Will online inventory pricing grow over the coming year? – Alootechie Interview

My interview with Alootechie was published on December 14, 2010.

B G Mahesh is CEO of Greynium Information Technologies, which owns Indian languages portal OneIndia.in and online classifieds portal Click.in. Rajesh Jain’s NetCore Solutions took a majority in Greynium in May 2010. In an exclusive interview with AlooTechie, B G Mahesh shared his thoughts on the online publishing industry in India and the road ahead for Greynium after the acquisition.

How do you see online publishing evolving in India?

Over the past few years it has grown well and it will grow at a faster pace in the coming years. With the internet penetration increasing publishers will find it enticing to invest into content as it will have a bigger consuming user base.

How do you see traditional publishers take the route of convergence in India?

Few leading media houses already have taken this route. You see leading print media houses in the digital medium already but I think the seriousness of focus on digital media may increase only when they see bigger revenue potential.

It is believed that in India monetization of content is more of a reality in offline. What is your opinion on traditional media houses taking the route of convergence?

For traditional media houses, their offline revenues are huge, rather very huge. So, they will find online revenues minuscule however big it is. Few media houses have already started the journey of convergence and they are doing a good job of it.

I read just a few days ago that The New York Times saw a decline of 5 per cent in offline revenue and 14 per cent surge in digital revenues. Unless the Indian print media companies see such a phenomenon they will continue to bet on the print media itself.

Has social media and user generated content changed the dynamics of the online publishing industry?

UGC is the current buzzword of the online industry. However, UGC works well for evolved online markets, but in India you get a lot of hate content, personal attacks etc. We see that in our comments section which we need to clean up regularly.

Paid UGC is one model that should be followed in India as well. From what I hear, many sites like HuffingtonPost.com, AssociatedContent.com (now acquired by Yahoo) and MeriNews.com follow this model.

In fact on OneIndia.in, we proof read all the UGC articles we get to maintain the quality. We don’t tinker around the author’s opinion or language. I am talking about the grammatical corrections.

Social media extends the reach of the content of publishers. We are able to target like-minded people on Facebook and Twitter. But the fundamental will always remain the same – you got to publish good content. If you think you (content publishers) can survive just because of Twitter and Facebook, I think you got it wrong. What will you push on Twitter and Facebook if you don’t have some real content? You can fool social media users once or twice, not repeatedly.

How important is rich media content from a publisher point of view. What are the current challenges faced in India for publishing rich media content?

Indian surfers are very up-to-date with what is happening in the US online space. They will easily accept things on Indian sites which are seen on US sites. For e.g., video consumption is increasing day by day in India. In India, rich media will take off if the broadband speed gets better; buffering is not a great experience.

Generating authentic rich media content is not that easy. A publisher with deep pockets can do a great job because he will be in a position to invest into good people and technology, without which I think you cannot generate good content – rich or even traditional content.

Traditional media houses from the TV medium are in a great position to offer rich media content on the web. We already see the traction in the number of videos being uploaded from these companies.

Pure play rich media content libraries like Rajshri.com have been seeing a lot of traction. Though the initial set of users are coming from outside of India, this situation will change in a year or two as our broadband speeds increase.

What, according to you, is the current stage or status of online advertising in India?

We are in the midst of a massive growth in the online advertising industry in India. In the last few quarters, we have seen many offline advertisers trying the online medium and continuing to advertise on the medium. However, for sustained growth, the dynamics of the industry has to change. The online publishers should not be penalised for the performance of the creatives of the advertiser.

Will we ever see a situation where an advertiser will pay a TV channel or Print publication only if the customer walks into the shop or fills a form and sends it by courier to the advertiser’s office? This is the current state of the online medium in India. The CPC and CPL models should be phased out. Internet should be treated on par with the TV and Print media.

The ad agencies have a big role to play in moving their clients out of the CPC and CPL models. The publishers and the ad networks should constantly highlight the advantages of the online medium to the agencies and the advertisers.

Good and bad. Good because it is better than before. Bad because we, online publishers, have accountability which other media don’t. For e.g., we have CPC and CPL models but why don’t the same advertisers tell the print or TV media, “We will pay only if the customer visits or buys something from our shop.”?

Agreed that the online reach is lesser than the Print and TV media, but the online advertising rates too are lower. Agencies should help online advertisers in convincing them to be a lot more aggressive online. After all, that will help the agencies too.

According to you, which are the key advertiser segments where spend has been increasing on online media?

The online ad spend has witnessed a growth of 76 per cent by advertisers from the Education vertical, 46 per cent by FMCG, 40 per cent by Auto and 27 per cent by online properties between 2008-09 and 2009-10. Verticals like BFSI have been one of the early adaptors of online advertising and their online ad spends have been growing steadily.

What are your thoughts on innovations which publishers can offer to clients for advertising their products in a better way?

Pop-ups and first generation shoshkeles (expanding ads) were amongst the first innovations users saw from advertisers. Innovations have come a long way. These days you see page takeover, synchronized banners, skinning, page tear etc from advertisers. These work very well in branding and have shown encouraging brand recall.

How do you see online inventory pricing growing over the coming year?

The rates have already been growing, thanks to Google AdSense. They have made life easy for many small and medium publishers.

We publishers need to continuously show the value-add to the advertisers. For e.g., OneIndia.in is one platform that can help the advertiser to reach ‘Tamil speaking’ people on the internet. Advertisers see language targeting valuable in print and TV, they are just warming up to the same idea online. Once that happens language publishers will see a lot more revenues, which, in my opinion, will be a lot cheaper than print and TV.

As the user base of internet grows in India and a publisher can demonstrate increased stickiness to his content, the pricing is bound to grow. All I can say is online publishers need to have a lot of patience and we will see the fruits of labour in coming years.

Following the acquisition of Greynium by NetCore, what are your priorities and plans for OneIndia.in?

Greynium has been strong in the web space, NetCore in the mobile space. We see a lot of synergy. We both have realistic plans; now, we need to execute them one by one. Our immediate priority is to deliver OneIndia’s language content by SMS. We have a good presence on NetCore’s MyToday (no longer in service). Scores of mobile users are interested in our content; the lack of font support on mobile handsets is a big hurdle which we are in the process of solving.

Recently, we soft launched our content on NewsHunt. Without any considerable promotion, we already see an increase in users on the NewsHunt platform for OneIndia.in.

How have Indian publishers used the mobile technologies to offer mobile services to their users? What are OneIndia.in’s plans around this?

Indian publishers have pretty good WAP and SMS presence. The mobile services are in a nascent stage, just like how internet was in India in 1999. But the mobile space will mature a lot faster than the web space did because it has a far bigger reach and possibly bigger monetization opportunities.

Our wap portal http://oneindia.mobi has been growing well over the last one year. Our language sections are yet to gain momentum because not many mobile handsets support Indian languages. The moment language font support becomes a reality in handsets sky is the limit for us.

On the SMS front we are a publisher on NetCore’s MyToday.com. On the monetization front, I don’t think anyone has fully cracked that model on WAP and SMS, they will one day. Before they do so, I am confident OneIndia’s presence in the mobile space will be very mature.

How do you see the revenues of Indian online publishers growing in the coming years? What role does regional content have in regards of growing the online publishing industry? What are OneIndia’s plans on this?

OneIndia.in has been in the regional content space for over a decade. We have been very patient and it is paying off now.

When we started, the traffic was predominantly from NRIs (as high as 93%). Thanks to the internet penetration in India and availability of broadband, about 60 per cent of our traffic is now coming from India and it has been growing organically.

Regional content is a niche; you must be very patient in this space. There is no overnight success. Monetization has improved in this space but it would have been at different levels if Google AdSense had supported Indian languages.

Online regional content is a reality simply because there is a demand for it. It would have been far bigger if search engines were completely language ready. Search engines are currently more for English language content; however, the day is not too far when they will handle Indian languages better. Once they do, more users will be aware of the existence of pure online regional publishers like OneIndia.in.

Print media companies are easily able to push their online property through their newspapers, we don’t have that luxury. That’s life and we have to take it as a challenge. I believe OneIndia.in has handled that challenge well.