Online Ad Spends in India to touch Rs 3,575 crore by March 2015

The online advertising market in the country is estimated to grow by Rs 825 crore over 2013-14.

According to the latest findings of the Digital Advertising in India Report, the online advertising market in India is projected to reach Rs 3,575 crore by March 2015, a growth of 30 per cent over last year. The Internet and Mobile Association of India (IAMAI) and IMRB International have jointly published the Report. The online advertising market stood at Rs 2,750 crore in March 2014.

The findings have been arrived at after conducting primary and secondary research. Primary research included interviews conducted with internet users and online advertising industry players. The secondary research was conducted to understand the structure and dynamics of the digital advertising industry, from various published sources.

The report finds that search and display are the top two contributors to the total digital advertisement spends in India. Of last year's Rs 2,750 crore, search ads constituted 38 per cent followed by display ads, which contributed 29 per cent and social media, which accounted for 13 per cent of overall digital spends.

It is estimated that spends on search advertisements will reduce while spends on e-mail, video and mobile advertisements will increase. 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. Last year, the contribution of search spends fell to 30 per cent of the overall digital spends.

The report further adds that ad spends on mobile devices are growing at a CAGR of 43 per cent and that of social media by 41 per cent. Spend on video grew at a CAGR of 51 per cent while spends on e-mail ads grew at a CAGR of 16 per cent. On industry wise spends, the report finds that e-commerce, telecom and FMCG and consumer durables are the top three verticals driving digital ad spends in India.

The overall ad spend in India across all media is Rs 38,598 crore (2013 figures), up by 12 per cent over the previous year. Television was the biggest beneficiary, accounting for a share of 44 per cent of the overall spend. With the rapid growth in penetration of the internet across urban and rural India, marketers are focussing more on the spending their media budgets on different digital avenues.

IAMAI estimates that - as of June 2014 - there were 243 million claimed internet users in India, of which 192 million are active users who access the medium 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.