For the complete report, get in touch with us at : info@netscribes.com 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 sha

1. Online Advertising Market – India
May 2012

2. Executive Summary
 Indian advertising industry is expected to witness a growth CAGR of a1% over the period 2011‐
2015e
 Online advertising industry in India is the fastest growing segment in the advertising industry
Market  It is divided into two types of advertisements namely a2 and a3
 BFSI, Travel Telecom, Online Publishers are some of the highest spenders on the online medium
for advertisements
Drivers
LE Challenges
Factors
influencing
 Large Domestic Internet base
MP
 Positive consumer behavior & patterns
 Lack of trust in internet advertising
 Literacy and language barriers
A
towards online media
Growth
S
 Growing proliferation of internet on mobile
 Large Expatriate Population
 Emergence of Social Media networking  Increase in private equity investments
Trends  Internet turning into an effective Sales medium  Indian players expanding globally
 Growing online marketing activities from corporates
 The industry in India is dominated by search engines and portals
 Although India has a large network of players operating strongly in the domestic market, foreign
Competition ad networks are also making their way into the Indian market to utilize the large consumer base
 Competition in the market is likely to increase with entry of more and more multinationals
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 2

3. •Market Introduction
•Market Overview
Indian Advertising Industry
Online Advertising Industry
•Business Model
•Drivers & Challenges
•Trends
•Competition
Traffic Statistics
•Strategic Recommendations
•Appendix
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 3

4. Display advertisements dominate the online advertisement
market in India SAMPLE
Online Advertising Industry – Overview
• Online advertising is a form of marketing Online Advertising Industry – Growth
communication on the Internet which intends to:
 Influence a consumer towards purchasing or taking up an
action on the content displayed on the website with INR bn
respect to products, ideals, or services c2
c3
• The market is currently dominated by Display ads
and comprises rich media, video and classifieds
• Factors such as growing internet base (computers c1
and mobiles), growing popularity of social media
0
networking sites are also fueling growth in the online
2011 2015e
advertising market in India
Advertising Break Up Segment Growth Rates
c10 S1 S3
c9 S2 S4
c8
Others c5 c4
c7
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 4

5. BFSI and Travel industry remain the dominant advertisers
on the online media in India
Display Advertisements ‐ Overview
SAMPLE Text Advertisements ‐ Overview
• Text advertising market in India is estimated
• Display advertising market in India is
at INR a8 in FY 20‐‐ and is expected to reach
estimated at INR a4 in FY20‐‐ and is expected
INR a9 in FY 20‐‐
to grow to INR a5 in FY 20‐‐
• BFSI leads this form of advertising by holding
• Travel, BFSI and Telecom are the largest
the maximum share followed by the Travel
advertisers in this medium
sector
• Some new advertisers that are fast evolving in
• However, industry sectors such as Telecom,
the display ad space include FMCG, Education
Auto are fast catching up
 FMCG is expected to account for a6% and
 Telecom accounted for a10% and Auto to
Education for a7% in the display
account for a11% of text advertising
advertising spends in FY20‐‐
spends in FY20‐‐
Spend Spend
High
14% 14% High
12% 12%
Medium Medium
8% Low 8% Low
High: more than 10%; Medium: 5‐10%; Low: less than 5% High: more than 10%; Medium: 5‐10%; Low: less than 5%
Display Advertisements Spends (FY 20‐‐) Text Advertisements Spends (FY 20‐‐)
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 5

6. Advertising through search engines is dominant with other
options including portals, online ad networks and websites
ADVERTISING OPTIONS
SAMPLE
In this case, ad space is sold Herein ad space is sold through
directly to the advertiser the intermediary wherein
X1 wherein the advertiser directly there is an ad network who
contacts the media connects the 2 parties
Description
ONLINE WEB SITE
AD
NETWORK
A
D • Sells aggregated x4
X2 V to advertisers
E • X5 sold in return WEB SITE
R for a fee or
Description commission
T
• Offers affiliated
I
services or
S solution to both
E parties –
R advertisers & WEB SITE
X3 publishers
Description
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 IN INDIA 2012.PPT 6

7. Drivers & Challenges – Summary
Drivers Challenges
Large domestic internet base Lack of trust in internet advertising
Positive consumer behavior &
patterns towards online media Literacy and language barriers
Growing proliferation of internet on
mobile
Large Expatriate Population
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 7

8. Growing internet base coupled with options including
mobile internet is providing fillip to the market
Large Domestic Internet base Impact
•The user base of internet in India is constantly increasing and as such it offers a lot
of opportunities for online players
P L E
•The prevalence of cyber cafes have helped internet penetration in small towns and
M
villages, skewing the users‐to‐subscribers number to more than 4 times
SA
 Moreover, reducing cost of PCs and internet tariffs has helped in popularizing it in India
•Therefore, increasing internet penetration in India has motivated consumers to use
it as a medium for various activities such as online shopping, online ticket booking
etc
Total Internet Subscribers – India Number of Broadband Subscribers – India
Subscriber Base mn Rural Subscribers Subscriber Base mn
Urban Subscribers
d1
0 0
2008 2009 2010 2011 2012e 2013e 2014e 2015e 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 8

9. Trends – Summary
Emergence of Social Media
networking
Indian players expanding Internet turning into an
globally Key effective Sales medium
Trends
Increase in private equity Growing online marketing
investments activities from corporates
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 9

10. Online marketing activities help companies to provide real
time insights to their consumers on their products SAMPLE
Growing online marketing activities from corporates
• Corporate concerns in the current market scenario have realized the importance of correct and Online
efficient marketing activities in order to promote their products and services marketing
 Since more number of consumers are now preferring the online medium to make their purchases as well as activities on the
for searching information, companies are looking to create appropriate visibility for their products rise
• Companies are finding the online medium more efficient in comparison to television and print
ads as it can engage the consumers actively thereby promoting real time engagement and
awareness about the products
 Moreover, Internet is a cost effective advertising medium for the companies and helps in immediate
interaction with end users
Some of the activities observed in the online advertising domain are as follows
• p1
Advertisers promoting social
• p2
messages
• p3
• p4 Aim to increase brand
• p5 exposure
Auto, banking, insurance, • p6
education and travel
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 10

11. Private: Domestic Company – Player 1 (1/3)
Company Information
SAMPLE
Offices and Centres – India
Registered Address
New Delhi
Tel No.
Fax No.
Website
Year of
Incorporation Registered
Address
Products and Services
Category Products/Services
Advertising Online Advertising Key People
Name Designation
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 11

12. Private: Domestic Company – Player 1 (2/3)
Financial Snapshot Key Ratios
Profit y‐o‐y change
Particulars 2011 2010 2009 2008
Total Income Total Income (2011‐10)
INR mn
INR mn
E
Profitability Ratios
Profit / Loss
6 Operating Margin ‐3.76 2.54% 6.30% 6.46% N.A.
L
5 Net Margin ‐3.61 1.42% 5.03% 5.35% N.A.
P
Profit Before Tax Margin ‐3.76 2.54% 6.30% 6.46% N.A.
4 Return on Equity ‐88.66 49.71% 138.38% 146.62% N.A.
M
3 Return on Capital Employed 19.22 ‐13.20% ‐32.42% ‐119.06% N.A.
Return on Working Capital ‐19.24 9.82% 29.06% 44.13% N.A.
SA
2
Return on Assets ‐15.70 8.82% 24.52% 25.94% N.A.
1 Return on Fixed Assets ‐365.25 328.56% 693.80% 555.88% N.A.
0 0 Cost Ratios
2009 2010 2011 Operating costs (% of Sales) 3.76 97.46% 93.70% 93.54% N.A.
Administration costs (% of
N.A. N.A. N.A. N.A. N.A.
Financial Summary Sales)
Interest costs (% of Sales) N.A. N.A. N.A. N.A. N.A.
• Company incurred a net profit of INR f1 in FY 2011, as Liquidity Ratios
compared to net profit of INR f2 in FY 2010 Current Ratio ‐1.69% 1.41 1.43 1.47 1.54
Cash Ratio 137.90% 0.15 0.06 0.21 0.15
• It reported total Income of INR f3 in FY 2011, registering Leverage Ratios
an increase of f4% over FY 2010 Debt to Equity Ratio N.A. N.A. N.A. N.A. N.A.
Debt to Capital Ratio N.A. N.A. N.A. N.A. N.A.
• Earned an operating margin of f5% in FY 2011, a
Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.
decrease of f6 percentage points over FY 2010
Efficiency Ratios
• The company did not report any debt to equity ratio both Fixed Asset Turnover 67.67% 231.31 137.95 103.87 0.00
in FY 2011 and FY 2010 Asset Turnover 27.41% 6.21 4.87 4.85 0.00
Current Asset Turnover 14.95% 2.01 1.75 2.62 0.00
Working Capital Turnover 19.69% 6.92 5.78 8.25 0.00
Capital Employed Turnover 27.20% 35.00 27.51 27.40 0.00
Improved Decline
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 12

13. Private: Domestic Company – Player 1 (3/3)
Key Recent Developments
SAMPLE
Description News
• Operates as a wholly owned subsidiary of b1 plc whose primary activity includes b2, b3,
b4 and b5
Overview • It provides services to more than b6 blue‐chip clients and agencies with over b7 staff
across the world
• ‐‐ uses b8 core online advertising channels namely search, affiliate and email
• B9 and b10 have jointly acquired performance marketing firm b11
• The Board of b12 has entered into a sale of and purchase agreement for the disposal of
Buy Out one of its trading agencies b13 to that of b14 and to b15
 However, both the concerns will continue to run separately wherein b16 will be the MD of b17 and
b18 will be headed by b19
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 13

14. Traffic Statistics – Player 1
Ranks
SAMPLE Most Viewed Sub‐Domains
Z1 Z2
Global Rank
Global Rank Y1
India Rank
India Rank Y2
Reach
Reach Y3
Audience Snapshot Technical Details
Age (Years) Y4 Unique Page Views/Day
Age (Years) Unique Page Views/Day Y7
(%)
(%)
Gender Y5 Search Engine
Search Engine
Gender Redirection (%) Y8
Redirection (%)
Average Load Time
Time (mm:ss) Y6 Average Load Time Y9
Time (mm:ss) (Secs)
(Secs)
ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 14

15. Thank you for the attention
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ONLINE ADVERTISING MARKET IN INDIA 2012.PPT 15