Arun Tadanki, Managing Director, Yahoo!. Advertising Expenditure by Type (2009) Why is Internet Advertising still so small?

Arun Tadanki, Managing Director, Yahoo!

Arun Tadanki, Managing Director, Yahoo!

Advertising Expenditure by Type (2009)

Why is Internet Advertising still so small?Why is Internet Advertising still so small?

Myth #1:Internet Advertising Market is still small

because the number of users on Internet is <5% of population

Internet needs to monetize better

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2009 (MM Users)

English Newspapers Internet

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2009 (INR Crores)

English Newspapers Internet

No. of Users (MM) Ad Revenue (INR Crores)

Myth #2:Advertisers allocate resources based on

quantitative logic

•A leading auto manufacturer in India, stated that over 80% of their consumers & prospective consumers are online.

•Yet, less than 3% of their budget is invested online!

•What’s worse, that online budget is primarily to purchase leads @ INR 150 per Test Drive form filled up (for a 15Lac car) !

•A leading auto manufacturer in India, stated that over 80% of their consumers & prospective consumers are online.

•Yet, less than 3% of their budget is invested online!

•What’s worse, that online budget is primarily to purchase leads @ INR 150 per Test Drive form filled up (for a 15Lac car) !

Advertisers haven’t seen basic rationale for advertising online

Myth #3:We can test the waters with Internet

Advertising with small budgets

Can we test the effectiveness of Radio medium with 5 lacs?

Can we put up 2 billboards in a city and test whether outdoor works or not?

Every medium needs a minimum threshold level before an advertiser can evaluate

Myth #4:Effectiveness of Creative Strategy is the responsibility of the advertiser

•Publishers & Agencies must invest much higher quality resources to build powerful campaigns online.

•Advertisers must remunerate agencies in a fair manner to encourage such investments

Myth #5:Advertisers judge the effectiveness of advertising based primarily on data.

Internet has an advantage because it is a measurable medium

TV Advertising Works!

Print Advertising Works!

Outdoor Advertising Works!

Does Internet Advertising Work?

• Can we prove it without any numbers?

• Can we recall any memorable online campaigns?

• Is there any consumer brand that is widely recognized as “built by the Internet medium”?

COFFEETING CASE STUDYBRAND BUILDING COMMUNITY STYLE…

Some Facts On Taiwan The Total Online Audience in Taiwan stands at 10MM users. (45%

Internet penetration) Yahoo! Taiwan reaches 97% of this online audience Television is Yahoo!’s major competition for age 15-39 consumers

The Need For CoffeetingMajor Challenge for online media – Big Brands still needed convincing!

“It’s nice to have an online component in my media mix, but TV or Print is a must”

“Online media is great for promotion campaign but not for branding”

COFFEETING: A WELL-DESIGNED EXPERIMENT

Create a virtual brand ADVERTISE ONLINE ONLY

THE RESULT: INSTANT INDUSTRY ATTENTION

High Attention among target advertisers•2 hours after launch: Many agencies called to ask who the advertiser is. Including Ogilvy& Mather, Zenith Media, Carat Media, Media Pallette, FCB, etc

•2 days after launch: All major market players (beverages) called to check if this is a competitors’ movement

Significant Media Buzz

• TV news exposure: the Big idea and how it promoted internet media

• Chinatimes, Apple Daily: Why no products in market yet?

THE RESULT: BRAND AWARENESS QUANTIFIED

via Y! online survey tool

With $200K online media spending only (no traditional communication), brand awareness of the new Coffeeting brand increased dramatically:

1wk 2wks 3.5wks0% 10.6%　 20.3% 　

Compared to the top two leading coffee brands in Taiwan, Coffeeting became a strong competitor within just four weeks:

Maya: 28%, Dydo: 20.7%

IMPACT – LICENSING OPPORTUNITY! Top 2 beverage companies have approached Y! to buy

the brand Coffee Ting would become the first and ever brand

which is built online virtually prior to rolling out into real

products!

Sum Up

•Internet Medium is large enough today

•We must demonstrate the ability to build brands online and not just deliver clicks and leads, if the big bucks have to come online

Thank You