State of online display advertising in India

A good base of Internet users with healthy e-commerce transactions is a good sign for marketers to invest in online advertising. In India, Internet revenues account for only 3% of the total advertising market and is considered as the youngest and niche on a volume basis. However, it is expected to grow at a sustained rate of 32% over the next five years betting on the growth of Internet usage and e-commerce, according to PricewaterhouseCoopers (PwC).

Display advertising is an important segment of growth in the Internet marketing space in India. The segment grew by 38% in 2008-09 from the financial year 2007-08, according to a study conducted by IMRB research and IMAI. Forms of display advertising banners, images, logos, flash multimedia or.gif images that catch the eye of the spectators with the aesthetics.

Growth in Internet and E Commerce
The Internet is a very useful tool for marketers to reach their specific target. However, it is necessary to support a good number of active users, marketing and transactions. India is witnessing a continuous growth of Internet adoption. Users are not only seeing the Internet as a source of information, but also use it for communication, leisure and commercial activities. ComScore says that India has about 35.81 million Internet users in September 2009. It 'grew by 17% compared to 30.71 million Internet users in 2008.

In 2008-09, the growth rate of global online shopping is almost 8% to 10%. But in India, has more than 30% with a total e-commerce market in the country estimated at Rs.9, 500 crore, according to eBay India. With about 36 million Internet users and trade market and about Rs. 10,000 crore, India is among the fastest growing markets in the world of the Internet, encouraging investment online advertising.

Growth of online display advertising
Internet and Mobile Association of India (IMAI) estimates that online advertising revenue in 2008 was around Rs.500 crore. Of this amount, an important part is through the online display advertising. The industry in online display advertising has reached Rs. 325 crore in 2008-09 from Rs. 235 crore in 2007-08, according to a study conducted by IMRB research and IMAI.

Industries that encourage online display advertising
The Banking, financial services and insurance (BFSI) sector is an active contributor to online display advertising though it fell from 25% in 2008 to 17% in 2009. It is expected to contract further in 2010 to 15%. Publishers are the largest contributors with 26% of whose share should remain stable or decline slightly next year. Others, including political parties, general business goods and real estate players have contributed to 4% of advertising expenditure in 2008-09. The IT / Telecom and FMCG sectors contributed 15% and 10% respectively in 2009 and is expected to increase in 2010.

The absolute numbers is not as big as Percentages
The growth rates of Internet users, e-commerce and Internet advertising are in double digits, but the current market situation is very different. As mentioned above, Internet advertising in India contributes only 3% of the total advertising market and the smaller market segment. If we consider the display advertising in particular, will be much smaller than the game. Similar case with e-commerce. And 'highly dependent on travel and banking sectors. And as for users of the Internet, there is a lot of ambiguity about the actual number of Internet users in India.

India is a young and untapped market for Internet, e-commerce and support services. Industry experts are very optimistic about the growth potential of the Internet advertising market, citing his streak continues to grow. However, it has a long way to go to become valid for all parties and it is too early to rejoice on the rate of growth .......