Vying for Likes

Urvesh Goel appears thrifty on professional networking site LinkedIn where he talks about how his company, Syberplace, is different from other online electronic stores. "The key differentiation is that we do not give away anything for free," he writes. His thriftiness is apparent in the way he promotes his company - by watching every return on investment (ROI). "About 22-30 per cent of our advertising spending is on Google and about 1-5 per cent on Facebook," he says. "Facebook is on and off."

Why is that? Goel's loyalties towards Google came from a gradual realisation. Social media giant Facebook is great for building a brand, he figured out. But, unlike Google, it falters when it comes to sales or ROI. On the other hand, Google helps businesses capitalise on existing demand - likely, you search for a product or service when you need it. "For a company like ours, which doesn't have a huge branding-communication budget, it is a challenge to spend a lot of money on social media because it gives us no direct ROI," Goel explains. "I have been trying to use Facebook since 2008 with mixed results. I have never seen much of conversion, but I have seen a lot of visibility coming through," he adds.

Same is the experience of other advertisers Business Today spoke to. Self-driven car rental start-up Revv, for instance, advertises both on Google and Facebook. "Google addresses people who are in the market, people who are looking for self-drive car rental. Facebook generally makes people aware. So the awareness quotient of Facebook is far higher while the conversion quotient is better on Google," says the founder of Revv, Anupam Agarwal. The company advertises on Facebook 8-10 times a month; on Google, it advertises every day. "We do have a bias towards Google," he admits.

How successful are social media companies in terms of monetisation? The simple answer is that social media advertising in India has a long trek to cover. Facebook doesn't disclose its country-wise numbers, but according to an estimate by Neil Shah, Research Director at Counterpoint Research, the company had revenues of $80 million in India in 2015. That's a dot compared to its global revenues of $18 billion in 2015. India revenues seem more insignificant when you consider that it is the company's second largest market with 69 million daily active users.

Similarly, data from the Registrar of Companies shows that Twitter made only Rs 13.26 crore ($2 million) in 2014/15 in India, while globally, it generated $2.2 billion in 2015. Twitter doesn't disclose its user numbers in India, but as per an eMarketer report, the micro-blogging site had 22.2 million users in India as of January 2015. "The notion of social media advertising is still at a nascent stage among marketers in India, compared to search or display-type advertising where Google is strong," says Shah, who pegs the digital ad spend in India at $1 billion in 2015 with Google's share at 65 per cent.

Facebook is working towards enhancing its offerings in India and other emerging economies. Analysts predict that the scales would tilt soon, given Facebook's introduction of live broadcasting and focus on smartphones. "Facebook and LinkedIn are giving Google a run for its money. There is a huge shift happening and Facebook is going to kill Google's YouTube. Within a year, you will see companies launching campaigns on just Facebook," Anshul Sushil, CEO and Co-founder of advertising firm Boring Brands, says.

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