Brand News

NetNeutrality: Should Advertisers Worry About A Non-Neutral Internet?

20/4/2015

Whether The Telecom Regulatory Authority of India (TRAI) has got anything to do with Amazon's new campaign 'Aur Dikhao' is hypothetical, but the impeccable timing of deciding to restrict Internet services to customers, if implemented, clearly will not leave us with the option 'Aur Dikhao' anymore.

But of course, Amazon does not have to bite the dust and can actually harp on their campaign more as there will be fewer options to compete with.

TRAI, due to the intense lobbying by the ISPs, is trying to frame regulatory measures that will block apps and websites extorting more money from consumers and businesses.

In this digital age it is ironical to have limitations on Internet access. People won't have access to as many websites as they wish for but possible only when pocket pinch stings harder. Small businesses will eventually find it difficult to make a cut through the giants unless their pay package is good enough for the ISPs. More and more money is all what an advertiser has to pay to reach out to its people. So everyone, from consumers to businessmen to advertisers, will get caught up amidst the chaos.

As April 24 closes in, by when TRAI wants opinion from people, we found out whether advertisers need to actually worry about the probable changes in net neutrality.

The Advertisers' Imbroglio
The change in net neutrality, for obvious reasons, is going to have major significances on advertisers. The effort and huge amount of money they already invest will all go in waste if all targeted consumers cannot access them.

Digital space is the growing advertising platform and restriction on this will lead to fewer people reaching for brands. Except a few, most of the brands will get hampered as they won't be able to advertise properly. Today we know about Chumbak, Urban Ladder, Pepper Fry and many more such brands, which were start ups that got popular through the internet. Would this have happened if net neutrality was limited?

KV Sridhar (Pops), Chief Creative Officer, SapientNitro India, opines, "Brands are going to suffer a lot. Today the performance of Flipkart in terms of speed is no different from that of a rising brand. In fact the smaller brands perform better as the traffic is less out there. Now if these websites get slow or do not open at all they will lose the business. The bigger brands that can spend supposedly Rs 15 crore on technology, will survive, while those who spend around Rs 50 lakh, will have to suffer. Besides, these smaller brands are using smart advertisements to bring in the people. But if people cannot reach out to that brand what benefits that brand will reap of advertising? The brands will die!"

The problems are going to manifold and lead to a mess as all the brands are now moving on the normal lane with equal facilities of Internet. Now what they plan to do is shift the big brands to the fast lane as they will pay high and move all the rest of the traffic to the slow lane.

"The consumers and businesses both are going to get hampered. Meanwhile the bigger brands will be happier as the Internet will be all theirs cutting down the competition," Pops adds.

Presenting a similar view, Rajiv Dingra, Founder and CEO, WATConsult, points out that if net neutrality is not secured, it may slow the growth of Internet. "The cost of using several services may go up and hence clearly the advertising on services won't be there as users will be selective on what they use due to cost," Dingra adds.

However, on the other hand, Sanjay Mehta, Joint CEO, Social Wavelength, is of the opinion that absence of net neutrality won't be of any harm to the advertisers. "Advertisers on digital media usually pay on basis of impressions delivered, and of course, to the relevant audience. Irrespective of net neutrality or otherwise, irrespective of some sites being slower to reach compared to others, as long as the advertiser gets impressions for his ads, while targeting the right audience, he should get his money's worth," he adds.

Mehta cautions that the only risk could be, if due to the impact of these changes, the advertiser does not even get adequate impressions for his advertising." That would be a very unlikely occurrence, but only in such cases, would the advertiser see some downside due to the effects around net neutrality. The one other impact that could happen is that the cost of reaching a target prospect may go up."

Exactly that is the issue. Since the Internet will no more be free to access, advertisers will have to shell out more money to get people see/take part in the ad/campaign and thus pass the cost to the end consumer.

Mehta adds, "The advertiser essentially rides on the publisher of the platform. If now, the publisher needs to shell out some more money to get their platforms visible to large audiences, that cost increase may get passed on to the advertisers, who may need to spend little more for their advertising. It is akin to say, a print advertising case. Where maybe cost of newsprint goes up, and to offset that increase, the print publication passes on the additional cost burden to the advertisers!"

Pops however feels that the advertiser will be at a loss in case the internet doesn't remain neutral. "The advertisers cannot tie up with one ISP because they will need to connect as many people as possible. Hence the problem is they will have to tie up with each one of them. But from where all these extra funds come? They will need lots and lots of funding which in other way will kill the smaller brands as they won't get much funding. And at this point of time it is not possible to get back to print advertising completely. So naturally things are going to become difficult."

A Dip In Digital Spends?
Digital spends in India is currently at 8% to 10% of the overall advertising budget spend by brands around a year. When the entire industry is hopeful of a surge in digital spends this year, will a non-neutral internet become the biggest roadblock?

Mehta doesn't see digital marketing dollars coming down. "The telcos are not going to do anything that will drive away the user base. All the subtle changes that they were / are attempting to do, may not even be easily known or seen by the consumers. If not for this huge public outrage, the telcos would have gone ahead with their plans, and most of us would have not even realised the change," he explains.

The difference, as per Mehta, would not be easily perceived. Those who are currently paying for data would continue to pay, and get access to the sites they need. And of those who don't pay for data, either they are satisfied with the limited access to the free sites / apps that the telco gives, or they also pay and become data subscribers.

"In either case, consumption of digital content is not going down. If anything, it is increasing. Time spend on digital is only increasing. And those remain the compelling reasons for advertisers to continue to advertise on digital. So no, I don't see any reduction in the growth rates of digital advertising spends!" he adds.

Earlier Facebook enabled a fair extent of organic reach and hence brands used to build a good fan base and reach their fans, for free. Now organic reach is nearly zero and brands need to pay to reach their target audience. Well, advertisers accepted that reality and are paying! Similarly, the consumer of content on the Internet is not going away anywhere. Publishers will also accept that reality if they have to, and pay for the access!

The scenario now, as it appears, is full of conditions and complications with money being the only answer to every question. How much that stands fair for the content creators as on this day they engage an impressive number of Internet explorers.

"Internet is democracy. Content should be available to any and every person. It's the people's right. If net neutrality does not exist then good content will get hampered. AIB, ScoopWhoop, StoryPick - all these content creators will now need huge funding to cope up with the changes. Content will become an issue, social media will become an issue. Later there will be problems in optimization as well. The Internet will now be ruled by paid media, it will become a monopoly," opines Pops.

Evidently the content creators will have a tough time, and thus will native advertising too. Mehta also agrees, "Content marketers may also need to start paying to reach their audience. That is something that is a requirement today also, but the cost may go up to a certain extent, if these measures are implemented."

#SaveTheInternet
In this digital age as competition increases, networks and government are likely to impose various limitations to control and generate the traffic. But whose advantage is it after all?

As Pops puts it, and we also hope that it is a temporary thing and it will backfire. "People are the ones who save the brands and not only money can do it. Hence hopefully things will settle for the betterment of people, brands and telecoms."

Amen, we say!

GO BACK