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Online Advertising Market in India 2012

From being a small scale industry, advertising is India has evolved into a significant domain both in terns of revenue generated as well as number of people employed. Today, marketing has graduated into a quintessential aspect in a product’s success, be it a good or a service. Starting from brand image to that of brand identity, everything gets fostered through one’s advertising efforts for any particular product. Keeping this aspect in mind, one needs to keep in mind that over the period of years, online medium has developed as a prospective means of communication. Advertising industry has caught on the proposition well and diverted some of their scheme of activities towards online medium. Online advertising in India is riding on the back of enhanced Internet penetration and with active users heading northward, the sector is only poised to grow even further.

The report begins with an introduction section which throws some light on the concept of advertising, types of advertising as well as a brief differentiation of online and offline advertising. It is followed by an overview which speaks of both the Indian advertising industry and the online advertising industry. The Indian advertising industry is described with its market size and growth as well as a snapshot detailing the trend of advertising revenues and segment-wise growth rates. The online advertising industry is detailed with its market size and growth along with a break-up of the advertising industry and a segment-wise growth rates. This leads to a mentioning of the key segments of display advertisements and text advertisements. In case of online advertising sector, BFSI and travel constitute the primary verticals that source for the revenues garnered, inclusive of both display and text advertisements. The report then goes into listing the technological advancements in the sector. This section gets concluded with a Porter’s Five Forces analysis for the sector.

The report then narrows down to illustrate the business model prevalent in the sector which is followed by majority of the players. It gives a brief take on the nature of the medium aided with the metric systems available in the sector.

A brief description of the drivers that help the sector to prosper include large domestic base, positive consumer behaviour and patterns towards online media, growing proliferation of internet on mobile and large expatriate population. Online advertising derives its sustenance from internet base and with domestic internet consumer base increasing; the sector is slated for growth. Domestic consumer base is accounted as it forms the chief customer segment vis-à-vis online shopping or even online ticket booking. In the lines of growth of internet base, frequency of net usage is another aspect that gets factored. Recent data state that internet usage in India has registered a sharp increase resulting in heightened exposure to the virtual world. Amplification both in terms of consumer base as well as greater exposure to the net in terms of frequency and usage translates into solidifying the foundation of online advertising in India. With more people glued to the net, reach of advertising gets more chances of serving its purpose of rendering communication. Another recent stimulant is that of increased penetration of mobile internet which is considered as a prospective medium as advertisers target this particular segment of people who is on the move and does care to look into the messages that fill his/her mobile inbox. India has a considerable number of people living abroad who have a keen interest in the content of their country’s interest. As this segment is the one relatively on the wealthier side, advertisers target them with niche product offerings. While these factors can be termed as growth drivers, there are certain aspects that act as hindrances to the sector namely lack of trust in internet advertising and literacy and language barriers.

The major trends identified in the sector include emergence of social media marketing, internet turning into an effective sales medium, growing online marketing activities from corporate players, increase in private equity investments and Indian players expanding globally.

The competition section begins with a brief deliberation on the search engines and portals that make up the sector aided with the market share of the most of the search engines across the virtual platform in the country. The section offers a competitive landscape of the players by providing their financials and key financial ratios. It also provides basic information regarding the organizations. Key financial parameters constitute the financial performances of the players which are followed by business highlights. The section is also equipped with traffic statistics for each of the players based on global and India ranks, reach, unique page views per day and search engine redirection.

The report concludes with a section on strategic recommendations which comprises an analysis of the growth strategies of the online advertising market in India. An initiative towards developing time-bound special offers which will allow visitors to avail discounts through promotional codes or print-outs can ensure higher clicks of the advertisements.

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Online Advertising Market in India 2012
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