Online Advertising Market - India - Sample


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Online advertising in India is fast gaining acceptance and offers an ever increasing user base. Increasing awareness among advertisers and increase in Internet penetration are driving growth of the online medium and its horizontals. The market is expected to witness only a 27% p.a. growth from 2008-2013 primarily due the massive advertising budget cuts in the industry.

The report provides a brief overview of the advertising industry in India and then focuses on the details of online advertising. The report touches upon the options for advertising online, technological advances and talks about the factors which influence growth. Reach of the Internet in the domestic market, the expatriate population and language & literacy as barriers have been discussed in the report.

The competitive landscape identifies the online ad networks operating in the country, and highlights various services offered by them. The report also covers major PE/VC deals and successful entrepreneurial ventures in the online advertising space.

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Online Advertising Market - India - Sample

  1. 1. Online Advertising Market - India July 2009
  2. 2. Executive Summary Estimated to be worth INR XX bn in 20- - and forecast to register INR YY bn in 20-- Market Online Advertising accounts for just a% Indian advertising industry Fastest growing segment in Indian advertising industry at b% CAGR from 20- - -20-- LE Online user base of ZZ mn in 20-- despite low penetration rate of just c%; computer literacy & P growing penetration in urban areas alone will add significantly to the user base Factors In addition to domestic user base, a large number of expatriate Indians, who consume Indian influencing growth M content, form a target audience A Encouraging consumption patterns including usage, frequency and response to advertising S Low Internet-user/literacy-rate ratio and low availability of Indian vernacular content exhibits immense potential since majority of users prefer accessing vernacular content BFSI, Online publishers and IT/Telecom are the major revenue contributors Niche & emerging nature of medium coupled with low barriers to entry could lead to greater Trends competition Acquisitions and investments by foreign players as well as Private Equity firms is providing a boost to this nascent industry Largely dominated by search engines and portals d% of the total revenues go to the top 8-10 portals/portal group sites Competition Online Ad networks have started gaining acceptance in the Indian market in the past 2-3 years Around X ad networks exist as of 20 -- , accounting for e% of the total online ad spend ONLINE ADVERTISING MARKET – INDIA.PPT 2
  3. 3. •Advertising Industry •Online Advertising Industry •Factors influencing growth •Trends •Competition ONLINE ADVERTISING MARKET – INDIA.PPT 3
  4. 4. Online medium currently accounts for just a% of the total market but is the fastest growing sub-segment Overview Online advertising – Share of total • Although online advertising has been in India since the dot-com era, the market crossed the INR XX bn Print LE mark as recently as 20-- d% TV • The market was worth INR YY bn in 20-- by revenue e% Outdoor growing at a% p.a. since 2004 MP • Online medium’s share of total advertising market has risen from just b% in 20-- to c% in 20-- 1% a% c% Radio Online A b% Others S • Market is forecasted to grow at a slower rate of c% p.a. till 20-- primarily due to: Current economic environment Online Advertising – Market Size Massive reduction in advertising budgets across major client sectors INR bn Revenues Pressure on prices or ad rates Share of Total Advertising f% 10 4% • However, online is growing faster than other e% 8 segments due to fundamental drivers such as: t% 3% Low input costs for advertisers 6 d% 2% Increasing awareness of online usage in India among 4 c% z marketers or advertisers b% y a% 1% Growth in online user or audience base 2 x v w 0 u 0% 2004 2005 2006 2007 2008 2009F Sources: ONLINE ADVERTISING MARKET – INDIA.PPT 4
  5. 5. Although advertising through search engines is dominant, other options include portals, online ad networks and websites Advertising Options = Ad space sold directly to advertiser Portals = Ad space sold through intermediary Search PLE Websites M Engine Website Online Ad Network SA Advertiser Online Ad Network Website Website Website • --- Website Website • --- Contributes • --- online ad space to the network Online ad networks effectively act as a one-stop interface between multiple advertisers and publishers Online ad networks effectively act as a one-stop interface between multiple advertisers and publishers ONLINE ADVERTISING MARKET – INDIA.PPT 5
  6. 6. Domestic Internet User Base • Large online user base of X mn despite penetration of just a% • Increasing penetration to significantly widen user base Literacy & Language Barrier Large Expatriate Population • Despite high literacy English usage is low • Additional target audience of large and Factors • Minimal availability of vernacular typically wealthier Indian expatriates influencing content despite majority preferring to • More access and consumption of online surf vernacular medium growth medium, including Indian content Positive Consumption Patterns • Higher speed of Internet connections • More frequency and longer duration • Increase in response to online advertising ONLINE ADVERTISING MARKET – INDIA.PPT 6
  7. 7. BFSI, Online publishers and IT/Telecom are the major revenue contributors for the online advertising industry in India ` Niche & emerging nature coupled with low barriers to entry in this industry Trends could lead to rise in competition Acquisitions and investments by foreign players as well as Private equity firms is providing a boost to this nascent industry ONLINE ADVERTISING MARKET – INDIA.PPT 7
  8. 8. The developing online advertising market in India is already witnessing stiff competition among domestic as well as international players Competition Most used search engine Company 2 • Online advertising industry in India is largely b% Company 3 dominated by search engines and portals LE c% Company 4 • In spite of the online industry’s long tail, u% of the total revenues go to the top 8-10 portals/portal d% Company 5 P 3% Company 6 group sites e% f% Others • Search accounts for almost v% of the total online ad market by revenues SAM • Company 1 dominates the search advertising market while Yahoo India has a hold on display and banner advertising a% Company 1 • Company 2, an Indian based search engine and services portal, managed w% of the total online ad Online ad networks in India revenues in fiscal year ended March 31st, 2008 A F • From the past 2-3 years, ad networks have started gaining acceptance in the Indian market B G • Currently, India has close to X online ad networks C H • In 20--, x% of total online ad spends were on ad networks which is expected to increase by Y basis D I points over the next year E J Source: ONLINE ADVERTISING MARKET – INDIA.PPT 8
  9. 9. Thank you for the attention The Online Advertising report is a part of Research on India’s Media and Entertainment Industry Series. For more detailed information or customized research requirements please contact: Gagan Uppal Gaurav Kumar Phone: +91 22 4098 7530 Phone: +91 33 4064 6214 E-Mail: E-Mail: Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. ONLINE ADVERTISING MARKET – INDIA.PPT 9