Internet Advertising in India

Total value of online ad market expected to increase to Rs3, 575 crore this financial year, says report

New Delhi: The online advertising market in India is projected to grow 30% in the current fiscal year as advertisers warm up to the more measurable nature of the digital medium that helps brands understand their advertising campaign’s popularity and success in real time.

The total value of the online advertising market in India is expected to increase to Rs.3, 575 crore in the year ending 31 March from Rs.2, 750 crore in the year earlier, according to the latest Digital Advertising in India report, jointly published by lobby group Internet and Mobile Association of India (IAMAI) and IMRB International, a market researcher.

The Internet and new media space in India continues to remain dependent on revenues from advertising, according to the report.

“This high growth can be attributed to the increasing advertisement measurability which is both quick and effective. The online advertisements follow a cycle of activities which can simply be summarized as planning, targeting, engaging and measuring, ” the report said. “ Out of these, measuring is the main aspect that is aggravating the usage.”

In addition, the increasing adoption of mobile devices, connectivity and improvements in broadband infrastructure will lead to increased investments in more content rich advertisements formats such as video and social media advertisements.

Currently, search (30%) and display (23%) advertising contribute a lions share to the total online ad market in India. But spending on both search and display advertising are expected to go down as newer forms of digital ads emerge. Ad spending on mobile devices are growing at an annual average pace of 46% while that on social media are growing at an annual rate of 41% and stood at Rs.385 crore and Rs.495 crore in March, respectively. Spending on video advertising online have reached Rs.330 crore and is expected to grow at an annual pace of 56%.

“Mobile advertising in India is the fastest growing among all verticals in the digital advertising space. This is primarily because consumers are spending more time on mobile Internet activities as compared to desktops, subsequently growth in desktop Internet is fast getting saturated, ” said, national trading head, digital media, at, a media buying agency of . Growth in the e-commerce category and their ad spending on digital media are the highest contributor to online advertising with Rs.495 crore worth of revenue, followed by telecom and consumer goods and durables.

“Digital marketing is effective for a few reasons. Most important being that it is measurable and you can granularly measure every penny that you have invested. Your efficiency goes up dramatically. Its also gives flexibility to scale up and down according to the campaign performance. Fashion and lifestyle works well through social media advertising while the electronics category does well through search related advertising, ” said, senior vice-president, marketing at, an online retailer.

It also becomes imperative to use digital media for the e-commerce industry as it can result in immediate online sales by directly clicking on the ad, added Komaravelly.

Meanwhile, the telecom sector, which contributes Rs413 crore to the online ad ecosystem, believes that their new wave of consumers are all online.

“One clear trend that’s happening in telecom is the continuous increase in data consumption and decline in traditional revenue sources of voice and SMS. Data is essentially apps and web usage which means the next generations of our consumers is spending their time online hence it makes sense to target them online. They now consume music online, watch videos online, text using apps so therefore our money is shifting from traditional avenues to digital, ” said a marketing executive of a telecom company who spoke on condition that neither he nor his frim be named.