 2008.]