M. R. Krishnan, Director,Sales & Business Development, Sulekha.com

What began as an effort to bring the global Indian community under one umbrella, today is one of the most successful portals in India. Sulekha.com began as a creative site where most of the content, whether it were short stories, poetry or reviews, were generated by its users. Christened “expressions” and “interactions”, sulekha.com succeeded in attracting a huge chunk of the NRI sector who were searching for a global Indian platform to express their thoughts and literary skills.

Tapping this strong loyalty base, Sulekha came up with an innovative business plan that turned the portal from a simple creative outlet to a revenue generating operation. Its mantra was simple – online classifieds. The site became the largest source of online classifieds for Indians across the world and the largest online ticketing service in North America. In 2004, the portal’s annualised sales margin was $ 4 million and it had grown by 250 per cent since 2003.

Another definite index of sulekha.com’s success is its own advertising budget. In the last financial year, Sulekha spent Rs 2 crore in advertising. Most of it went into the promotion of Sulekha Classifieds with 80 per cent of the spend being online. Television commercials were also run across Zee and Sony channels in the US.

In conversation with Priyadarshini Nandy of exchange4media, M.S. Krishnan, Director, Sales and Business Development, shares his views on online advertising among the small to medium business communities. Excerpts:

Q. What are the benefits of advertising online compared to advertising in print?

The benefits are many. First, the Internet is an interactive medium wherein you can respond to an advertisement instantaneously. Print on the other hand is a passive medium. Second, the Internet as a medium does not have any boundaries. One single ad can reach out to the global Internet population. At the same time spillover is very low and allows a high level of targeting based on age, ethnicity, etc. It is also very cost-effective. As mentioned earlier, the cost to reach a thousand people is far lower through the Internet as against print. The shelf life of an ad is also very high on the Internet.

Q. What is the percentage of small to medium businesses advertising on your portal?

About 20 per cent of advertising in Sulekha is from SMBs, while the rest is from corporates. SMB advertising is equally split between USA and India-based SMBs.

Q. Where does online advertising in India stand vis-à-vis the global market?

According to Forrester, the online ad market is currently around $12-15 billion and is expected to grow to $ 25+ billion by 2010. Indian online advertising is currently a $ 20-22 million market and is expected to grow by more than 50 per cent this financial year.

Q. What kind of a future do you predict for online classifieds?

Online Classifieds in India has a user base of less than 1 million per month; however, growth is big and global trends of online classifieds companies being the cynosure of attention is very much in the news. eBay has acquired four online classified companies for a total price of $ 600 million in 2004, including a 25 per cent stake in craigslist.org. Usage of online/broadband by 2007 would drive tremendous growth in online classifieds.

Q. What kind of advantages do you think online advertising brings to small and medium scale businesses?

Online advertising is definitely a cost-effective way of reaching the global audience when you want responses to your ads. Also, very few websites offer targeted NRI reach or Indian online user reach for SMEs (small & medium enterprises). One of the biggest advantages SMBs (small & medium businesses) find over Internet Classifieds compared to print is their ability to change ad title, ad content, offers in the ad, etc. Most of it happens on a self-serve mode, therefore, allowing them to have more control on the ads - unlike print ads where artwork, graphic designing, etc., take precedence. This ability to change ads, have control on their advertising spends, is a big advantage for SMBs whose budgets are typically limited.

Q. Why do you think advertisers should use online media?

Internet is a highly interactive and response driven medium. Online advertising has gained popularity over a lot of other traditional media in the past ten years due to the vast global reach that it has and the powerful targeting that can be done to reach out to the desired audience.

In comparison with other media vehicles, spending on the Internet is highly cost-effective with higher return on investment (ROI). The Internet is also a more interactive medium than print which is more passive while TV is only demonstrative. In India, usage of the Internet as an advertising tool is picking up, be it for an FMCG advertiser or a bank.

Q. What kind of advertisers prefer online advertising?

There are advertisers from all segments and markets -- anybody and everybody who has a product to promote and sell. Some of the top segments that come to mind are Financial, Travel & Tourism, Entertainment, IT, FMCG, Consumer Durables, Telecom, etc.

Q. How cost-effective is online advertising?

As compared to other media such as television, print and radio, online advertising is cost-effective as the cost (to reach) per thousand people (CPT) is very low. An advertiser who buys a 10-second TV spot or a 100 column centimetre (CC) advertisement in print can use the same money on the Internet for more than 15 to 30 days and create a much higher noise level and recall value.

Q. What is the size of Internet advertising in the country? Do you think this medium is still very nascent in India?

It has been estimated that the online spend for fiscal 2004-2005 is around Rs 100–120 crore. It is expected to exceed Rs 150 crore in the coming year. It is one of the fastest growing mediums in India today. We expect the reach of Internet to quadruple in the coming years, with more broadband connections happening at offices, SOHO & homes.

Q. What do you think is needed to get general market advertisers online?

If you are referring to FMCGs and consumer durables, I feel most of them need to be educated on the ‘power of the Internet’ as a medium to reach out to their audience. It is because of their ignorance about the medium that their Internet spends are low. I feel the frontline advertising agencies of these corporate houses should take Internet seriously and educate them. Things are improving and we are confident that they will start looking more seriously at the Internet as a medium for reaching their audience.

Q. From direct experience, what kind of results have advertisers on your portal received? What percentage of clicks do you think translate from queries to transactions?

Every client has his own expectations/ROI. Sulekha is a publisher that allows advertisers to reach out to a highly interactive global audience and help them meet their expectations. We give the best service in the industry and have been successfully advertising for over 500 clients with 85-90 per cent retention ratio. The average CTR is between 0.5-0.75 per cent. This varies from campaign to campaign due to various factors.

Q. How is Sulekha different from any other online media vendor?

Unlike portals where content is aggregated, Sulekha is a community driven site with 90 per cent of the content being contributed by its members. ‘Expression’ and ‘Interaction’ are the two key anchors that drive Sulekha’s sections. We provide a platform for the people to express themselves and allow them to discuss, form networks and groups.

Sulekha is also the world’s biggest online Classifieds provider for Indians around the world and we are also the No.1 online ticketer for all movies and events across North America, and will soon expand its bay in India.

Q. Would you say online classifieds generate better results than online ads like banners, posters, etc.?

Banners, e-mailer shots, etc., are ideal for brand building, which is essential for every corporate along with generating a lot of leads, for instance, ICICI Bank or Citibank wanting leads from every possible NRI in USA or Canada. Classifieds serve a narrower purpose of putting in touch a real estate client with the over 20,000 NRIs who might be interested in investing in Chennai or Hyderabad at a given point in time. The audience base would be smaller -- but more targeted. Hence the spend is lower, and so is the reach but the ROI might be comparable to that of corporate banner advertising. Comparisons of budgets and reach is one way of looking at online classifieds. The other is ROI for the small business advertiser who cannot afford big banners but wants responses in a similar way for his money spend per month. Online Classifieds also serve a key need of individuals to advertise for free. Sulekha gets more than 20,000 ads each month -- largely from individuals who use the site for free by posting free ads. Responses are also free of cost and this builds a community of transactions. In the process, users of the free ads might also respond to SMB ads in the same category that they are looking.