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3/3/2014

Digital Marketing
Landscape in India
2014

Siddh
[COMPANY NAME]
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1.Overall Digital Landscape in India

1.1 Introduction:
The rapid evolution of telecommunications, internet, and computing technologies tremendously
influencing the businesses and their customers in India. The Internet is changing the way
customers shop, socialize, create and share information, ideas, and things around the globe.
Internet users and e-commerce are rapidly growing in India. Consumer are accessing e-
commerce sites using multiple internet enabled devices with different operating systems,
hardware, and internet accessing capabilities which influenced the companies to develop new
strategies to track the traces of consumer actions across channels and engage with them. Though
digital marketing helped companies to achieve this goal, it threw challenges to businesses in
terms of adopting new technologies rapidly and measuring the impact of digital marketing. This
article analyzes the rapid changes in the demographics of India, internet trends, and e-commerce
trends and challenges and opportunities for digital marketers.
To understand the influence of these rapid changes on Indian businesses and consumers, we need
to understand the demographic diversity of India. The following figure shows the important
Indian demographics in the context of digital space.
Figure 1: Indian Demographics
Source: Indian Census Report, 2011; BI Intelligence, 2013
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Factors like rapidly growing internet connections, usage of smartphones, consumption in tier 2 &
tier 3 cities; young population in India which is around 65%; cultural diversity of Indiaetc. will
offer new opportunities and challenges to Indian businesses and digital marketers.
1.2 Internet Demographics:
Indian internet users are growing very rapidly at a CAGR (Compound Annual Growth Rate) of
44% and the number of users will increase from 205 million in the end of 2013 to 330 370 in
2015 (IAMAI, 2013). Factors like downward trends in the costs of internet access, increasing
market penetration of affordable smartphones, boom of social media, rapid growth of online
shopping, access to regional content relevant for users from smaller cities, wide use of
entertainment sites and video and innovation in the service provided by mobile operators is
contributing to the explosion of internet in India.
Figure: Indian Internet Demographics
Source: IAMAI, 2013; comScore, 2013
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Figure: Indian Internet Demographics
Source: IAMAI, 2013; Nielsen, 2013
Considering only the number of internet users wont help businesses to understand real internet
trends in India. Access to the internet is different from usage. Connectivity enables people to use
the internet if they want to and records if they access internet at least once in a month. The US
and China on the other hand show a market depth of usage that is still missing in India. While
rapid increase of internet users is exciting the businesses for future opportunities, they have to for
some time to fully utilize the rapid evolution of internet in India.
One of the key factors that contributed to the growth of Internet in India is the rapidly changing
online behaviour of Indian internet users. The Internets role in communication, social
networking, and informing and influencing Indias consumers in categories such as apparel,
books, financial services and travel can easily be compared to those in developed nations
(McKinsey, 2012). Some top factors that have helped in Indias growing internet penetration are
as follows:
1.2.1 Boom of social media:
Number of social media users in India at the end of 2013 are around 91 million and growing at a
rate of 28% (IAMAI, 2013; IMRB, 2013). LinkedIn emerged as the number two most popular
social media site while Pinterest and Tumblr are the fastest growing networks. Social networking
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often serves to be among the first internet uses of Internet in India, besides the usual reasons like
Email, music and gaming.
1.2.2 Changing face of mobility unique to only India:
Increasing market penetration of affordable smartphones, improved feature phones made
available in India, reduced tariffs of 3G and 2G connections, boom of social media, access to
regional content relevant for users from smaller cities, wide use of entertainment sites and video
and innovation in the service provided by mobile operators is transforming the media
consumption in India. Mobile medium is the best way to reach rural areas without access to
newspapers or electricity.
Figure: Mobile Internet Demographics

Source: IAMAI, 2013; Nielsen, 2013; Avendus, 2013
The increasing usage of internet from phones has opened up new avenues for publishers and
content providers. After social networking, information and entertainment websites are driving
mobile data consumption
1.2.3 Rapid growth of online shopping:
About 60 percent of internet users in India visit online shopping sites and time spent on shopping
sites still has huge growth potential. Local e-retailers like Jabon, Myntra and Flipkart among
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others are doing very well in this segment. E-commerce sites such as olx.com, Amazon.in have
targeted the Indian population with an aggressive marketing and advertising strategy to buy and
sell goods online. A wide variety of items ranging from computer and electronics sites, and
comparison shopping are available on these sites. Another reason for the growth of online
shopping is that three-quarters of Indias online population is under 35. Among women, 35-44
are the heaviest users while males in the segment account for 25-34 year Olds (McKinsey, 2012;
CXO Today, 2013).
1.2.4 Wide use of entertainment sites and video:
About 74 percent of internet users in India visit an entertainment site, with 31.5 percent viewers
watching videos on Google sites. The online video audience in India grew at 27 percent in the
past year, YouTube continues to be the top video property with more than 55 percent share.
International publishers including Facebook, Yahoo and Dailymotion get a majority of the 54
million who watched videos. Local content is distributed mainly through the YouTube platform
dominated by Bollywood. T-Series, Sony and UMG are the top three YouTube Partners.
1.3 How consumers and businesses interacting with each other?
The way consuemrs and businesses interacting with each other changing rapidly as the
traditional single-channel retailing is moving towards omni-channel retailing. It broadly includes
e-commerce, mobile commerce, social commerce and selling through web-kiosks.
Successful retailing requires incorporating all aspects of omni channel retailing successfully to
integrate the experience for the customer and the simplicity of doing business for the retail store.
Omni channel retailing empowers the customer to search for product/services information and
select convenient channels to buy and pay for products/services. This complex shopping journey
of consumer across channels is creating difficulty for marketers to track the customer actions.




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Figure: Omni Channel Retailing illustrative example

Source: i95dev, 2012
Ever changing retail and communication channels resulted in increasing new customer
Touchpoints and consumer engagement becoming more complex at different marketing, sales,
and customer service activities. Businesses using holistic customer engagement approach to
solve this issue by effectively using data, analytics, integrated media, mobile, and CRM.
(Exchange4media, 2014). This approach involves creating customer profile by collecting
customer data across channels and integrated marketing & CRM activities as a single approach
to consumer engagement which also delivers optimal customer service.




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Figure: Customer engagement channels

Source: Zdnet, 2013
New digital channels are changing faster than many companies can integrate them into their
customer experience. New social networks, mobile devices, app stores, online touchpoints like
fan sites, customer communities, Facebook pages, Twitter accounts, etc. seem to emerge on a
weekly basis. Adding to this, customers are more ready to interact than ever before, further
creating challenges of scale.
1.3.1 Emerging customer engagement trends:
1.3.1.1 Social CRM & Social-commerce:
Social is becoming more of online reputation management
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Businesses are using social media channels not only as a platforms to engage customers, build
the brands and launch the products but, they are using these channels to provide customer service
and sell their products and service. Also, customers are no more consider social channels just a
medium for networking and entertainment. They are open towards using social media channels
for making purchases and availing utility services. Social-commerce in India is booming and it
will grow around a CAGR of 37.59 during the perior 2012 2016 (Research and Markets, 2013).
Companies like Groupon, SeellMojo and LimeRoad are few examples of social-commerce
companies in India where LimeRoad is the first social-commerce website in India lauched in
2012.
As an innovative initiative, Vodafone merged the mobile and social channels to allow its
customers to use Twitter for a range of customer service enquiries. This Twitter self-care service
allows the customers to use Twitter hashtags for the most common customer service enquiries.
The shift in the consumer behaviour has made it essential for companies to take the next step into
digitally led customer service in order to make it easier for customers to interact with a business.
1.3.1.2 Influencer engagement:
Influencer engagement is a form of marketing that focuses on key individuals rather than target
customers. Influencer engagement can be done in the following ways.
Engagement to influencers, to increase awareness of a product within the influencer
community
Engagement through influencers, using influencers to increase market awareness of the
product among target markets
Engagement with influencers, turning influencers into advocates of the firm
Platforms like Instagram, YouTube, flickr, Pinterest, twitter, Wikipedia, tumblr, LinkedIn, Ning,
Quora...etc. are the widely used influencers (SteDavies, 2013)
1.3.1.3 CRM self-service web/mobile apps:
Self-service web/mobile apps provide services like access to online knowledge base, log requests
and follow-up on them, 24X7 customer service, view transactions report and maintain own
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profile for future reference. Businesses are introducing self-service apps to handle the difficulty
caused by increased customer base, unaffordable customer-servicing costs and high cost human
dependence. Businesses serving B2B customers, like Microsoft, Accenture, SAPetc. have
been using self-service apps from a long time to provide best service to its customers. Now
Indian companies like Idea and HDFC took such initiatives. Idea Cellular now offers a voice
self-service option for people who call the contact center, using Cisco Unified Customer Voice
Portal (CVP). Using this service, callers can either touch telephone keys or speak commands to
request self-service information, such as minutes remaining on a prepaid plans or charges for
recent calls (Cisco, 2009). Similarly, HDFC Bank, for instance, a customer applying for a loan
only has to submit account credentials through a smartphone using the bank's customer-support
platform (Times of India, 2013).
1.3.1.4 Marketing through mobile apps:
Nearly 59% of internet users in India are mobile only internet users and mobile app usage is
growing very fast in India. Mobile app downloads are 102 billion in 2013, up from 64 billion in
2012. Total revenue in 2013 is around $26 billion, up from $18 billion in 2012. Free apps
account for 91 percent of total downloads in 2013 (Gartner, 2013).
Mobile applications have become an essential part of mobile marketing. Through apps,
businesses can deliver rich and contextual content to any customer who downloads the
experience and develop a more personal relationship with customer based on usage insights. The
marketers in India realized the potential of this growing medium and are adapting their
communication strategy accordingly. Many brands have already started to adopt their
communication strategy knowing the potential that the mobile as the medium offers. For
instance, Dominos Pizza launched a mobile application to order the pizza from mobile. The user
just needed to download the app on their mobile to see the latest offer / combo and order the
favorite pizza (India Digital Review, 2013).



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Figure: Most used customer engagement channels by Indian retailers

Source: Retailers Association of India, 2013; Octane, 2013
According to the survey conducted by Retailers Association of India and Octane in 2013, around
58% retailers (online and offline) interested in Sales & Special Offers as the preferred channel.
However, 60% of e-commerce only retailers preferred e-mail marketing as the most preferred
channel for customer engagement. Sales & Special Offers and Social Media channels came in
the 2
nd
and 3
rd
position with 20% and 10% of the retailers preferring them.







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Figure: Retailers preference of digital channels for marketing:

Source: Retailers Association of India, 2013; Octane, 2013

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Figure: Increase in the marketing investments across channels

Source: Retailers Association of India, 2013; Octane, 2013
2. Major players in search, social, and e-commerce in India:
2.1 Search:
Indian search engine market is dominated by Google with a market share of 97.5% (Forbes
India, 2014). India is the third biggest market for Google after U.S and China. India is the only
big country where Google is enjoying such a huge market share.
It is estimated to generate over $100 million (Rs. 600 crore) every day globally from search ads,
according to search marketing provider WordStream. Though Google Indias 2011-12 revenues
of Rs 1,162 crore is very small compared to the global revenue of around 300000 crore, its
revenue in India will increase drastically as the internet users in in India are growing at a CAGR
of 44% during the period 2012 - 2016 (Cisco, 2014).
Key search statistics in India:
67.5 million unique searchers
6.4 billion searches
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7.6 billion search result pages
1.6 billion search visits
Unique searches in India grew by 28%
2.2 Social:
India has social media penetration of around 7% and 12% of its population based on active users
and based on Global Web Index survey of internet users respectively (We Are Social, 2014).
Social networks contributes to the largest percentage of consumers time in India. Facebook
continues to be the number one social network with a 28% increase in traffic and a reach of 86%.
LinkedIn emerges as number two, while Pinterestand Tumblr are the fastest growing networks.
Figure: Social Media Users in India, 2013

Source: Ethinos, 2013





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Figure: Social media usage patterns

Source: ideateLABS, 2013
Social networking sites like Pinterest, Instagram, Tumblr, Google +, video sharing sites, and
other blogging sites will be the key drivers of social media growth in India.
Few interesting social media trends in India (comScore, 2013):
27% increase in the Indian online video audience over previous year
31.5 million users watched videos on YouTube
YouTube continues to be the top video property with more than 55% share
Local content is distributed mainly through the YouTube platform dominated by
Bollywood.
217 minutes are spent on facebook by an average user
28% increase in facebook visitor over previous year
Blogs are growing 48% YoY making them the fastest growing web category
30% of Facebook users in India are mobile only internet users

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Figure: Top 10 facebook pages in India

Source: Reputo, 2103
Figure: Top 10 twitter brands in India

Source: Reputo, 2013





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Figure: Top video properties in India

Source: comScore Video Matrix, 2103
According to various media reports, Indian businesses use social media much more than the
global average and other emerging economies. The use of social media by businesses to increase
awareness of their brands or products is shifting to building of communities of fans, customers
and prospects. Though most of the companies have no appropriate system to measure the
effectiveness of social media and to calculate ROI, they believe that social media will help them
to connect with the customer in real time. The following are the top reasons why Indian
companies are using social media (Ernst & Young, 2013):
95.7% of the surveyed social media-savvy organizations in India use the medium to build
communities and advocate usage while
76.1% use social media as a platform to highlight brand news.
Around 16% of organizations, which use social media for both the above reasons also use
it for customer service, lead generation, and research indicating high social maturity and
moving toward getting business meanings out of engagements.


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2.3 E-Commerce industry in India and major players:
Indian e-commerce has grown at a CAGR of 30% during the period 2009 to 2013, and is
expected to be $18 billion (around Rs 111600 crore) opportunity by 2015
Factors like rising internet population, over 300 million middle class population, increasing
mobile penetration and low levels of e-commerce activity contributed to the rapid growth of e-
commerce. With only 12% of Indians online, e-commerce contributes only 0.6% to Indias GDP.
The nature of Indian e-commerce is quite different from that of western and other emerging
countries. Travel has a share of 71% of Indian e-commerce, but e-tailing has grown the fastest, at
a 59% CAGR between 2009 and 2013, to reach 16% market share (Business Standar, 2014 and
Macquire Equities, 2014).
Flipkart, Myntra, Jabong, Snapdeal and Justdial are top five e-commerce websites that are
booming in India despite the economic deceleration.
2.3.1 Review of top e-commerce websites in India:
Flipkart
Flipkart is the most popular Indian e-commerce company. They are headquartered in Bangalore,
Karnataka. It was founded by Sachin Bansal and Binny Bansal in 2007. In its initial years,
Flipkart concentrated on online sales of books, but it later on expanded to electronic goods and a
diversity of other products. Flipkart offers multiple payment methods like credit card, debit card,
net banking, e-gift voucher, and the major of all Cash on Delivery. The cash-on-delivery model
adopted by Flipkart has proven to be of great significance since credit card and net banking
penetration is very low in India.
Snapdeal:
Snapdeal is one of the leading online shopping website, headquartered in New Delhi, India. The
company was started by Kunal Bahl, a Wharton graduate and Rohit Bansal an alumnus of IIT
Delhi in February 2010. Snapdeal was started as a daily deal platform then expanded to product
retailing in various categories like mobiles, electronics, fashion accessories, apparel, footwear,
kids, home and kitchen, sports, books; and services like restaurants, spas & entertainment
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amongst others. They are also offering free delivery on selected items. The payment scheme is
same as others they are also providing EMI for some items.
eBay:
Ebay India is the Indian version of the internationally accepted American multinational internet
consumer-to-consumer corporation. It was founded in 1995, and became a notable success story
of E-commerce; it is now a multi-billion dollar business with operations localized in over thirty
countries. Ebay India is headquartered in Hyderabad, Andhra Pradesh. It has expanded its
option from set time to Buy it Now. Ebay offers payment methods like credit card, debit
card and online bank transfer.
Jabong:
Jabong.com is an Indian fashion and lifestyle online store. It retails apparel, sneakers, gadgets,
beauty products, fragrances, house gadgets along with style and also life style products. Jabong
has made a huge progress in a very short time period. The site started operations in January
2012. It was co-founded by Arun Chandra Mohan, Praveen Sinha and Lakshmi Potluri. Their
headquarters is in Gurgaon, NCR. They offers try and select option on some of the clothings.
Payment options are cash on delivery, credit card, debit card and net banking.
Myntra:
Myntra.com is an Indian online shopping store of fashion and casual lifestyle products,
headquartered in Bangalore. Myntra was established by Mukesh Bansal, Ashutosh Lawania, and
Vineet Saxena in February 2007. All three are IIT alumni. This websites retails clothings,
accessories, footwear, lifestyles and inner wears for gents, ladies and kids. Available at attractive
prices, with some best deals and discounts, myntra.com gives cash on delivery facility and the
guarantee.
Amazon India:
amazon.in is the Indian version of international online retailer giant amazon.com. They are the
largest online retailer, having the biggest collection in earth. Their headquarters in India is
situated at Bangalore, Karnataka. They started their operations in India since 2012 February.
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Amazon launched with books and movies & TV and then expanded their offerings to include
kindle of E-readers, Tablets and e-books; computer accessories; mobiles & accessories; cameras
& photography and portable media players. They are offering payment in all standard formats.
They are also offering free home delivery for selected items as an introductory offer.
HomeShop18:
HomeShop18 is the online and on-air retail and distribution venture of Network 18 Group. It was
started in the 2008 headquartered in Noida, India. It was Indias first 24-hour Home Shopping
TV. HomeShop18.com was launched on 18 January 2011. Currently, HomeShop18.com
comprises 17 categories: Accessories, Baby, Books, Cameras and Camcorders, Clothing,
Computer, Electronics, Footwear, Gifts & Flowers, Health & Beauty, Home & Kitchen,
Household Appliances, Jewellery, Mobiles, Office & Stationery, Toys, Watches. Customers can
place their orders through the site and pay the amount through credit card, debit card and cash on
delivery scheme.
Infibeam:
Infibeam is headquartered at Ahmadabad, Gujarat. Infibeam was founded in 2007 by Vishal
Mehta, a Cornell and MIT Sloan alumni. It started as automobile portal, but later turned into an
online retailer. Now they are retailers in mobiles, books, clothes, gifts, shoes, tablets, laptops,
electronics etc. They are providing all standard payment options.
Yebhi:
Yebhi.com was established in the year 2009 and headquarted in Gurgaon, Haryana. Yebhi was
started as BigShoeBazaar.com has a registered user base of about 1.5 million people, of whom
about half a million have transacted on the site. Yebhi retailers in Home, Lifestyle, Fashion,
Mobiles and Electronics. They are providing all standard payment options and EMI on products.
Naaptol:
Naaptol was established in 2008. This is one of Indias largest shopping portal based on
comparison. Naaptol started its operation as product research and price comparison engine. Later
in 2009 it was expended as an online marketplace and started offering products to purchase
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online in categories like mobiles, tablets, cameras, home appliances and a variety of other
products. They are providing all standard payment options and EMI plan on products.
Just Dial:
Just dial started its journey as a phone service and expanded to online search engine. Lately the
company has started online food booking as well and along with this there are many more
projects lined up. Google, which is planning to expand its business in India, may tie up with the
largest directory and local search service provider Just Dial (Daily Bhaskar, 2013)
Figure: Review of top Indian e-commerce websites

Source: Alexa, 2014




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Figure: Traffic metrics of top 10 e-commerce websites in India

Source: Alexa, 2014
Indias top 28 e-commerce websites (IndiaRanker, 2013):
eBay.in
Flipkart.com
Jabong.com
HomeShop18.com
Tradus.in
Shopping.IndiaTimes.com
SnapDeal.com
Infibeam.com
Zovi.com
Myntra.com
Yebhi.com
Zoomin.com
Indiaplaza.in
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Buytheprice.com
FutureBazaar.com
Bookmyshow.com
Rediff Shopping
Yebhi.com
Dealsandyou.com
Dell.co.in
Fernsnpetals.com
IndianGiftsPortal.com
Snapfish.in
Picsquare.com
Yatra.com
IRCTC.co.in
Makemytrip.com
Expedia.co.in
3. Indian local internet trends:
Indian demographics are very unique compared to any of the countries in the world. This
uniqueness also applies to internet trends, mobile usage trends, social media trendsetc.
3.1 Urban vs Rural:
67% of internet users are from urban and 33% are from rural
Among 110 million mobile internet users, 85 million users are from urban India and the
rest 25 million from rural India.
Urban India will continue to account for a large percentage of the Mobile internet users
across the country and is expected to reach 126 million by March 2014 and touch 153
million users by June 2014. Similarly, mobile internet in rural India and will register an
impressive 50% growth to reach 32 million by June 2014.
1 million Indians access internet exclusively from mobile. Among these users, 77% are
from rural area.
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3.2 Local language content:
India has 24 scheduled languages including English and Hindi. Many of the affluent Indians are
not comfortable with English to use internet and most of the web content is created using English
language. According to the study by IAMAI and IMRB International, Indian international users
could increase by 24% if local language content is provided on the internet (IAMAI, 2014;
IMRB, 2014). About 43% of rural respondents and 13.5% of urban respondents who are non-
users of internet said that they will adopt internet if the content is provided in the local language.
It clearly shows that the language is the key driver for the growth of rural internet.
Figure: Usage and penetration patterns of local language content

Source: IAMAI, 2014
Figure: Local languages used online
Source: IAMAI, 2014
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Figure: Application usage among local language users

Source: IAMAI, 2014
Local language content penetration among active internet users is 42% and it is growing at a rate
of 15%. News and search are the main activities performed by local language users and
entertainment, social media and email will drive the usage of local language content by rural
users.
4. Opportunities for Indian digital marketers in 2014:
4.1 Internet demographics:
3rd largest Internet population in the world with less than 15 % Internet penetration.
2nd largest cell phone user base in the world
2nd largest user base for most social media platforms such as Facebook and LinkedIn.
Rapidly changing Indian internet trends like rapid growth of internet users, social media users,
mobile and smart phone usersetc. and sheer size of Indian internet market in the future will
provide exciting opportunities for marketers.
4.2 Rapid growth of e-commerce:
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Indian e-commerce has grown at a CAGR of 30% during the period 2009 to 2013, and is
expected to be $18 billion by 2015. There are hundreds of e-commerce companies that have been
growing at more than 100 % year on year (Webcertain, 2013). As digital marketing is a core
function of e-commerce and developers increasingly integrating digital marketing tools into e-
commerce software, e-commerce growth provides tremendous opportunities to digital marketers.
4.3 Mobile app marketing:
Mobile marketing will be The Next Big Thing. Nearly 59% of internet users in India are
mobile only internet users and mobile app usage is growing very fast in India. Mobile app
downloads are 102 billion in 2013, up from 64 billion in 2012. Total revenue in 2013 is around
$26 billion, up from $18 billion in 2012. Many companies started including mobile marketing
strategy into their core marketing strategy (Gartner, 2013). Especially in rural India where
mobile is the first window to access to internet for around 77% of active internet users, there is
no access to electricity for around 80, 000 villages and more than half of population is illiterate,
mobile marketing is very crucial to reach.
4.4 Increased use of smart phones:
"A smartphone user consumes six times more data than a feature phone user" according to
Anupam Vasudev, Chief Marketing Officer of Aircel. The number of smartphones shipped in
India has grown by over 200% in the last one year. 9.3 million smart phones were shipped in Q2,
2013, compared to just 3.5 million in Q2, 2012. The growth is driven by local vendors who
accounted for more than half of the total smartphone market in 2Q 13 (International Data
Corporation, 2013).
4.5 Digital Marketing Tools:
India is one of the largest IT offshore service provider in the world. There are thousands of mid-
sized software companies who are now providing offshore services in the digital marketing field.
All these companies require Digital Marketing tools and product suites to service their clients in
the western markets. Developing such tools requires help from digital marketers and it
necessitates demand for digital marketing consultants.

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4.6 Content creation:
India has 23 scheduled languages excluding English. Many of the affluent Indians are not
comfortable with English to use internet and most of the web content is created using English
language. According to the study by IAMAI and IMRB International, Indian international users
could increase by 24% if local language content is provided on the internet (IAMAI, 2014;
IMRB, 2014).
4.7 Explosion of video data:
The mobile data explosion will be primarily be propelled by video. New and affordable devices
have made mobile media more accessible and compelling to the mass market. Cisco's VNI
predicts that by 2017, 60 per cent of all mobile data will consist of video alone and it will create
huge demand for digital marketing on video properties (Cisco, 2014).
5. Challenges for digital marketers:
5.1 Managing Big Data is a Big Challenge:
Changes in the business environment like increased customer touch points with the rapid growth
of omni-channel retailing, increasing usage of devices like smartphones and tablets, rapidly
increasing internet users and high involvement customers on social media made businesses very
difficult to collect huge amounts of customer data across different communication, service and
distribution channels. Marketers feel underqualified to handle the challenges presented by the
rise of big data, with 70 per cent admitting they dont have the necessary skills, according to a
GfK and Guardian Media Network report (theguardian, 2013). Digital marketers are taking the
help of data scientists and using advanced analytical tools these days. All these add further cost
to the delivery of digital marketing services to the customers.
5.2 Decreasing Click Through Rates:
Click-through rates on display ads started out at around nine percent in 2000, they now hover
around 0.2 percent which effectively means 99.8 percent of banner ads go straight to the
trashcan. Digital marketers need to find innovative ways to gain the attention of customers and
alternative ways to reach the customers. Native advertising, such as a promoted Tweet or a
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sponsored story on Facebook allows brands to promote their content within the experience of the
site or other mediums, in a non-interruptive and integrated manner (Next15, 2013).
5.3 Managing price conscious customers:
India is a land of disparities; it is home to the richest people in the world, but also home to the
poorest of them. In a similar manner, there are thousands of SMBs (Small & Medium sized
Businesses) who are extremely price sensitive and probably not ready to invest in cutting edge
technologies. However, there are hundreds of large organizations that are willing to make
required investments as long as the technology or service provider can deliver return of
investment. Convincing price sensitive SMBs is a challenging task for digital marketers.
5.4 Educating the client:
It will be challenging to digital marketers to educate their clients about ever changing digital
channels and the technology associated with these channels, effectiveness of the channels and
ROI on digital marketing campaigns and finally convincing them.
5.5 Creating multiple-variants of ads:
In a country like India with diverse cultures, religions and languages, it is very difficult for
marketers to deliver the targeted communication as people use internet in the universal language
English and covers the educated middle and upper class. Most of the successful marketing
campaign in Indian are created considering the local cultures. For future digital marketers, the
challenge and success depends on understanding the diversity.
5.6 Integration of channels:
Unifying and integrating within digital and also with traditional channels will be a difficult task
for digital marketers as each of digital channels like SEO, SEM, display ads; email, mobile, and
social media marketing requires respective technical expertise and new channels may come into
existence with the advance of technology. The success of digital marketers lie in collaborating
with themselves (Happy marketer, 2012).

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5.7 Reputation management is even more challenging:
As customers widely using social networking sites to rate products/services and to give reviews,
it takes minutes for a bad word to spread. Take the example of Dell, a frustrated customer,
Blogger Jeff Jarvis started a series of blogs, popularly called the Dell-Hell and within days
many more agitated customers joined in, the sales dropped and Dell lost crucial points on few of
the industrys crucial customer satisfaction surveys. Thus developing high quality products and
delivering high quality service become even more crucial now as one wrong word can break
your business. Even more worrisome is the point that competitors may get into unethical
practices and malign business. This is more so in developing countries where the regulatory laws
are not strong (MBASkool, 2013).
5.8 Speed of evolution of digital marketing:
Another challenge of digital marketing is the pace at which it is evolving. Few years ago,
companies used to do make 5 year plans on their marketing strategies. It is not possible to wait
for 5 years for next strategy as what is hot one year is out-of-date the other. New digital
channels are accumulating faster than many companies can integrate them into their customer
experience. New social networks, mobile devices, app stores, online touchpoints like fan sites,
customer communities, Facebook pages, Twitter accounts, etc. seem to emerge on a weekly
basis. If that wasn't enough, customers are more ready to interact than ever before, further
creating challenges of scale.
5.9 Low entry barriers:
Low entry barriers in digital marketing and e-commerce businesses created fierce competition
among businesses based on digital marketing. Digital marketing businesses need to possess
unique skills and capabilities to gain the competitive edge.
5.10 Staying updated:
Digital space industry witnessed failure of once successful digital businesses like Digg,
Delicious, Friendster, MySpaceetc. Speed and innovation is very important to sustain in digital
businesses. In most of the digital channels, marketing happens In Real Time so digital
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marketers need to be updated on real time basis and should respond immediately to changing
industry dynamics (Clickz, 2012).
5.11 Metrics, analytics, and ROI:
Though medium and large size companies widely using digital marketing, most of these
businesses dont have clear understanding of different metrics and analytics used to measure the
effectiveness of the digital marketing campaigns and calculating ROI. According to the study
"Emerging Trends in Digital Marketing" by First Point Research and Consulting, 73 per cent are
still relying on number of visitors to their website to indicate success, rather than longer-term
customer lifecycle or satisfaction KPIs.
Alarmingly, more than one-third of respondents are either not measuring digital marketing ROI
at all, or are tracking ROI but remain unclear about how to use the analytics information. Nearly
50 per cent are also only discussing analytics around digital marketing activity during periodic
marketing meetings, and 16 per cent dont know how analytics are being discussed (CMO
Council, 2013).
5.12 Creating lasting impact:
In a digital environment where new digital channels are accumulating very rapidly, the huge
increase in traffic to the website evaporates once the media supporting the campaign is stopped.
Using digital marketing, businesses must think of building long-term relationships with
customers.
So the ever changing digital space is creating both opportunities and challenges to digital
marketers and digital marketers should keep updated with the changing industry dynamics to
sustain.




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6. Online sources for best digital news in India:
www.iamai.in
www.exchange4media.com
www.afaqs.
www.campaignindia.in
www. marketo.com
www.indiadigitalreview.com
www.lighthouseinsights.in
www.socialsamosa.com
www.socialsamosa.com
www.digitalstrategyconsulting.com
www.techcrunch.com
www.bestmediainfo.com
blog.adobe.com/digitaldialogue
www.cxotoday.com







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