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Google, Facebook corners more than half of advertising revenue spend in Asia

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NEW DELHI: Google and Facebook have cornered around 60 per cent of the advertising revenue spent online in Asia, even as the online spending on commercials in India is around seven per cent.

A study by Economist Intelligence Unit‘s (EIU) report on environment for Asia‘s Internet businesses revealed that the market is challenging as its size in Asia is still small and there are many players competing in the online advertising space.

Monetisation through online advertising is not easy, as even big names in the global publishing industry have seen that there are simply too many players competing for same advertising dollars, the report said.

"In Asia this is compounded by the small size of individual markets. In Malaysia and Thailand, for example, just one per cent of advertising revenue is spent online. In India, this is slightly higher at seven per cent. But of the $ 410 million being spent online, 60 per cent goes to Google and Facebook, with only the remaining 40 per cent going to other online players," it added.

This is mainly because Google and Facebook have the highest number of users on the internet, being the top two sites in the world.

"Online advertising budgets, while growing, remain small and skewed towards the larger players. While e-commerce is growing rapidly, finding the winning business model remains difficult in many markets," the EIU report said.

Outside of North Asia, entrepreneurs report that internet users are reluctant to pay for intangible items such as content. This is particularly so when there is pirated content easily available, it added.

However, EIU said mobile advertising is slowly gaining traction and Asia will be one of the biggest markets.

While online advertising in Asia is forecast to grow at a modest pace (from 24 per cent of worldwide online advertising in 2010 to 26 per cent by 2015), the mobile advertising market is really taking off.

By 2015, Asia is expected to account for one-third of the mobile advertising market globally, it said.

Online advertising spend in India was about Rs 2,260 crore as of March 2013 and is estimated to grow to Rs 2,938 crore by 2014, while, mobile advertising is estimated to reach Rs 250 crore in 2013, a growth of 40 per cent year-on-year.

Globally, online advertising revenue stood at USD 99 billion in 2012, which is estimated to grow at 15 per cent to USD 113.5 billion in 2013. In the case of mobile advertising, the revenues were USD 6.4 billion in 2012 and is expected to touch USD 9.7 billion in 2013.

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