Perhaps the most exciting feature of the Indian online advertising market is not so much the advertising itself but the impressive buzzwords that keep floating in. The latest mantra doing the rounds globally-Yahoo, msn and Google are said to be testing this new format-is behavioural advertising which is being touted as the next big thing since contextual advertising.

Also dubbed as behavioural targeting, this trend refers to an individual's surfing behaviour, and is a bit different from the more common targeting method of displaying ads matched to the specific content of an individual page or to all users. Says Rajneesh, Head of Digital Marketing (Revenue & Strategic Business), msn India: "With behavioural advertising, the per user yield goes up by two-to-three times. It enables marketers to deliver ads to consumers based on their online behaviour-what they recently bought, where they surfed, or what they searched for. Based on this information, ads can be tailored to drive users back to the advertiser's site to complete the desired registration, purchase, or other action."

Adds George Zacharias, Managing Director, Yahoo India: "Two things increase the effectiveness of advertising in the online medium. One, the right ad product should be served to the right person to be made relevant; and secondly it should be beyond just improved creative with the right context. Behavioural advertising is a method where you try to achieve both these effectively."

Recent international research studies reveal conversions are higher when people are targeted through behaviour rather than content because behaviour can determine person's actions. In fact, Microsoft in a recent announcement cited a research that states behavioural targeting increased click-rates by 75 per cent. Microsoft said it had collected data from over 260 million users of its Hotmail e-mail service in preparation for combining such information with individual search trends.

Behavioural advertising has taken off in a small way in western markets. Currently, it accounts for a relatively small percentage of online advertising. As of now, only 8 per cent of all online advertising is behaviourally targeted. A global study released by iMedia Communications and the Ponemon Institute said behavioural targeting was to increase by 65 per cent in 2006.

However, in India behaviour targeting is yet to take off. "Online advertising in India is just about picking up. It has changed from banner advertising to more creative rich media forms of advertising and has further potential to grow," says Sundaraman. Adds Rajneesh: "Behavioural targeting cannot be done in a portal scenario like e-mail portals and Messenger. Secondly, there has to be enough internet penetration. We at msn are constantly evaluating these new formats and opportunities." Sources indicate that msn in India is trying to test behavioural targeting on live.co.in (Windows' live search beta). While Yahoo has rolled out behaviour targeting across the world, in India Zacharias says that it will take time before it starts off in India as the media itself needs to grow.

According to a study by Internet and Mobile Association of India (IAMAI), in India internet penetration is less than 2 per cent of the total population and the online advertising market is only 0.5 per cent of the total ad spend. The good news, of course, is the potential that hides behind those numbers.

-Anusha Subramanian

Where Angels Love To Tread
Corporate honchos get together to sniff start-ups. Déjà vu?

WPP's Kapur: Hunting for start-ups

They call themselves Mumbai's Angels, inspired perhaps by private equity investor Pravin Gandhi's Band of Angels, which invests in start-up/early stage ventures. Set up by 25 honchos from the business world, Mumbai Angels claims it's one of a kind. "Ours is a forum where angel investors can learn about budding entrepreneurs and their business plans in Mumbai. All the members are executives, professionals or successful entrepreneurs who have the time, willingness and the resources to mentor the newer companies," says Shantanu Surpure, one of the angels who is a partner at the Mumbai-based Economic Laws Practice (ELP), which specialises in venture capital, private equity and cross-border transactions.

Mumbai Angels is the brainchild of Sasha Mirchandani, venture partner with BlueRun Ventures, and Prashant Choksey, CEO of the Choksey Group. The band also includes Ranjan Kapur, former Executive Chairman, O&M India, and now WPP Country Head. Mumbai Angels has invested roughly $0.5 million in mkhoj, a mobile vas company and another $100,000 in Delhi-based online DVD rental company Madhouse Media for its national rollout. Investments are in the $200,000-$500,000 range and the band expects to close at least 10 deals in 2007.

-Pallavi Srivastava

"We're Always Looking For Acquisitions"

Aegis' Lerwill: Exploring new avenues

Recently Robert E. Lerwill, CEO, The Aegis Group, a global marketing services giant, was on a whistle-stop India visit, when BT's Deepti Khanna Bose caught up with him to know more about the group's much-publicised split with Percept and plans for India in 2007. Excerpts:

What are you doing in India?

I'm here today because India is one of the fastest growing areas in the world; and there's a huge amount of willingness on our part to invest directly. Also, as we win global clients, we like to ensure that we can service them in India as well.

How is the Aegis Group doing in India (post your split with Percept)?

It's doing well. In the last few weeks, we've aligned ourselves to become independent and flexible in India. The JV that we had with Percept and various businesses related to it have been useful and both sides felt that a mutual split would be beneficial. We're able to go forward ourselves to develop businesses in a way that we think is best in line with Aegis' global strategy. We're well-placed to do that; we've had a few good wins in Carat in 2006 that compensate for any loss of business after the split with Percept, so we're looking forward to a good 2007. Aegis also has Synovate, which is our market-research arm, and has five offices in India with 300 people; it's #3 in the research marketplace. Synovate deals not only with global clients, but also a lot with strong local clients. We feel very confident about India.

What part of the global pie does Aegis India contribute to, and what can you share with us of your expansion plans in 2007?

It's not a huge proportion compared to mature markets like Germany, the UK, France, Spain, or even the us which we've built up over the last six years; but the direction that we're strategically in is one in which we want to build a higher ranking in both media and market research. Now there are a few ways in which one can increase rankings and revenues. The first one is through organic growth-that is, with Charles (Berley Jenarius, Group CEO, India) going out and getting more business, and the second is for The Aegis Group-in this case Carat-to be successful in more global pitches. And thirdly, there is the acquisitions route; and there we can increase our market share by buying companies who we want and that want to join us.

We're always looking for potential acquisitions; in 2005, we made around 30 acquisitions in the entire group. We didn't make too many in 2006, not because we can't afford to do it-we have a very strong balance sheet-but partly because in market research we were able to have completed our global footprint, so there are no areas theoretically that we're not in. We are building up areas of practice in automotive, healthcare and retail etc in market research; in media, we made a lot of acquisitions in digital-over 20 per cent of our media revenues are from digital. Worldwide 5 per cent of revenues come from digital media, in India it's 2 per cent, so there's a huge potential here as broadband penetration increases, as mobile becomes a more acceptable medium of interfacing with the internet. By growing in those areas either organically or by acquisition, you will see us as a larger force in India.