Absolutely. Here's why it should be part of every company's marketing strategy and complement all other marketing activity.
All you digital marketers out there with a brief to increase online sales in India -- are you conducting PPC search? How is it going in terms of driving online sales? Not too well? You're not alone. The simple fact is that India is severely lagging behind the rest of the world in terms of consumer uptake and usage of search.
Indians are just not using search
Although India makes up 15 percent of the world's population, it represents just 2 percent of the world's internet searches. Google owns the majority of the search market with 81 percent. Yahoo! follows second with 9.4 percent, and local player rediff.com owns 1.5 percent.
According to a study released by comScore in August 2008, in India there were 53 searches per searcher during the month of June 2008, which was way below the worldwide average of 93. India also had considerably less search visits per searcher (14.7 versus a 23.6 global average) and searches per search visit (3.6 versus 3.9).
There is just over 5 percent internet penetration in India at present -- one of the lowest in the world -- but this is growing as the country expands the necessary infrastructure and endeavours to get the population online. The government has set itself the goal of 20 million broadband users by 2010. Whether the government can achieve this remains to be seen -- the current number of broadband users is just under 3 million.
So, what does the consumer's lack of use of search mean for the digital marketer with objectives to push online sales in India? Is PPC search the right approach?
"Search online, buy offline" mentality
In India there remains a "search online, buy offline" mentality -- even within those consumers who do use search.
For digital marketers selling high-value products or products that are often purchased offline through intermediaries, it remains a struggle to compete against the local market mindset and change consumer purchase behaviour. It will probably continue to be like this until the appropriate internet infrastructure is in place, consumer trust in the security of online purchases -- especially products of high value -- grows, and until more brands make PPC search part of their strategy.
In today's world, every penny spent on marketing activity needs to deliver a good return-on-investment (ROI). Most marketing directors will simply compare online and offline marketing channels like-for-like and use ROI as the reason to allow or deny marketing activity, without delving deeper into each channel and what it can actually achieve for their brand.
With the continued "search online, buy offline" purchase behaviour in the market, it is justifying a good ROI that remains one of the largest blockers for digital marketers wanting to start PPC search activity in India, with the eternal dilemma of how to tie a purchase offline back to spend online. However, achieving online sales via PPC search and ensuring a good ROI are only part of the picture.
PPC search as a brand awareness tool
Right now, it is fair to say that it is difficult for some brands to get good results in terms of sales from PPC search in India when compared to other marketing channels. You may find that your click-through-rates (CTR) are very high, but that your conversions are low. Conversely, you may actually find that your ROI is high -- especially if your competitors are not using PPC search yet and you have the channel covered through limited spend.
Many brands are still not using PPC search in India because of the reasons given above -- lack of consumer usage, lack of trust in purchasing high-value products online, and the inability to justify the activity internally. However, these brands are missing out on a golden opportunity.
As well as the obvious effect of driving sales online, the effect PPC search has on building awareness of your brand within the minds of consumers, and ensuring that they remember your brand name and products when buying in the future, is invaluable. If a consumer is searching for a product and sees your brand name all the time, they are more likely to remember you when they do eventually make a purchase -- whether online or offline.
More and more Indian consumers are starting to purchase products online. These purchases include books, electronic items, DVDs, hotel bookings, and airline tickets, amongst others. Consumer trust in online purchases is growing in line with the growth in internet access and usage, albeit slowly.
Is PPC search the right approach in India? Absolutely. PPC search in India should be part of every company's marketing strategy and complement all other marketing activity -- not necessarily solely to produce a sale, but as a valuable brand awareness mechanism which will keep your brand top-of-mind at the important time of purchase.
Huw Waters is digital marketing manager for the Middle East and Asia Pacific at British Airways.