Dotcom Marketing in India

EVOLUTION OF PORTALS

In the early days of the Net revolution, there was a rush to get online. Most companies established their presence through corporate websites. Companies used the Net as a new low-cost channel, with unlimited reach. Corporate websites used the Net primarily to extend their reach and attract customers to their products.

Customers had more information and more choices than ever before. As websites grew in number, it became difficult for customers to search for sites of their choice. Search engines thus emerged and became key players directing millions of surfers to various sites.

Web commuters found a unique value addition as they could go and search for any product or service from any part of the world by just clicking the mouse. The phenomenal growth of search engines was accompanied by unprecedented choices opening up for the customer. This growth led to the transformation of search directories into portals. The competition was redefined.

Instead of competing on width offered by horizontal portals, players were forced to compete on depth. While reach was taken for granted, the richness of content, the way one presented one's products and provided information and strong community features like chat rooms, discussion groups emails etc. became the recipe for success.

This led to the emergence of vortals or "vertical" industry portals and "segment" portals. Vertical portals were sites devoted to a single industry or function: for example insurance content sites, personal financial services sites and sites that attracted consumers to buy health or auto insurance.

In each case, the revenue model was primarily based on advertising, with some transaction revenue from online sales (Refer Exhibit I for different business models). Segment portals were subsites of the horizontal portals; an example was Yahoo! Finance, a finance site of Yahoo!. Such portals offered focused searching capabilities to Internet users interested only in a single range of products.

THE DOTCOM MARKETING MANIA

By the late 1990s, there were hundreds of dotcoms in India each vying for the surfer. There was a difference between the ads of FMCGs and the dotcoms. While FMCGs were branded to �Come and check my site out first!'And the branding of dotcoms seemed to be difficult as everyone was trying to do the same.

Most of the dotcoms seemed to have the necessary technology and the financial muscle (Refer Table II for ad spends of major dotcoms). What seemed to be needed most was differentiation. To achieve this, the dotcom companies depended heavily on advertisements.

TABLE II
AD SPEND BY PORTALS IN 1999

Portal	Ad Spend in Rs million
Rediff	130.8
Indiatimes	107.1
Indiainfoline	48.4
Indiamarkets	44.4
Indiainfo	42.9

Source: Business Today, June 7, 2000.

The print media seemed to have made the most of the dotcom boom as huge amounts were pumped into advertising. According to a report, Rs 12 billion was spent on print media advertising during 1998-99. Shunu Sen, Director, ORGMARG, said, �Since the Internet is still nascent in India and e-commerce through conventional media.

Once they get the traffic, they will focus their advertising budget on the Net itself. But till then it will be boom time of the traditional media.� On the other hand, only companies with good financial stability were using the electronic media for advertising. Besides the cost, it worked only if a certain level of brand awareness already existed. Some dotcoms also opted for contests and other promotional campaigns.

Many analysts wondered if all this frenzy made sense. Some described the dotcom advertising as 'mediocre'. Others felt that most of it was �Hello! I am a dotcom� kind of advertising. Some of ad lines were: �Free E-Mail� (Zeenext): �India's most happening chat site� (123 India.com), �Its all about money, honey� (5paisa.com). Commented David Appasamy, General Manager, Satyam Online, �Some dot.com advertising has been focused and some less so.�