Understanding internet industry in india

1. Understanding Internet Industry in India

2. New Media(Digital)
New media continued its growth trajectory in 2012, albeit slightly slower than the previous years, with estimated growth in
advertising revenues of close to 40 per cent over last year. Coming in at approximately Rs 22 bn in revenue in 2012, digital ad
spend reached approximately 6.7 per cent of the total M&E sector’s advertising revenue, the report said. Monetization in the
new media space in India continues to remain dependent on revenues from advertising. Growing at close to 40 percent, the
online Ad market (excluding mobile) in India touched INR 20 billion in 2012, and is expected to grow at a 32 percent CAGR to
reach INR 74 billion in 2017. Mobile advertising currently accounts for a small share of the market, estimated at INR 1.7 billion
India – Digital Advertising Market
Desktop Internet Advertising
100
90
14
80
70
9
60
50
6
40
74
4
30
3
20 2
26
1020
43
33
56
0
2012
Source: KPMG India analysis and industry discussions
2013P
2014P
2015P
2016P
2017P

3. India Digital Reach
Significant share of the Global & Indian population had adopted
Internet & Digital Media
Digital goes Online
World
India
Internet Users
2.4 Billion
137 Million
Mobile Internet Users
2.1 Billion
79 Million
1 Billion
44 Million
Smartphone Users
Sources: Internet World Stats, Mobithinking, Medianama, Trak, Digital Insights, Business Today
India has 554.8 million mobile users and 137 million Internet
users
India already has more mobile users in its villages as compared
to its cities and towns.
India has 23.8 million individuals who access Internet from their
mobile phones using a data connection such as GPRS or 3G.
Rural India will have 68 million claimed internet users and 46
million active users by the end of October 2013.
Social Media Users
World
India
Facebook
1.15 Billion
78 Million
Twitter
500 Million
33 Million
LinkedIn
238 Million
20 Million
Instagram
130 Million
4 Million
Pinterest
70 Million
5.5 Million
About 7.1 million users who access Internet exclusively through
mobile data connections are in rural areas.
Predicted number of Social Media users by Dec,2013 : 80 million
Social media users, residents of towns with population of under
5,00,000 : 33%
Social media users residents of smaller towns with population
smaller than 2,00,000 : 25%

4. Digital Marketing an Opportunity?
Indian Digital Media Spending (INR Crores)
30%
2,938
29%
2,260
54%
1,750
1,140
FY 2010-11
FY 2011-12
FY 2012-13
FY 2013-14
(Est.)
Spending by Top Digital Marketing Categories (INR Crores)
Category
Search
Display
Social
Mobile
Video
Email
FY 2010-11
493
557
90
NA
-
FY 2011-12
718
595
175
123
88
53
FY 2012-13
850
662
300
230
150
68
The Indian online landscape is very different. There are 137 million
internet users in India now that makes it the 3rd biggest internet market.
Moreover, India is one of the top market for mobile phones in the world.
With millions of mobile subscribers and rapidly increasing mobile
internet, India provides a great opportunity for marketers.
The size of digital advertising in the overall advertising pie increased from
Rs.1,750 crore in 2011-12 to Rs.2,260 crore in 2012-13.
Market size in India:
Mobile Ads Spend
2012-13: INR 230
Crores
Search Ads Spend
2012-13: INR 850
Crores
Social Media Ads
Spend 2012-13:
INR 300 Crores
Source for Digital Marketing Spending: : IMRB International and IAMAI
Display Ads
Spend 2012-13:
INR 662 Crores
Email Ads Spend
2012-13: INR 68
Crores

5. India: Internet and TV Landscape
India – Internet connections, 2012-2017 P
Million Connections
450
India Internet VS. TV Penetration, 2012 -2017
1000
400
55
350
762
791
600
40
250
200
34
29
150
50
731
848
873
47
300
100
800
820
25
99
139
232
174
286
331
200
0
2012
2013P
400
2014P
Wireless connections
2015P
2016P
2017P
Wireline Connections
As expected, mobile and wireless connections continued to drive the growth of
internet penetration in India. By the end of 2012 there were 124 million internet
connections in India, a rise of 41 percent over last year. Over last year fixed line
connections grew by 11 percent. Over the same period, wireless connections have
grown by almost 50 percent, outlining the importance of mobile data access in the
overall digital economy .
Going forward, the total number of connections is expected to surpass 380 mn by
2017, with wireless connections comprising nearly 90 percent of all connections
added over 2012-2017. The projected growth is slightly lower than last year
primarily due to continued uncertainty over 4G roll-out and continued uncertainty
in the telecom environment
Source: KPMG India analysis and industry discussions
174
226
276
351
426
496
0
2012
2013P
2014P
2015P
2016P
2017P
Internet Users
Taking into account multiple users for a single wire line connection, the number of
internet users reached 174 million in 2012, about 25 percent of the size of the total
TV viewers in the country and is expected to reach over 60 percent of total TV
viewers by 2017

6. Share Of Internet Enabled Devices
Shared of Internet enabled devices 2017
Shared of Internet enabled devices 2012
5%
46%
2%
62%
30%
Feature phone
Feature phone
16%
17%
22%
Smart phones
Tablets
Smart phones
Tablets
Pcs & NoteBooks
Pcs & NoteBooks
The devices are getting smarter, the users more engaged: In 2012, almost half of wireless access was via feature phones, but a rapid change in the device
ecosystem on the ground, means that 2013 will be the first year when feature phones will cease to be the main use of internet access in the country. This shift
is already having far reaching consequences for content providers, media platform owners (both on deck and off-deck) and telecom companies.
Smart phones and tablets have an installed base of approximately 44 million and 2.5 million units respectively, comprising a third of internet enabled devices
in India. Driven by several cheaper smart phone options and more low cost tablets coming into the market, the share of these devices is expected to increase
to 67 percent of all devices, by 2017.
Source: KPMG India analysis and industry discussions

7. Industry wise Digital Marketing Ad Spend in India
Auto
BFSI
Consumer Durables
E-Commerce Players
Education
Electronic Midea
FMCG
IT
Online Publishers
Others
Print Media
Telecom
Travel
Total Ad Spend
2010-2011 2011-2012 2012-2013
114
297.5
293.8
205.2
192.5
271.2
68.4
122.5
158.2
0
105
113
68.4
105
158.2
45.6
35
45.2
68.4
122.5
203.4
102.6
140
180.8
114
157.5
203.4
34.2
17.5
22.6
11.4
17.5
22.6
125.4
227.5
316.4
182.4
210
271.2
1140
1750
In the financial year 2013-14, online advertising market on an
average is expected to grow by 40 percent (last four years
average). In 2012-13, the industry verticals which has
performed well include: Auto (13%), BFSI (12%), Travel (12%)
and Telecom (14%). In 2012-13, one of the verticals which has
seen decline in spend is Ecommerce, which constitutes to about
5% of the total market spend which was 7% in FY 2011-12.
2260
INDUSTRY WISE DIGITAL MARKETING AD SPEND IN INDIA
2012-2013
BFSI
CONSUMER
DURABLES
E-COMMERCE
PLAYERS
EDUCATION
ELECTRONIC
MIDEA
FMCG
ONLINE
PUBLISHERS
OTHERS
210
22.6
17.5
11.4
22.6
17.5
34.2
IT
182.4
227.5
125.4
203.4
114
157.5
180.8
140
102.6
203.4
45.2
45.6
35
68.4
122.5
158.2
105
68.4
113
0
68.4
105
158.2
122.5
192.5
205.2
114
AUTO
271.2
316.4
2011-2012
271.2
293.8
297.5
2010-2011
PRINT MEDIA
TELECOM
TRAVEL

8. Understanding Digital Market Landscape
Email Marketing
SMS Marketing
Social Search and
Creative
Digital ad-network
Mobile VAS
Marketing

9. Thanks!
Thanks
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