Reliance Jio’s disruptive offer of free voice calls forever and data at just 5 paise per MB is expected to open up the digital marketing space in the country in a big way, a top expert has said.
According to Chairman and Chief Executive Officer of Lycos Internet Limited, Suresh Reddy, the digital marketing in India currently accounts for a small pie of the global market pegged at $200 billion. Lycos is a pioneer in the digital marketing space, at $1 billion.
“With this shift, the Indian market can have a significant portion of the huge global market,” Reddy, whose firm is into internet advertisement since 1998 and has global presence, told IANS.
Indian advertisers largely spend their money on television and hoardings. “The next generation of users will be mostly on mobiles. Everyone is looking at smartphones and nobody has time to look at hoardings anymore. So you need to go where they are,” Reddy added.
Low Internet penetration and the reluctance by customers to spend extra money for data plans is behind India being at the bottom of digital marketing spends.
But with the latest development, said Reddy, there will be a shift towards more data-based work and, as a result, the market will grow.
The US currently accounts for 50 percent of the digital market, Europe 20 percent and South America, 16-17 per cent.
What has happened with Jio was on the cards for almost five years. “Every phone line has a voice channel and a data channel. It was just a matter of time the two converge and become one,” Reddy told IANS.
“Reliance has laid everything fresh. Their core is data and on top of it, they have given some voice as opposed to the other telecos like Airtel, Vodafone or Idea where voice was core and data was peripheral. This is a big shift,” he pointed out.
How will Reliance make money by giving voice for free and charging only a little for data?
“Exactly same question was propped up when internet first came in the 1998-2000 period. So far, they have been charging user per call per megabyte basis. Now you have common pricing,” Reddy informed.
There will be multiple streams of revenue. Since Jio is a convergence of a telephone company and internet service provider (ISP), it is going to make money through advertising and subscriber service.
This is only the beginning as other players will follow soon and it will ensure ‘reachability’ to the remotest places in the country.
Lycos, which is in internet advertising since 1998 and forayed into Internet of Things (IoT) last year, believes that for internet-based players, this is perfect direction in which the industry is going.
“Advertising is not a single person’s job. This is just a platform. It will not hurt anyone and the size of market will only grow. This will put the country on the global map if it works the way it should,” Reddy said.
Lycos earned a net profit of Rs 405 crore for the financial year 2015-16, reporting a growth of 18.5 per cent over Rs 342 crore earned in the previous fiscal year.
The global internet brand reported an annual revenue of Rs 2,256 crore during 2015-16, up from Rs 1,957 crore in the previous financial year.
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