A Birds Eye View of Online Travel in India and Insights on the Future - WATBlog.com
Firstly I don’t think many of the ‘travel’ portals that mainly sell tickets can be considered as ‘travel’ portals anyway. They are ticketing portals. Or rather they were. Some of them are changing their business models to grow beyond their existing revenue sources.
At a recent summit I spoke to Amitabh Pandey, the head of E – Biz at Thomas Cook, he too was of the opinion that the OTA’s or Online Ticketing Agents need to step up. Currently, with just ticketing they do not hold too much promise. They also aren’t a threat to the big guys like Thomas Cook.
But there are some interesting tie ups happening in the space and many of these portals are looking to expand their scope. They are firstly looking at Travel 2.0 i.e. Travel along with Social Networking Features, Comparisons, Travel Tips, UGC etc. These are feature additions that will make the scope of these portals grow in the consumers mind, which is very important as well (to drive loyalty et al, which at this time is quite pathetic)
TravelGuru bought out Desiya early late last year (December) for $25 Million and it looked to change the fact that 70% of its revenues came from ticketing. It now has 90% of its sales coming from hotel bookings. Further, it is also looking at being the complete holiday portal with things like car rentals, sight seeing packages et al being thrown in or in the pipeline.
Cleartrip has launched Rail Search recently – so even though this is a feature addition within ticketing, the guys at Cleartrip are looking beyond airlines in a big way. Cleartrip expects non airline revenues to go up to 20% this year. Cleartrip also got funded recently for $18.5 Million (They think its “more money than required”). They are looking to use that money to create an Offline Presence. Not too much has been said on their decision to be a full-fledged Online Travel Destination.
MakeMyTrip is clearly looking beyond ticketing and that reflects in their branding as well. They launched “Holiday Plus”sometime back to sell the entire holiday experience online to consumers. MakeMyTrip had also launched some initiatives to go offline; ditto with Indiatimes Travel. They are obviously looking to reach markets that do now have Internet access and engage them.
Incidentally, keeping in mind ‘branding’ – one look at the names of all these portals and it is clear that they intended to have features beyond ticketing at inception. It is just that ticketing, and airline ticketing mostly was the low hanging fruit.
Even though Travel Guru is positioning itself as a strong hotel search booking destination, one firm that is making a headway is HolidayIQ – particularly in the Hotel Search space. They have had some smart moves; they power Google India’s Local Search and are now also featured on Yahoo! India’s Glue Pages.
It seems like along with delivery options, payment options are going to expand as well. There will be:
Credit cards, Net Banking, Cash cards, Payments through the mobile (GPRS + SMS?), Payments by Cash, And more as they come
Along with that there lies some obvious scope for VAS as well. So one could sell Visas, SIM Cards (Matrix as a partner?), Special Credit Cards (with a loyalty feature combined), Shopping Deals through tie ups – and the ideas are endless. These things will enable OTA’s to become complete Travel Solution Providers.
An interesting anecdote – Airtel will soon provide International PCO’s in taxis at the International Airports so that foreign travellers can call home one they land. Also taxi drivers will be able to sell SIM Cards. Distribution is the key and one must remember that in a country like ours, the Internet is not the ONLY medium that can have broad based distribution. A beautiful model I would say.
In any case, Online Travel is expected to be big. It is projected to cross $6 Billion by 2010 according to Dhruv Shringi, CEO of Yatra.
Anyone knows any sources for Online Travel Consumer Behaviour Insights? The IAMAI had an Online Travel Conference Recently (2nd May) – wasn’t able to catch that one.
Sunday, February 1, 2009
Sunday, January 18, 2009
What we googled for during the US elections
- LiveMint, The Wall Street Journal, Nov 10, 2008
Searches related to Obama outnumbered those for McCain 2.3:1, nearly the same as the electoral college results
Mumbai: The US presidential election provided an opportunity for some Indian companies such as Jet Airways (India) Ltd to plug their brands online.
Global popularity: Barack Obama at a campaign rally inVirginia on 28 October. The highest global search-hits for the word Obama came from Kenya, followed by the US, in the week preceding the elections. Jason Reed / Reuters Given the unprecedented online traffic in the week preceding the 4 November election won by Democratic candidate Barack Obama, some key words associated with the historic vote were bought at a premium by search engine marketers, interactive agencies and advertisers.
Two India-related brands that tried to capitalize on the election through search engine marketing and online campaigns were the Reuters India website and Telugu movie star Chiranjeevi’s fledgling Praja Rajyam Party, says Prasanth Mohanachandran, executive director, digital services, Neo@Ogilvy, an arm of OgilvyOne Worldwide.
The firm conducted a detailed study on search results in the run-up to the election.
Mahesh Murthy, founder of digital marketing firm Pinstorm, says his company leveraged election-related words for the Jet Airways campaigns for the Indo-US route and one for Canon dual camcorders (“capture the election”, for instance) aimed at the Singapore market.
The number of people who saw Jet ads on 5 November on Google alone would have been more than twice the usual search volumes, he says.
Karnataka and Tamil Nadu dominated the search in India for issues such as outsourcing and H1B visas
There were personality-driven searches from an Indian viewpoint with respect to the US elections, says Murthy, adding that Obama-related words were sold at a 11% premium to McCain words on Google.
Amar Deep Singh, vice-president of digital marketing agency Interactive Avenues, says key election-related words delivered 20% more daily clicks for ads for client Mypopkorn.com, a video and entertainment portal, with at least 50 US election-related videos in the lasts two days of the elections.
“The cost per click was 60% lower than the campaign average as there was hardly any competition on these key words. We regularly use these type of tactics to deliver value to our clients; we used it last time for UTVi.com and Mypopkorn.com when the US financial meltdown was unfolding with results being declared by various companies such as Lehman Brothers, AIG, etc.” Singh said.
Interestingly, Murthy claims that Indian searchers predicted the electoral college results. Obama-related searches outnumbered McCain-related searches 2.3:1, nearly the same as the electoral college results.
This ratio is based specifically on search volumes that the word Obama got versus McCain on 5 November for an international campaign that bought these words.
Words related to Sarah Palin, the running mate for Republican presidential candidate John McCain, outnumbered searches for her Democratic counterpart Joe Biden 5:1. Also, there were more searches for Obama than for generic US election-related key words, adds Murthy.
In India, Karnataka’s online community led the search for Palin in the month preceding the US election, followed by Maharashtra, Delhi and Tamil Nadu, according to Neo@Ogilvy.
Of course, the IT-savvy south Indian belt of Karnataka and Tamil Nadu dominated the search in India for issues such as outsourcing concerns. And, south Indian states topped the search charts globally for H1B—the US visa programme for tech and other workers—as a secondary word together with Obama, says Mohanachandran.
Interestingly, late US civil rights leader Martin Luther King Jr’s “I have a dream” speech started resonating stronger with online searchers in the US as the campaign advanced and financial turmoil deepened. From the No. 10 spot in the US three months before the election, it rose to No. 4 a month before.
No other country matched the US’ search-hit index of “Obama change”, reflecting the fact that people there associated Obama with change, as his campaign promised, according to the Neo@Ogilvy study.
As a reflection of Obama’s Kenyan roots (Obama’s father was a Kenyan), the word Obama evoked the highest interest levels in Kenya followed by the US in the week preceding the elections, according to the study.
The Neo@Ogilvy study highlights that in the week leading to the US elections, the secondary words most searched for in conjunction with Obama included—“India Pakistan” searched most for by Karnataka and Tamil Nadu online in India, and Kenya, the US and Ethiopia worldwide; “outsourcing”—searched most by Tamil Nadu and Karnataka and again Kenya, the US and Ethiopia worldwide.
Not surprisingly, BPO, or business process outsourcing, was searched for most by Internet surfers in Tamil Nadu and Karnataka in India, and Kenya, the US and Ethiopia globally.
A more disquieting search glossary of words used with Obama included Kashmir and terrorism—both searched for most by Karnataka and Delhi in India and Kenya, the US and Ethiopia worldwide.
Searches related to Obama outnumbered those for McCain 2.3:1, nearly the same as the electoral college results
Mumbai: The US presidential election provided an opportunity for some Indian companies such as Jet Airways (India) Ltd to plug their brands online.
Global popularity: Barack Obama at a campaign rally inVirginia on 28 October. The highest global search-hits for the word Obama came from Kenya, followed by the US, in the week preceding the elections. Jason Reed / Reuters Given the unprecedented online traffic in the week preceding the 4 November election won by Democratic candidate Barack Obama, some key words associated with the historic vote were bought at a premium by search engine marketers, interactive agencies and advertisers.
Two India-related brands that tried to capitalize on the election through search engine marketing and online campaigns were the Reuters India website and Telugu movie star Chiranjeevi’s fledgling Praja Rajyam Party, says Prasanth Mohanachandran, executive director, digital services, Neo@Ogilvy, an arm of OgilvyOne Worldwide.
The firm conducted a detailed study on search results in the run-up to the election.
Mahesh Murthy, founder of digital marketing firm Pinstorm, says his company leveraged election-related words for the Jet Airways campaigns for the Indo-US route and one for Canon dual camcorders (“capture the election”, for instance) aimed at the Singapore market.
The number of people who saw Jet ads on 5 November on Google alone would have been more than twice the usual search volumes, he says.
Karnataka and Tamil Nadu dominated the search in India for issues such as outsourcing and H1B visas
There were personality-driven searches from an Indian viewpoint with respect to the US elections, says Murthy, adding that Obama-related words were sold at a 11% premium to McCain words on Google.
Amar Deep Singh, vice-president of digital marketing agency Interactive Avenues, says key election-related words delivered 20% more daily clicks for ads for client Mypopkorn.com, a video and entertainment portal, with at least 50 US election-related videos in the lasts two days of the elections.
“The cost per click was 60% lower than the campaign average as there was hardly any competition on these key words. We regularly use these type of tactics to deliver value to our clients; we used it last time for UTVi.com and Mypopkorn.com when the US financial meltdown was unfolding with results being declared by various companies such as Lehman Brothers, AIG, etc.” Singh said.
Interestingly, Murthy claims that Indian searchers predicted the electoral college results. Obama-related searches outnumbered McCain-related searches 2.3:1, nearly the same as the electoral college results.
This ratio is based specifically on search volumes that the word Obama got versus McCain on 5 November for an international campaign that bought these words.
Words related to Sarah Palin, the running mate for Republican presidential candidate John McCain, outnumbered searches for her Democratic counterpart Joe Biden 5:1. Also, there were more searches for Obama than for generic US election-related key words, adds Murthy.
In India, Karnataka’s online community led the search for Palin in the month preceding the US election, followed by Maharashtra, Delhi and Tamil Nadu, according to Neo@Ogilvy.
Of course, the IT-savvy south Indian belt of Karnataka and Tamil Nadu dominated the search in India for issues such as outsourcing concerns. And, south Indian states topped the search charts globally for H1B—the US visa programme for tech and other workers—as a secondary word together with Obama, says Mohanachandran.
Interestingly, late US civil rights leader Martin Luther King Jr’s “I have a dream” speech started resonating stronger with online searchers in the US as the campaign advanced and financial turmoil deepened. From the No. 10 spot in the US three months before the election, it rose to No. 4 a month before.
No other country matched the US’ search-hit index of “Obama change”, reflecting the fact that people there associated Obama with change, as his campaign promised, according to the Neo@Ogilvy study.
As a reflection of Obama’s Kenyan roots (Obama’s father was a Kenyan), the word Obama evoked the highest interest levels in Kenya followed by the US in the week preceding the elections, according to the study.
The Neo@Ogilvy study highlights that in the week leading to the US elections, the secondary words most searched for in conjunction with Obama included—“India Pakistan” searched most for by Karnataka and Tamil Nadu online in India, and Kenya, the US and Ethiopia worldwide; “outsourcing”—searched most by Tamil Nadu and Karnataka and again Kenya, the US and Ethiopia worldwide.
Not surprisingly, BPO, or business process outsourcing, was searched for most by Internet surfers in Tamil Nadu and Karnataka in India, and Kenya, the US and Ethiopia globally.
A more disquieting search glossary of words used with Obama included Kashmir and terrorism—both searched for most by Karnataka and Delhi in India and Kenya, the US and Ethiopia worldwide.
Web portals see rise in ads
- Business Line, 2009, Jan 16th
At a time when sales executives with conventional media firms are grappling with fewer advertisements from corporates, their counterparts with Web portals have their hands full.
The reason: a month’s campaign on an online portal costs Rs 25-50 lakh, whereas the same amount can buy them only few days of ‘full page’ advertising space in newspapers depending on their reach.
Also, a static advertisement on a hoarding can cost Rs 18-20 lakh a month depending on the location and a 10-second advertisement on television costs upwards of Rs 4 lakh.
In a recessionary environment, the first cost-cutting measure employed by corporates is to slash advertising in outdoor media, television and other media as they seek to optimise profits, said Mr Prasanth Mohanachandran, head of Neo@Ogilvy, the digital arm of Ogilvy and Mather.
However, since advertising is an integral market of any company’s marketing strategy they continue to invest in online advertising to get maximum returns.
For, Neo@Ogilvy, online advertising has gone up 30 per cent in the last quarter, said Mr Mohanachandran.
During the Asian financial crisis, the measurable medium was direct marketing. “There was around 60 per cent growth in direct marketing during the early 1990s. This time direct marketing has been replaced by online advertising,” he added.
Customer-specific ads
The ones who are raking in the real moolah are those Web portals which offer advertisers the ability to target certain customer segments such as the youth.
“When you are fropper.com I know your age, I know your profile, your likes, dislikes etc. And, hence, our portal lends itself to custom-based advertising,” Mr Gourav Rakshit, Group Head, Online marketing at People Interactive. Over a six-month period, Fropper has seen a 25 per cent rise in Internet and mobile advertising.
Agrees Mr Diptarup Chakraborti, Principal Analyst with Gartner Research. Rising interest in social networking and blogging last year, has forced several brands to rethink online as a serious medium. For example, several automobile companies and customer services firms are doing soft branding on the Net, he observed.
According to an industry source, several corporates are doing entire campaigns of several of their products online.
Moreover, clients are now asking for annual advertising plans, something that has been completely unheard of in the Indian space, said Mr Rishi Khiani, COO of Web 18.
Web 18, which has around 20 portals in different verticals, has reported a 900 per cent growth in traffic in the wake of the economic slowdown and the Mumbai terror attacks, Mr Khiani said.
Mr Leroy Alvares, Country Head at Tribal DDB India, a digital division of Mudra Communications Pvt Ltd said, “In 2008, video advertisements on the Internet went up by over 70 per cent and this year too it will be the most popular form of advertising as more brands are willing to put video ads on the Internet.”
At a time when sales executives with conventional media firms are grappling with fewer advertisements from corporates, their counterparts with Web portals have their hands full.
The reason: a month’s campaign on an online portal costs Rs 25-50 lakh, whereas the same amount can buy them only few days of ‘full page’ advertising space in newspapers depending on their reach.
Also, a static advertisement on a hoarding can cost Rs 18-20 lakh a month depending on the location and a 10-second advertisement on television costs upwards of Rs 4 lakh.
In a recessionary environment, the first cost-cutting measure employed by corporates is to slash advertising in outdoor media, television and other media as they seek to optimise profits, said Mr Prasanth Mohanachandran, head of Neo@Ogilvy, the digital arm of Ogilvy and Mather.
However, since advertising is an integral market of any company’s marketing strategy they continue to invest in online advertising to get maximum returns.
For, Neo@Ogilvy, online advertising has gone up 30 per cent in the last quarter, said Mr Mohanachandran.
During the Asian financial crisis, the measurable medium was direct marketing. “There was around 60 per cent growth in direct marketing during the early 1990s. This time direct marketing has been replaced by online advertising,” he added.
Customer-specific ads
The ones who are raking in the real moolah are those Web portals which offer advertisers the ability to target certain customer segments such as the youth.
“When you are fropper.com I know your age, I know your profile, your likes, dislikes etc. And, hence, our portal lends itself to custom-based advertising,” Mr Gourav Rakshit, Group Head, Online marketing at People Interactive. Over a six-month period, Fropper has seen a 25 per cent rise in Internet and mobile advertising.
Agrees Mr Diptarup Chakraborti, Principal Analyst with Gartner Research. Rising interest in social networking and blogging last year, has forced several brands to rethink online as a serious medium. For example, several automobile companies and customer services firms are doing soft branding on the Net, he observed.
According to an industry source, several corporates are doing entire campaigns of several of their products online.
Moreover, clients are now asking for annual advertising plans, something that has been completely unheard of in the Indian space, said Mr Rishi Khiani, COO of Web 18.
Web 18, which has around 20 portals in different verticals, has reported a 900 per cent growth in traffic in the wake of the economic slowdown and the Mumbai terror attacks, Mr Khiani said.
Mr Leroy Alvares, Country Head at Tribal DDB India, a digital division of Mudra Communications Pvt Ltd said, “In 2008, video advertisements on the Internet went up by over 70 per cent and this year too it will be the most popular form of advertising as more brands are willing to put video ads on the Internet.”
Saturday, January 17, 2009
Ad Start-ups hit the Big League Online
As advertisers seek better returns on their spends, startups in Internet and mobile advertising are poised to make the best of the opportunity, reports Abhijeet Mukherjee - ET, Jan 16, 2009, Page 13
QUITE unlike his peers in the traditional advertising agencies, Harsha J is grateful for the downturn. As advertising budgets come under intense scrutiny in a depressed market, his Bangalore-based web marketing firm Adventure is making the best of the situation, convincing his clients to increase their spends on the online and mobile platforms. Adventure designs webbased marketing material such as emailers and websites, along with developing and running Google AdWords campaigns for its clients. “Almost twothirds of our clients are thinking differently now. Earlier the focus was more on conventional mass media but they gradually realised that online and mobile advertising could be effective and measurable modes to reach their desired target group. We have seen a growth of at least 10-15% over the last couple of months,” he says.
It’s not hard to see why. Compared to television, print, radio and even out-ofhome advertising, Internet and mobile based communication is more easily measurable and interactive. And while the share of such media in overall budgets is still small, it’s growing significantly. A report by IMRB International and the Internet and Mobile Advertising Association of India (IAMAI) estimates that online advertising—including display, search-based and other methods—increased from Rs 425 crore in 2006-07 to Rs 700 crore in the current year. The 250-million mobile user population too makes mobile marketing a lucrative communication channel for brands. Digital marketing firm Pinstorm estimates that the mobile advertising industry including WAP and SMS has grown from Rs 20 crore in 2006-07 to Rs 50 crore in 2008-09. And while the digital advertising industry has not observed shrinkage its current rate of growth at 24% is slower than the anticipated 35%. Ask Samsung’s director marketing for South-West Asia YY Kim who’s sold on the benefits of this new age medium. “Online advertising works very well for our technology-based products like MP3 players, notebook PCs, mobile phones, LCD and Plasma TVs. Our online campaign for notebook PCs in November, 2008 was a success as it doubled visitor traffic to one lakh in the following month,” he says. Online advertising comprises 1% of Samsung adspend in India and is likely to grow to 2% this year. All this spells good news for the scores of startup firms that have emerged around Internet and mobile advertising in India. Aashish Solanki, founder of yet another Bangalore company Net Bramha Studio is among them. It works with other startups to help build their online brand presence from scratch. “We work for startup companies like Game Kraver, My Piction and Nemo Solutions, helping position them and conducting viral marketing campaigns. It helps them get better ROI,” says Solanki. “Even our big clients like Shell are investing in online advertising.”
Accountability is one of the biggest draws of such tech-based media. “Today every advertiser wants to know where each dollar is being spent and the result of it. In a recessionary time, advertisers move money to more measurable mediums,” says Naveen Tewari, CEO of mKhoj, a mobile advertising firm started two years year ago. “We have grown 10 times in the last six months and expanded to 25 countries.” mKhoj’s campaign for Reebok involved creating a WAP portal where visitors could participate in a lucky draw to get a phone call from their favorite stars, and also allowed them to locate the nearest exclusive outlet. According to the company’s website, this campaign drove 450,000 visits to the WAP portal, with over 12% of them locating the nearest Reebok store. “Around 70 to 80 per cent of a brand’s audience can be reached on internet and hence it is up to advertisers, agencies and publishers to churn out innovative ways to address the users effectively. Only then we can hope that the medium can grow faster,” agrees Rahul J Jethva, CEO of Spring Communications, which is also into this space.
“There’s a good 30%-35% cost saving on web vis-a-vis print,” says Subhash Lal of Thinkingdesign, a Delhi-based startup. Launched five months ago by Lal, an NID graduate, the firm provides brand identity, language and strategy services to clients in the fashion, home decor and jewellery businesses.
However, web ads were not a big initial priority for the five-man company. “The downturn forced three or four really good clients to put their plans on hold; others, started insisting on web advertisements instead of print to save on costs,” Lal says. The company is currently designing an online campaign for Taurus, a new women’s wear brand.
What’s even more hot on the scene now is a host of mobile-based applications that enable brands to target customer better, wherever they may be. “There is a high number of mobile and Internet connections and even 3G is round the corner, which would increase activity in that space. With the mobile handset functioning almost like a computer and more user friendly applications available, advertisers see an opportunity for their brands in that space,” says Prathap Suthan, NCD, Cheil Communications.
HSBC conducted a mobile-based promotion with High Networth Individuals (HNIs) at international airports’s departure lounges, offering them applications that would be useful in the country they were travelling to—such as tips on communicating better in the new language or locating a bank branch. According to Vinod Thadani, regional head, mobile, Group M, South Asia, which conducted the campaign for HSBC, a valid database of 14,000 was generated of which almost 30% was converted. “The reach and engagement of mobile is an important factor for this medium. Initially it used more by the finance and travel industries but in 2008 other sectors like lifestyle, apparels and FMCG also joined in. At least 10-15% of digital ad budgets are now planned for the mobile medium,” says Thadani. But while startups are getting a significant share of the online and mobile advertising pie, he cautions that it could be difficult for them to sustain. This is because of the infrastructure requirements as well as the reputation that most large to average level advertisers require to put in their money. “Another challenge, especially for mobile advertising companies is providing a non-intrusive platform as they are considered very per- sonal media,” he adds.
According to Suresh Narasimha, cofounder of TeliBrahma, a provider of Bluetooth-based communication services to brands, the penetration of Bluetooth-enabled mobile phones is increasing. He says acceptance of Bluetooth advertising is 10-15% in retail locations, 30 - 40% in hangout places and more than 60% in events. “There’s more value in digital media, and brands can benefit if they can integrate planning and measurement. Small companies would benefit with increased penetration and change in the mindset,” he says.
QUITE unlike his peers in the traditional advertising agencies, Harsha J is grateful for the downturn. As advertising budgets come under intense scrutiny in a depressed market, his Bangalore-based web marketing firm Adventure is making the best of the situation, convincing his clients to increase their spends on the online and mobile platforms. Adventure designs webbased marketing material such as emailers and websites, along with developing and running Google AdWords campaigns for its clients. “Almost twothirds of our clients are thinking differently now. Earlier the focus was more on conventional mass media but they gradually realised that online and mobile advertising could be effective and measurable modes to reach their desired target group. We have seen a growth of at least 10-15% over the last couple of months,” he says.
It’s not hard to see why. Compared to television, print, radio and even out-ofhome advertising, Internet and mobile based communication is more easily measurable and interactive. And while the share of such media in overall budgets is still small, it’s growing significantly. A report by IMRB International and the Internet and Mobile Advertising Association of India (IAMAI) estimates that online advertising—including display, search-based and other methods—increased from Rs 425 crore in 2006-07 to Rs 700 crore in the current year. The 250-million mobile user population too makes mobile marketing a lucrative communication channel for brands. Digital marketing firm Pinstorm estimates that the mobile advertising industry including WAP and SMS has grown from Rs 20 crore in 2006-07 to Rs 50 crore in 2008-09. And while the digital advertising industry has not observed shrinkage its current rate of growth at 24% is slower than the anticipated 35%. Ask Samsung’s director marketing for South-West Asia YY Kim who’s sold on the benefits of this new age medium. “Online advertising works very well for our technology-based products like MP3 players, notebook PCs, mobile phones, LCD and Plasma TVs. Our online campaign for notebook PCs in November, 2008 was a success as it doubled visitor traffic to one lakh in the following month,” he says. Online advertising comprises 1% of Samsung adspend in India and is likely to grow to 2% this year. All this spells good news for the scores of startup firms that have emerged around Internet and mobile advertising in India. Aashish Solanki, founder of yet another Bangalore company Net Bramha Studio is among them. It works with other startups to help build their online brand presence from scratch. “We work for startup companies like Game Kraver, My Piction and Nemo Solutions, helping position them and conducting viral marketing campaigns. It helps them get better ROI,” says Solanki. “Even our big clients like Shell are investing in online advertising.”
Accountability is one of the biggest draws of such tech-based media. “Today every advertiser wants to know where each dollar is being spent and the result of it. In a recessionary time, advertisers move money to more measurable mediums,” says Naveen Tewari, CEO of mKhoj, a mobile advertising firm started two years year ago. “We have grown 10 times in the last six months and expanded to 25 countries.” mKhoj’s campaign for Reebok involved creating a WAP portal where visitors could participate in a lucky draw to get a phone call from their favorite stars, and also allowed them to locate the nearest exclusive outlet. According to the company’s website, this campaign drove 450,000 visits to the WAP portal, with over 12% of them locating the nearest Reebok store. “Around 70 to 80 per cent of a brand’s audience can be reached on internet and hence it is up to advertisers, agencies and publishers to churn out innovative ways to address the users effectively. Only then we can hope that the medium can grow faster,” agrees Rahul J Jethva, CEO of Spring Communications, which is also into this space.
“There’s a good 30%-35% cost saving on web vis-a-vis print,” says Subhash Lal of Thinkingdesign, a Delhi-based startup. Launched five months ago by Lal, an NID graduate, the firm provides brand identity, language and strategy services to clients in the fashion, home decor and jewellery businesses.
However, web ads were not a big initial priority for the five-man company. “The downturn forced three or four really good clients to put their plans on hold; others, started insisting on web advertisements instead of print to save on costs,” Lal says. The company is currently designing an online campaign for Taurus, a new women’s wear brand.
What’s even more hot on the scene now is a host of mobile-based applications that enable brands to target customer better, wherever they may be. “There is a high number of mobile and Internet connections and even 3G is round the corner, which would increase activity in that space. With the mobile handset functioning almost like a computer and more user friendly applications available, advertisers see an opportunity for their brands in that space,” says Prathap Suthan, NCD, Cheil Communications.
HSBC conducted a mobile-based promotion with High Networth Individuals (HNIs) at international airports’s departure lounges, offering them applications that would be useful in the country they were travelling to—such as tips on communicating better in the new language or locating a bank branch. According to Vinod Thadani, regional head, mobile, Group M, South Asia, which conducted the campaign for HSBC, a valid database of 14,000 was generated of which almost 30% was converted. “The reach and engagement of mobile is an important factor for this medium. Initially it used more by the finance and travel industries but in 2008 other sectors like lifestyle, apparels and FMCG also joined in. At least 10-15% of digital ad budgets are now planned for the mobile medium,” says Thadani. But while startups are getting a significant share of the online and mobile advertising pie, he cautions that it could be difficult for them to sustain. This is because of the infrastructure requirements as well as the reputation that most large to average level advertisers require to put in their money. “Another challenge, especially for mobile advertising companies is providing a non-intrusive platform as they are considered very per- sonal media,” he adds.
According to Suresh Narasimha, cofounder of TeliBrahma, a provider of Bluetooth-based communication services to brands, the penetration of Bluetooth-enabled mobile phones is increasing. He says acceptance of Bluetooth advertising is 10-15% in retail locations, 30 - 40% in hangout places and more than 60% in events. “There’s more value in digital media, and brands can benefit if they can integrate planning and measurement. Small companies would benefit with increased penetration and change in the mindset,” he says.
Friday, January 9, 2009
Enterprise Solutions for the Indian SMB Market - Indian Vendors vs Foreign Players
Enter 'price' Quotient - ET, 9 Jan, 2009 (Page 13)
THE world of enterprise technology—software, hardware, networks and systems —was and is still dominated by foreign players. The SAPs, McAfees and IBMs have held sway over the market for many years because of their comprehensive product portfolios, extensive reach and reputation. But a new breed of enterprise product makers in India are gearing up for a fight both in the domestic and international arena. They believe their products are as good as, if not better, than those sold by the multinational companies. They claim to offer more bang for the buck while maintaining high standards of turnaround time and service quality. These firms are now eyeing the meltdown as an opportunity to showcase their offerings to cost-conscious corporates. Meet the homegrown companies that are delivering, maintaining and protecting the torrential flood of data that Indian industry feeds on everyday.
The 2002-born Spamjadoo, which claims to offer a one-of-its-kind spam elimination mechanism, counts among its clients the Reserve Bank of India (Mysore), JK Cement, MTNL Mumbai and Delhi, and Spectranet Delhi. Its founder, Dr Ajay Data, is a strong proponent of the power of Indian product firms. “Corporate clients have become extremely price-sensitive today, especially in light of the events following the global meltdown. From the perspective of a small Indian firm, paying dollars for a foreign software not only eats into its resources; exchange rate instabilities also cause delays and hassles in updates and maintenance.” He adds, “We’ve worked with clients who want to switch over from Trend Micro, Cloudmark and McAfee to our solution on grounds of performance and costs. In addition, during the last few months, we’ve seen inquiries jump between 10-15% and it is possible this is linked to the cost cutting wave in India and abroad.”
Spamjadoo is adopting a two-pronged strategy to capture a significant share of the $20 billion global anti-spam market. It is relying on a competitive pricing strategy (with a hosted license fee of about Rs 200 a month) and deals with companies such as HCL, Wipro and IBM (currently in the pipeline) to reach out to a wide range of corporates through their portfolio offerings. Spamjadoo is also revamping its website to reach out to more international clients. It currently earns about Rs 2 crores in overseas revenues a year.
On the other hand, managed services company NetMagic Solutions has big dreams for its US division in the remote infrastructure management and data centre businesses. “We’ve been present in the US for five years, and work with about 35 clients. We’re quite bullish on the American market, as the situation there has brought back a strong focus on capital preservation. Instead of incurring people hiring and training costs, US companies are now inclined to outsource their technology infrastructure,” says Sharad Sanghi, CEO and founder, NetMagic Solutions. Accordingly, Netmagic has decided to grow its sales team in the US. “Cost arbitrage apart, it is
quality that companies really look for.
We are targeting 150% annual
growth in the US,” says
Sanghi.
Kolkata-based Coral Softwares Ltd sees the SMB segment in India as a strong area for growth. The company builds customised ERP solutions for small companies stuck with unwieldy large-enterprise packages. Prem Chand Kankaria, managing director, says that they key is understanding local requirements. “Our software encompasses things like excise, service tax, and VAT,” says Kankaria, pointing out why Coral has an edge over more generic packages. The firm has also developed products like X-ise, which they claim is India’s first central excise software to manage records related to, as the name suggests, central excise and companies like Amul, Glaxo SmithKline, Kodak and Lafarge have implemented the same. Coral introduced its eponymously named ERP software around a year ago, after four years of development and already has around a dozen clients. In just twelve months since it developed the product, the company is targeting a revenue of Rs 2.5 crore and plans to increase the number of customers by five times in the coming fiscal. However, Kankaria cautions that shifting from one ERP to the other is a big exercise, involving renewed installation and training expenses across the organisation. Experts like Subir Raha, founder, Tridea, too warn that switching a package is a costly exercise and it is always better to be aware of what you’re letting yourself in for.
For Kankaria, though, the recession has brought more sweet tidings. Earlier, he had customers who wanted to implement ERP without ‘really knowing much about it’. Today when purses are tighter, he sees customers having a more focused approach and being informed about what they want. “When our clients know exactly what they want, we can deliver a well-tailored product for them,” says Kankaria. Coral currently plans to set up offices in SAARC countries, West Asia, and Brazil and Indonesia and targets Rs 100 crore in revenues by 2010.
Some private equity funds too, are insisting that Indian products make more all-round sense. “For our investee companies, we prefer Indian products, but it has to come with all the required features. Given today’s scenario, cost is a very important concern and Indian products are certainly lower in cost. Even maintenance costs later are lower,” says Akash Moondhra, head (retail practice), Baring India.
InfrasoftTech is an integrated financial software solutions enterprise that started out in 1995, making branch level software for some Indian banks. The firm builds solutions in retail and investment banking, eChannels, trading, wealth management, among other products.
The company believes that its USP is its product agility. Hanuman Tripathi, CEO of InfrasoftTech says that most international product companies are very risk-averse when it comes to making changes to their product and bringing out new upgrades. “Because of this, maintenance of international software products becomes difficult for companies,” he says. In comparison, Indian software product companies, because they started creating products recently, are taking an architecture-centric development approach in product development. “They diversify into related areas quickly and so keep upgrading their products to keep them from becoming obsolete. This also ensures a longer shelf life for Indian software products, compared to international ones,” says Tripathi.
A fifth of InfrasoftTech’s business comes from the Indian market and it has seen consistent growth here, though slower than in its international markets. They are expecting a turnover of Rs 120 crore in FY 2008-09.
Interestingly, InfrasoftTech is itself considering implementing an ERP package in-house. Tripathi says he would prefer an Indian product as long as it provided all the features and functionalities that international products do. “An Indian product will surely be cheaper and as long as business needs are met, we would prefer that,” says Tripathi, “It will also be easier to upgrade and get support when needed.”
One big problem with Indian product companies, though, is that they don’t realise the value of branding. “People buy international products because of the strong branding. Brand recall has been worked on very hard by these companies. Indian companies have to realise that they need to spend on brand creation, which is not just advertising but also how a customer associates with the brand,” Tripathi says.
Trying to take care of this perception is homegrown security solutions firm MicroWorld. The 14-year old Mumbai-based company has a range of web and computer security solutions and boasts of having names like Godrej, Crompton Greaves, Essel Packaging, etc. in its customer list. Already a known name in Europe, it has now trained its guns on India, admittedly a difficult market. MicroWorld recently became the first Indian anti-virus security company to start retail operations in India. Govind Rammurthy, CEO & MD, MicroWorld says, “In the last 4-5 years, the market for software products has transformed, with incomes rising and the economy booming. Indian product companies are very strong technically and there is no doubt the stage is set for a fight in the online security market between local and international players.”
Half of MicroWorld’s revenues still come from the Europe and 15-20% from the US, while the rest is from India. Rammurthy says that international
security software like McAfee, Norton, etc. are
difficult to deploy and upgrade. “Our nimbleness is what separates us from the
competition,” he says. He too, agrees
that Indian vendors have a real opportunity to gain market share in the
slowdown. “There is a great opportunity out there; it is up to Indian vendors to grab it,” he says simply.
THE world of enterprise technology—software, hardware, networks and systems —was and is still dominated by foreign players. The SAPs, McAfees and IBMs have held sway over the market for many years because of their comprehensive product portfolios, extensive reach and reputation. But a new breed of enterprise product makers in India are gearing up for a fight both in the domestic and international arena. They believe their products are as good as, if not better, than those sold by the multinational companies. They claim to offer more bang for the buck while maintaining high standards of turnaround time and service quality. These firms are now eyeing the meltdown as an opportunity to showcase their offerings to cost-conscious corporates. Meet the homegrown companies that are delivering, maintaining and protecting the torrential flood of data that Indian industry feeds on everyday.
The 2002-born Spamjadoo, which claims to offer a one-of-its-kind spam elimination mechanism, counts among its clients the Reserve Bank of India (Mysore), JK Cement, MTNL Mumbai and Delhi, and Spectranet Delhi. Its founder, Dr Ajay Data, is a strong proponent of the power of Indian product firms. “Corporate clients have become extremely price-sensitive today, especially in light of the events following the global meltdown. From the perspective of a small Indian firm, paying dollars for a foreign software not only eats into its resources; exchange rate instabilities also cause delays and hassles in updates and maintenance.” He adds, “We’ve worked with clients who want to switch over from Trend Micro, Cloudmark and McAfee to our solution on grounds of performance and costs. In addition, during the last few months, we’ve seen inquiries jump between 10-15% and it is possible this is linked to the cost cutting wave in India and abroad.”
Spamjadoo is adopting a two-pronged strategy to capture a significant share of the $20 billion global anti-spam market. It is relying on a competitive pricing strategy (with a hosted license fee of about Rs 200 a month) and deals with companies such as HCL, Wipro and IBM (currently in the pipeline) to reach out to a wide range of corporates through their portfolio offerings. Spamjadoo is also revamping its website to reach out to more international clients. It currently earns about Rs 2 crores in overseas revenues a year.
On the other hand, managed services company NetMagic Solutions has big dreams for its US division in the remote infrastructure management and data centre businesses. “We’ve been present in the US for five years, and work with about 35 clients. We’re quite bullish on the American market, as the situation there has brought back a strong focus on capital preservation. Instead of incurring people hiring and training costs, US companies are now inclined to outsource their technology infrastructure,” says Sharad Sanghi, CEO and founder, NetMagic Solutions. Accordingly, Netmagic has decided to grow its sales team in the US. “Cost arbitrage apart, it is
quality that companies really look for.
We are targeting 150% annual
growth in the US,” says
Sanghi.
Kolkata-based Coral Softwares Ltd sees the SMB segment in India as a strong area for growth. The company builds customised ERP solutions for small companies stuck with unwieldy large-enterprise packages. Prem Chand Kankaria, managing director, says that they key is understanding local requirements. “Our software encompasses things like excise, service tax, and VAT,” says Kankaria, pointing out why Coral has an edge over more generic packages. The firm has also developed products like X-ise, which they claim is India’s first central excise software to manage records related to, as the name suggests, central excise and companies like Amul, Glaxo SmithKline, Kodak and Lafarge have implemented the same. Coral introduced its eponymously named ERP software around a year ago, after four years of development and already has around a dozen clients. In just twelve months since it developed the product, the company is targeting a revenue of Rs 2.5 crore and plans to increase the number of customers by five times in the coming fiscal. However, Kankaria cautions that shifting from one ERP to the other is a big exercise, involving renewed installation and training expenses across the organisation. Experts like Subir Raha, founder, Tridea, too warn that switching a package is a costly exercise and it is always better to be aware of what you’re letting yourself in for.
For Kankaria, though, the recession has brought more sweet tidings. Earlier, he had customers who wanted to implement ERP without ‘really knowing much about it’. Today when purses are tighter, he sees customers having a more focused approach and being informed about what they want. “When our clients know exactly what they want, we can deliver a well-tailored product for them,” says Kankaria. Coral currently plans to set up offices in SAARC countries, West Asia, and Brazil and Indonesia and targets Rs 100 crore in revenues by 2010.
Some private equity funds too, are insisting that Indian products make more all-round sense. “For our investee companies, we prefer Indian products, but it has to come with all the required features. Given today’s scenario, cost is a very important concern and Indian products are certainly lower in cost. Even maintenance costs later are lower,” says Akash Moondhra, head (retail practice), Baring India.
InfrasoftTech is an integrated financial software solutions enterprise that started out in 1995, making branch level software for some Indian banks. The firm builds solutions in retail and investment banking, eChannels, trading, wealth management, among other products.
The company believes that its USP is its product agility. Hanuman Tripathi, CEO of InfrasoftTech says that most international product companies are very risk-averse when it comes to making changes to their product and bringing out new upgrades. “Because of this, maintenance of international software products becomes difficult for companies,” he says. In comparison, Indian software product companies, because they started creating products recently, are taking an architecture-centric development approach in product development. “They diversify into related areas quickly and so keep upgrading their products to keep them from becoming obsolete. This also ensures a longer shelf life for Indian software products, compared to international ones,” says Tripathi.
A fifth of InfrasoftTech’s business comes from the Indian market and it has seen consistent growth here, though slower than in its international markets. They are expecting a turnover of Rs 120 crore in FY 2008-09.
Interestingly, InfrasoftTech is itself considering implementing an ERP package in-house. Tripathi says he would prefer an Indian product as long as it provided all the features and functionalities that international products do. “An Indian product will surely be cheaper and as long as business needs are met, we would prefer that,” says Tripathi, “It will also be easier to upgrade and get support when needed.”
One big problem with Indian product companies, though, is that they don’t realise the value of branding. “People buy international products because of the strong branding. Brand recall has been worked on very hard by these companies. Indian companies have to realise that they need to spend on brand creation, which is not just advertising but also how a customer associates with the brand,” Tripathi says.
Trying to take care of this perception is homegrown security solutions firm MicroWorld. The 14-year old Mumbai-based company has a range of web and computer security solutions and boasts of having names like Godrej, Crompton Greaves, Essel Packaging, etc. in its customer list. Already a known name in Europe, it has now trained its guns on India, admittedly a difficult market. MicroWorld recently became the first Indian anti-virus security company to start retail operations in India. Govind Rammurthy, CEO & MD, MicroWorld says, “In the last 4-5 years, the market for software products has transformed, with incomes rising and the economy booming. Indian product companies are very strong technically and there is no doubt the stage is set for a fight in the online security market between local and international players.”
Half of MicroWorld’s revenues still come from the Europe and 15-20% from the US, while the rest is from India. Rammurthy says that international
security software like McAfee, Norton, etc. are
difficult to deploy and upgrade. “Our nimbleness is what separates us from the
competition,” he says. He too, agrees
that Indian vendors have a real opportunity to gain market share in the
slowdown. “There is a great opportunity out there; it is up to Indian vendors to grab it,” he says simply.
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