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.
Executive Summary
Estimated to be worth INR XX bn in 20- – and forecast to register INR YY bn in 20–
Online Advertising accounts for just a% Indian advertising industry
Fastest growing segment in Indian advertising industry at b% CAGR from 20- – -20–
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
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
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
Its classified into
•Advertising Industry
•Online Advertising Industry
•Factors influencing growth
•Trends
•Competition
Online medium currently accounts for just a% of the total market but is the fastest growing sub-segment
Overview
• Although online advertising has been in India since the dot-com era, the market crossed the INR XX bn mark as recently as 20–
• The market was worth INR YY bn in 20– by revenue growing at a% p.a. since 2004
•Online medium’s share of total advertising market has risen from just b% in 20– to c% in 20–
•Market is forecasted to grow at a slower rate of c% p.a. till 20– primarily due to:
Current economic environment
Massive reduction in advertising budgets across major
client sectors
Pressure on prices or ad rates
• However, online is growing faster than other
segments due to fundamental drivers such as:
Low input costs for advertisers
Increasing awareness of online usage in India among
marketers or advertisers
Growth in online user or audience base
The developing online advertising market in India is already witnessing stiff competition among domestic as well as international players
Competition
•Online advertising industry in India is largely dominated by search engines and portals
• In spite of the online industry’s long tail, u% of the total revenues go to the top 8-10 portals/portal group sites
• Search accounts for almost v% of the total online ad market by revenues
• Company 1 dominates the search advertising market while Yahoo India has a hold on display and banner advertising
• Company 2, an Indian based search engine and services portal, managed w% of the total online ad revenues in fiscal year ended March 31st, 2008
• From the past 2-3 years, ad networks have started gaining acceptance in the Indian market
• Currently, India has close to X online ad networks
• In 20–, x% of total online ad spends were on ad networks which is expected to increase by Y basis points over the next year
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