Internet Advertising Scenario in India

Internet Marketing Facts & Figures

As of the end of 2007's third quarter, Google had almost 25 percent of the U.S. Internet advertising market, up from almost 21 percent in 2006's third quarter, according to IDC. Meanwhile, Yahoo's share during this period dropped to 11.3 percent from 12.3 percent, while Microsoft's declined to 5.2 percent from 5.8 percent, according to IDC.

In search usage, Google held a commanding 62.4 percent of queries worldwide, followed by Yahoo in a very distant second place with 12.8 percent, according to comScore. Microsoft ranked fourth with 2.9 percent, after Baidu (5.2 percent).

Internet Marketing and India

The latest report from CIA Factbook pegs the Indian Internet audience at 50.6 mn, 4th behind the US, China & Japan. The future growth in the Internet audience is expected to be from Brazil, Russsia, India & China (BRIC). Needless to say, the growth in the Internet audience will of course fuel a huge growth in advertising and communication on the Internet.
• The use of the Internet will move from just being a PC phenomenon to accessing the world wide web through other devices like mobiles, smart phones, etc.
• Mobile phone are growing at a very fast pace in India, especially the CDMA segment. This augurs well for the internet access, especially since the access device is beyond the PC.
• The Internet penetration in India is just about 4.5%. Hence, growth potential is huge. In the next five years, India is tipped to be the No. 2 country in terms of Internet Audience, 2nd only to China.
• The Internet audience in India is predominantly a male audience (70% male), 50% + in the 20 to 39 years age group and the largest primary access point is office. All this makes the Indian Internet audience a highly desirable audience for any marketer.
• To put this in perspective, the overall English print readership is around 30 mn and the English print advertising market is about US$ 400 mn. Compared with this the size of the Internet advertising market in 2005 was US$ 26 mn. The growth potential, is therefore, really huge.
• Display advertising is expected to grow at a rate of at least 50% for this year. In 5 years time, display advertising on the net is expected to grow to US$ 128 mn. Adding on search, which is growing at a phenomenal pace ( In the US, search accounts for 40% of the spends on the Internet and this trend is being mirrored elsewhere), the overall advertising spends on the Internet is estimated to be around US$ 214 mn.
• This would be approximately 4.9% of the overall advertising spends in the country. Again, the projections seem quite on track as the Internet spend ratio in the US for 2004 was at 4.8% and for the 2005 at approx. 6.5%.
• If anything, the actual spends may even be higher than the current projections.