Google, Yahoo battle in India

11 May 2011

NEW DELHI: Competition is intensifying between Google and Yahoo in India, as the firms balance the need to develop the nation's web advertising market with boosting their own revenues.

The Indian online ad sector experienced growth of more than 25%, to 993 crore rupees ($222m; €155m; £136m), in 2010/11 on an annual basis, incorporating a 28% lift for display, attaining 534 crore rupees.

Moreover, the country's internet population on PCs, laptops and other such devices has reached 80m, plus an additional 30m surfing via mobile phones.

Shailesh Rao, managing director of Google's media business in Asia Pacific, suggested a sea change had occurred during last year's Indian Premier League cricket tournament, when YouTube secured 55m hits.

"There is a difference between knowing about an opportunity and actually seeing it happen," he told the Business Standard.

"In a span of 30 days, we received sponsorship from seven to eight companies across multiple verticals in India who never thought of investing seriously on display ad. That's when we realised the magnitude of interest."

YouTube now boasts 20m unique visitors in India, and Google's search engine has achieved an 80% penetration rate among the web-connected community.

In prompting marketers to show similar enthusiasm for the web, Google is rolling out a range of tools supporting nuanced communications models.

"We believe web is much more than just finding the audience and selling," said Rao.

"We are trying to help through data that helps advertisers and publishers find the audience based on gender, interest, demographic, behaviour etc."

Elsewhere, Yahoo, Google's main rival, is seeking to inform brands concerning the potential of digital channels, such as by holding "Fresh Fridays", or whole-day sessions for agencies and clients.

"We share with them some great case studies, trends etc., while encouraging them to leverage this medium to build their brands," said Arun Tadanki, managing director of Yahoo India.

Some of the campaigns referenced by Yahoo are efforts for Cadbury, Citibank, Dove, Pepsi, Samsung and Tata DoCoMo.

The company has also introduced approximately a dozen display formats, including full-screen advertising when users log in, which people can then spread on social media.

"You can show a consumer an ad that lets him play the trailer of a movie, post that link to Facebook; read reviews for that movie or even book a ticket for it: all from the ad itself," said Tadanki.

One area where Google has a clear advantage is regarding mobile, thanks to its Android operating system, expected to see demand rise as the cost of handsets comes down.

"Based on our interaction in the market, we will see in four-five years an Android-based smartphone with a price tag of just 5,000 rupees," said Rao.

Data sourced from Business Standard; additional content by Warc staff