MUMBAI: As of June 2014, there were 243 million claimed internet users in India out of which 192 million are active internet users who access internet at least once a month. There has been a consistent growth in the number of internet users over the past few years. In urban cities, the penetration of active internet users is nearly 36 per cent whereas in rural villages the penetration is 6 per cent. There is a large part of the population that still needs to be included in ensuring a large-scale digital adoption in the country.
The latest finding of the ‘Digital Advertising in India’, a report jointly published by the Internet and Mobile Association of India (IAMAI) and IMRB International, reveals that the online advertising market in India is projected to reach Rs 3,575 crore by March 2015 with a y-o-y growth rate of 30 per cent.
The report finds that currently, search and display are the top two contributors to the total digital advertisement spends in India. Of the Rs 2,750 crore digital advertisement market, search ads constitute 38 per cent of the overall ad spends followed by display ads which contribute 29 per cent and social media contributing 13 per cent of overall digital advertisement spends. It is estimated that the proportion of spends on search advertisements will reduce and spends will increase on email, video and mobile advertisements.
By 2015, spends on video ads will grow by a CAGR of 56 per cent and contribute 12 per cent to the overall market share of digital advertisements. In FY ending in March 2014, the contribution of search spends reduced to 30 per cent of the overall digital advertisement spends i.e. contributing Rs 825 crore to the Rs 2,750 crore digital advertisement market.
According to the report, ad spends on mobile devices are growing at a CAGR of 43 per cent and social media is grew at a CAGR of 41 per cent y-o-y and touched Rs 385 crore and Rs 440 crore in March 2014. Spend on video grew at CAGR of 51 per cent and reached Rs 303 crore. Spends on email ads grew at a CAGR 16 per cent to reach Rs 88 crore.
Further, on industry wise spends, the report finds that e-commerce, telecom and FMCG & consumer durables are the top three verticals driving the digital advertisement spends in India.
Digital ad spend on mobile devices is 14 per cent whereas on desktop PCs, laptop computers, it is 86 per cent. Although traditional media still holds strong ground in the Indian ad space, digital advertising is catching up fast and is expected to overtake traditional media within the next 5 -10 years.