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Exposed: Performance Marketing in India

Exposed: Performance Marketing in India

With an increase in online retail, the emergence of more performance-based businesses and a hunger to venture into international markets, we look at the fledgling performance marketing industry in India.

TopCashback launched its third website there in December, Savoo.in opened in March and now Tradedoubler is ‘quantifying the opportunity’ that India presents, but what is so appealing about the South Asian nation which has a population of more than 1.2 billion?

According to a jointly published 2013 report by the Internet and Mobile Association of India and IMRB International, the online advertising market, comprising search, display, mobile, social media, email and video advertising, grew by 29% year-on-year (YoY) - to  Indian rupee (INR) 2,260 crore. This is expected to reach 2,938 crore by March 2014.

The report found that the average online ad market has been growing at 40% YoY, since 2010-2011 (fiscal year), search and display ads are by far the dominant online ads and that spend on social media and video advertising shows a 71% YoY growth.

“Since the entire industry is becoming more performance and ROI driven, it becomes mandatory for businesses to measure the conversion rates and analyse the consumer behaviour better,” the report said.

PM in India is ‘Here to Stay’

Siddharth Puri, chief executive officer (CEO) at Tyroo Media; a Mumbai-headquartered CPA network that works with more than 5,000 publishers across the globe to deliver performance oriented digital advertising campaigns, said there has been a surge in demand for performance marketing.

“With the growing internet penetration, changes in consumer behaviour (around eight million Indian consumers shopped online in 2012), and the growth of digital businesses beyond just e-commerce, the opportunity for online advertising is immense,” Puri said.

When describing India’s performance marketing industry, Puri said it is ‘flourishing, growing at an increasingly high rate and is here to stay’. He said it is affiliate marketing that is the most utilised form of performance marketing in India.

“If we were to categorise, our affiliates would include coupon/deal sites, cashback/loyalty sites, application/toolbar sites and display networks,” he said.

“We are still considered in the early stages due to smaller percentage of performance marketing industry outside of SEO and PPC. However, with the increase in online retail we have witnessed a surge in demand for performance marketing and increased relevance. With the addition of newer verticals such as telecom and online insurance we expect to continue the inorganic growth story in this segment.”

E-commerce Audience is Growing

Puri said the high number of internet users and consumption of the digital medium in English are just a few reasons as to why a lot of publishers look to the Indian market.

“To add to this, e-commerce ready audience in India has grown by 40%, which still is only 20% of total internet population in India, and this is an attractive story for international publishers,” he added.

The CPA network, which was founded in 2007, works with a variety of affiliates to drive transactions, leads and acquisitions for its advertisers. It also has a presence in Singapore, the UAE, Saudi Arabia, Malaysia, Hong Kong, Philippines, Thailand and Indonesia.

Puri said the performance marketing industry in India is still at a nascent stage and has a long way to go, but he is ‘highly optimistic about its growth’.

“We believe that the performance marketing industry will continue to grow at 30% year-on-year,” Puri said.

“Internet is becoming a strong revenue channel for digital businesses driving a large proportion of their growth, sales and visibility and there is no other reliable medium than performance marketing to drive and sustain an online business.”

In terms of competition, he said there are not many performance marketing networks in India and the majority of networks focus on CPM and CPC. Puri said Tyroo’s global counterparts would include networks such as Commission Junction, Neverblue, Rakuten LinkShare and zanox.

Puri, who last year recruited IT experts from organisations such as Microsoft and IBM to work on its newly created technology, said he is thrilled with Tyroo’s growth and success in the Indian market and for the fiscal 2013-2014 year, mobile and technology will be the two key focus areas.

UK Businesses Head for India

Following TopCashback’s launch into India in December 2012, the company’s spokesman Natasha Rachel Smith, said business has been going as expected – gradually but surely.

“India has a growing economy and a very exciting internet market,” Smith said.

“We think it will take a good few years to propel, but it was the ideal time to create a brand for Indian consumers to know and trust.

“As cashback is a newish concept in India, consumers and partners are slowly starting to get to grips with its benefits.”

Smith said the UK-founded cashback site never expected it to take off in India ‘as explosively’ as the UK and American sites and as disposable incomes are not as high in India compared to the UK and US, purchase amounts are naturally a lot lower.

In a previous interview with PerformanceIN, Tradedoubler’s CEO Rob Wilson admitted he also thought there was a good opportunity in India, but said the business was still ‘quantifying that’.

Following a trip to the Adtech New Delhi event, in an attempt to build relationships and to get confirmation of the market potential, general manager of UK online shopping deals, discounts and voucher code site Savoo, Simon Bird, and his team, launched a Savoo website in India.

Bird said as everything is in English, this makes life easier for UK-based affiliates.

In terms of his views on the region, he said New Delhi acts as India’s affiliate hub, Tyroo, OMG and Vcommission appear to be the biggest networks and the country has about 40 coupon sites.

Challenges & Potential in India

He said payment-wise cash on delivery is still common practice and networks can take six to 12 months to pay affiliates – something Bird says needs to change.

He also stressed that consumer credit card usage is low – but this is on the rise, and that often on programmes budgets are limited which causes some campaigns to end after a couple of days in the month.

In terms of how performance marketing companies in the UK may view the Indian market, Bird said: “India is obviously a market with huge potential, but investing the time and effort to start a business there is a huge commitment. That can be challenging and off-putting and companies may want to look at other markets that are closer to home and easier to manage first.”

Bird said he feels India can learn from the UK’s professionalism and top merchant education within performance marketing. He said although India is ‘where the UK was eight years ago’, real growth is expected and there is ‘massive potential’ in India.

He said India’s e-commerce size - $12 billion in 2012, makes it a huge market to get involved with.

“Internet penetration – of 150 million users, plus the above stat shows that it’s a market that cannot be ignored,” Bird said.

'Booming' Coupon Scene Sparks Dutch Move

Jochem Vroom; Dutch entrepreneur and founder of Imbull, the company behind the global money saving voucher platform Flipit.com, also recently decided to venture outside of Europe to launch Flipit into India.

The site went live just a few weeks ago and has more than 1,000 working coupons, with many more to be added as the startup team work to secure more deals for the site.

“We launched in India a few weeks ago, simply because we noticed the fast rise of other couponing sites and after scouting the market we noticed a few important things for our business,” Vroom said.

“'Couponing is mainstream in India and almost every webshop has multiple working coupons online 24/7."

Vroom, who will be at next month’s a4uexpo speaking in sessions such as ‘Performance Marketing in the Netherlands’ and ‘Maximising the Publisher / Network Relationship’, said affiliate marketing in India is more advanced than in other Asian countries, meaning there are a lot of affiliate programmes to work with. “Also Amazon recently started their India affiliate programme – it’s things like these that made us focus on this booming market," Vroom added.

Is your performance marketing business in India and if so do you agree with these comments? Or are you looking to move your business into the Indian market? Comment below and let us know.

Did you see our Exposed: Performance Marketing in Latin America piece?

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Pippa Chambers

Pippa Chambers

Freelance News Journalist at PerformanceIN - working to source the latest and breaking news in performance marketing. 

From newspapers to national B2B magazines and technology reporting, I have covered a variety of genres. NCTJ/NCE qualified.

Please email me at pippa.chambers@performancein.com and follow me @PippaC1

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