Internet - The Next "Radio" ?

The figures augur well for the future of Social Media in India.

Students in journalism schools are still taught that radio is the ‘medium of the masses’ while new media, the most prominent representative of which is social media, are still the victim of ‘low Internet penetration’. But how true is this popularly held notion? And if it is, what is the scope really for social media marketing and other efforts that employ this medium in a developing country like India?

According to the report on ‘The Indian Telecom Services Performance Indicators’ for the period January - March 2011 published by the Telecom Regulatory Authority of India, there were 19.67 million Internet subscribers at the end of Mar-11 as compared to 18.69 million at the end of Dec-10, registering a growth of 5.29%. This is, however, not such an impressive figure as 19.67 still accounts for a mere 16% of India’s total population. Compare that to print and radio, which have a nearly 100% reach and social media certainly begins to look like a neophyte.

However it is safe to say that Internet penetration will only grow in several years to come. Consider the following figures:

Source: The Telecom Regulatory Authority of India

It is evident from the above graph that both broadband and narrowband subscription have witnessed a similar rate of growth. The number of broadband subscribers increased from 10.99 million at the end of Dec-10 to 11.89 million at the end of Mar-11, registering a quarterly growth of 8.17% and Y-O-Y growth of 35.49%. The following graph indicates the state-wise distribution of Internet and broadband subscribers:

Source: The Telecom Regulatory Authority of India

The states that host India’s metro cities are obviously at the top of the pyramid. Predictably, the states with the Tier-2 cities follow. Maharashtra thus has the largest Internet (=256 Kbps) subscriber base in the country. Tamil Nadu is at second place in Internet and broadband subscriber base. It seems that finding ways to expand the net of the World Wide Web into smaller towns and rural areas is the key to accelerating the growth of the Internet and increasing opportunities for social media.

And in today’s mobile phone-driven age these figures still do not include all the millions that enjoy a portable access to the World Wide Web. In the absence of sufficient data, it is safe to surmise that the advent of Internet connectivity on mobile phones has increased time spent on social networking sites.

In May 2011, The Nielsen Company released the report of a research study it conducted in collaboration with AbsolutData on social media usage in India. The study was conducted through on an online survey on a sample population of 2000 people from all walks of life spread across top five metros and Tier 1 cities in India. According to this study:

• Nearly 30 million Indians who are online consumers are members of social networking sites

• About two-thirds of them spend time on these social networking sites daily

• Just 8% spend between 1-3 hours daily on personal email

• 20% spend the same amount of time on social media sites

• 67 percent of Indians who are on the web use online reviews to help them make purchases

• 60 percent Indians who are social media users are open to being approached by brands

The 30 million figure is quite higher than the figure quoted by TRAI but despite this lack of correlation, the statistics certainly seem encouraging. Social media has clearly taken precedence over email indicating that email newsletters should start finding an alternative in the social media space. Brands should also consider inviting major review websites to try their products in the hope of a positive review. The following chart depicts the qualities that describe brands/companies that have social media presence, according to the respondees:

Source: The Nielsen Company and AbsolutData

Interestingly, transparency has the lowest number of responses among all the positive qualities. Perhaps, brands should consider making more information available on social media platforms. Social media certainly has a good scope in India considering that brands with an online presence are perceived more positively than those that don’t. However, it is important to note that no single brand owns the social media space.

To conclude, the willingness to be approached by brands is radically higher in social media but it makes sense to use social media only if your target audience is located in the tier 1 and tier 2 cities as Internet penetration still leaves much to be desired in the interiors of India.