OnlineAdvertising 46

REPORT ON
ONLINE ADVERTISEMENTS: 2010
November 2010
Online Advertising in India
Contents
Executive Summary ...................................................................................................... 3
Methodology .................................................................................................................. 4
Online Advertising ........................................................................................................ 5
Evolution Model ...................................................................................................................... 5
Market Size .................................................................................................................... 6
Display Ads ............................................................................................................................. 7
Text Ads ................................................................................................................................. 8

Internet Users in India ......................................................................................................... 9
Industry Trends ......................................................................................................................10

BFSI...................................................................................................................................10
Auto ...................................................................................................................................11
Travel.................................................................................................................................12
Online Publishers ...............................................................................................................12
IT - Information Technology ...............................................................................................13
Telecom .............................................................................................................................13
FMCG ................................................................................................................................14
Consumer Durables ...........................................................................................................14
Education ...........................................................................................................................15
Online Marketing Activities .....................................................................................................16

Advertising on Social Networking .......................................................................................16
Online Advertising viewed by Internet Users ........................................................... 17
Challenges ................................................................................................................... 19
Future Of Online Advertising In India ........................................................................ 20
Page | 2
EXECUTIVE SUMMARY
As the number of Active Internet Users continues to surge in India (currently standing at 52
million1), Internet as a medium is fast evolving not only into a compelling medium but also a
highly efficient media vehicle for marketers (Source: I-Cube 2009 – IMRB’s annual syndicated
study on Internet in India). This coupled with the challenges to stand out using other available
media, calls for the need to source creativity and innovation with Internet as backbone.
Internet has enabled various new dimensions that allow marketers reach target segments in
the most measurable, interactive and more essentially, cost-effective ways. While advertising
on the Internet knows no geographic boundaries, technology is already available to help
marketers focus only on specific markets and target segments. With so much on platter,
inevitably Internet is a medium to stay and not wither away. Taking that into perspective, the
purpose of the report is to take a deep-dive into the Online Advertising scenario in India.
Having reported the Online Ad Industry for more than three consecutive years, we have added
the analysis of Text Advertisements (in addition to the Display Ads) that allows greater
understanding of online advertising trends as a whole. Based on the report, Online Advertising
in India is estimated to have reached Rs. 785 crores for FY 2009-10 of which, Text
Advertisements accounted for Rs. 368 crores.
The study also reveals that display advertisements contributed Rs. 417 crores to the overall
figure, as predicted in our previous reports. Display Advertising continues to surge, registering a
growth of 22% over previous year’s figure of 325 crores. In FY 2007-08 Display Advertising was
estimated to be Rs. 235 crores, registering growth of 77% in two years.
Online Advertising is expected to grow by 26% in the year FY 2010-11 over FY 2009-10.
Interestingly though, the study reveals that big spending veteran advertisers like BFSI continue
to repel away from Display Advertising (from 25% in FY 2007-08 to 17% in FY2008-09 and 13%
in FY 2009-10).
Industry vertical wise, Auto, BFSI, Online Publishers, Travel, IT & Telecom are the biggest online
spenders and they continue to remain so. FMCG companies are one of the biggest advertisers
on Television and other conventional media, but they are relatively new to Online Advertising.
It is expected that FMCG’s online ad spend will gradually increase over the next couple of years.
Education appears as another vertical likely to grow in future.
1
Source: I Cube 2009 – Sept. 2009 estimates
Page | 3
METHODOLOGY
The results of the report are arrived at by conducting primary as well as secondary research.
Report follows the financial year and details information captured from respondents for the
year FY 2009-10. Estimates based on inputs as provided by industry players are for the year FY
2010-11 (April 2010 – Mar 2011).
Primary research: Primary research was conducted with industry experts as well as Internet
users.
Industry stakeholders: Depth interviews were conducted with industry experts across
stakeholder categories of Online Advertising industry in India. Respondents for the depth
interviews included experts from Ad Agencies, Media Agencies, Ad Networks, Publishers,
Advertisers, Affiliate Marketing agencies, SEM & SEO Companies etc.
Internet users: Structured face to face quantitative research was conducted with 800
individuals across among 15 cities during I Cube 2009, a syndicated product of eTech, IMRB
International.
Cities by Strata
Top 4 Metros Delhi, Mumbai, Chennai and Kolkata
Other 4 Metros Bangalore, Hyderabad, Ahmedabad & Pune
Small Metros (More than 1 Million Population) Patna, Cochin, Lucknow, Ludhiana, Indore
Non Metros (Between 0.5 to 1 Million Population) Guwahati, Bhubaneshwar
Secondary research was done to understand the structure and dynamics of the Online
Advertising in India. Information from various published resources was used to perform a data
validation check.
Information collected from secondary as well as primary research was thoroughly analyzed in
preparing the report.
Additions in this round of report:
Online Advertising report always updated to encompass changing market dynamics. Details of
new features included in this report include:
Market sizing and advertiser segment analysis for Text Ads is added for the first time
Travel industry is added separately as advertiser segment
IT & Telecom industry is now analysed as separate advertisers
Advertisement on Social Networking sites is estimated
Page | 4
ONLINE ADVERTISING
Online Advertising is a form of marketing communication on the Internet, intended to persuade

an internet user (viewers, readers or listeners) to purchase or take an action upon content
displayed on a website (or webpage) in relation to products, ideals, or services.
One of the most intriguing advantages of online advertising is its capability to immediately
publish information and content that is not limited by geography or time. This coupled with the
ability to tweak or customize the advertising content and locations, makes it an efficient
medium.
Online advertising can be classified in two types
Text Ads - Advertisements made up of text (displayed largely as sponsored links on

search engines), which are backed by hyperlinks which when clicked on, takes the
potential customer to the advertiser's web site. Text ads are generally lower in cost than
banners, as they are simple and a lot of web sites accept them.
Display Ads - Ads that are placed at various points on a web page that typically contain
text, logos, photographs or other images. Banner ads are priced slightly higher than text
ads are known to have higher effectiveness.
EVOLUTION MODEL
Online ads have evolved from CPI (Cost Per Impression) or CPM (Cost Per Mille-1000
Impressions) to CPC (Cost Per click) to CPA (Cost Per Acquisition) and this transition is observed
among advertisers. Following illustration depicts how this shift from CPC to CPA is observed.
Veteran advertisers such as BFSI, Auto, and Travel are gradually moving towards Performance
Based advertising.
Cost Per Impression Cost Per Click Cost Per Lead Cost Per
/ Mille (CPC) (CPL) Acquisition
(CPI / CPM) (CPA)
• Fundamental • Used most by •A step • Advertiser

online new towards pays purely
advertising advertisres performance based on
model, used based Performance
for display ads campaign • Veteran
• However, this • Advertisres online
model has its from Auto advertisers
limitation as it and IT such as BFSI
is not indusustry and Travel are
performance have moved using this Page | 5
based model from CPC to model the
CPL now most
MARKET SIZE
Total Online Advertising market of India is estimated at Rs. 785 crores for the year2 FY2009-10
and is expected to grow to Rs. 993 crores in year FY2010-11. Market is currently dominated by
Display ads and is expected to remain so for the next year.
Market size for Text3 Advertisements is calculated for the first time in this round of the report.
Earlier two rounds of the report had market size for Display Ads only. Overall Display ad market
is expected to grow by 28% while Text is expected to grow by 26% in FY 2011.
Online Ads Market Size
28% 534
540 417 459

490
440 325 368 26%
Rs. Crores
390
235
340
290
240
190
FY 2008 FY 2009 FY 2010 FY 2011 (E)
Text Display
2
Report follows the financial year; FY 2009-10 indicates April 2009-March 2010.
3
Text Ads are analyzed for the first time in this round of report. Earlier two rounds of reports covered only Display
advertisement.
Page | 6
DISPLAY ADS
Total Display advertising market of India in year 2009-10 is estimated at Rs. 417 crores and is
expected to grow by 28% to reach Rs. 534 crores in year 2010-11. Relatively new advertisers
such as FMCG and Education sector are spending more on Display ads than Text ads.
Travel, BFSI, auto & Telecom continue to remain biggest display ad spenders in year 2009-10
and will remain so for year 2010-11 as well. Advertiser proportion for Display ads is likely to
remain more or less similar for year FY 2011.
Display Ads 2009-10 Display Ads 2010-11 (E)
Electronic Electronic Print

Print Media Media Media
Media 2%
Education Education 6% 1%
5% Travel Travel
6% 7%
14% 13%
FMCG FMCG
6% 7% BFSI
BFSI IT 12%
IT 8%
13%
8%
Consumer
Consumer Telecom
Durables
Durables Telecom 13%
9%
8% 12%
Others
Others 4%
8% Auto Auto
Online
Publishers 9% Online 12%
9% Publishers
8%
A sample display/banner ad can be seen below –
Banner ads can range from being

simple pieces of HTML code, to
being multimedia objects
developed using technologies like
Java, Shockwave and Flash and
also having video, sound and
animation to maximize
effectiveness.
Page | 7
TEXT ADS
Total Text advertising market of India in year 2009-10 is estimated at Rs. 368 crores and is
expected to grow by 25% to reach Rs. 459 crores in year 2010-11. BFSI, Travel and Online
Publishers - the top three Text advertisers of year FY 10 are expected to continue to lead text
based advertisers in FY11 as well.
Text Ads 2009-10 Text Ads 2010-11 (E)

Consumer Electronic
Consumer Durables Print
Electronic Media
Durables FMCG 3% Media
FMCG Media 1%
3% 4% 1%
3% 2% Print Media
Education 2% Education
4% 4%
Auto BFSI
Auto
5% BFSI 24%
6%
Others 24%
Others
6%
4%
Telecom
Telecom
6%
7%
IT Travel
IT Travel 20%
20% 10%
9%
Online Online
Publishers Publishers
16% 16%
A sample text ad is seen below –
Page | 8
INTERNET USERS IN INDIA
Internet in India has significantly grown in the past decade. According to I-Cube, IMRB’s annual
syndicated study on Internet in India, in September 2009, India had 52 Million active internet
users.
Internet Users in India

Figures in Mn
Source: ICube 2009
72 87 95
62
53 59
42
31 63 71
16 42 50
32
5 12 16
2 9
4 8 11 21 29 36 46 52
PC Literate
2000 Claimed
2001 2003 Active
2004 2006 2007 2008 Mar-09 Sep-09
It was estimated that in the year 2007-08, Ad monetization per internet user on display ads was
Rs. 50 (USD 1.2) which increased to Rs. 65 per Internet user in year 2008-09.
In year 2009-10, Display ad industry is estimated to be Rs. 417 crores and Text ads is Rs. 368
crores; hence online Ad monetization4 per internet user for India in the year 2009-10 is Rs. 58
for Display ads and Rs. 52 for Text Ads.
This indicates that online ad monetization per internet user has not grown significantly in year
2009-10 as compared with previous year.
4
Ad Monetization per internet user is estimated based on total industry size per claimed internet user as on
September 2009
Page | 9
INDUSTRY TRENDS
This section gives detailed view about various advertiser segments.
BFSI
BFSI sector has been one of the long standing advertisers on Internet. BFSI verticals covers all
advertisers from financial companies including Banks, Non Banking Financial companies,
Insurance companies, Asset Management Companies, Credit rating agencies and so on.
This sector contributes most towards Text as well as Display ads. However during the economic
slowdown, it was the most affected as well, and it reflected in their online ad spent.
As an advertiser, BFSI has evolved from a display advertiser to a performance based advertiser.
It is one of the first advertisers to adopt performance based advertisements and performance
based payment mechanism (such as pay per activations). It is estimated that BFSI will continue
to have display ads but is likely to have more of Performance based and Text advertisements in
future.
In FY 2010 (Apr’09-Mar’10) BFSI contributed around Rs. 89 crores towards Text5 and Rs. 52
crores towards Display ads. This totals to Rs. 141 crores for year FY10 and is estimated to grow
to Rs. 177 crores in year FY11. Effect of economic slowdown is reflected in ad spent by BFSI
segment. Display ad spent for FY09 was down to Rs. 52 crores from Rs. 55 crores for the year
earlier.
BFSI - Online Spends

120
100 113
80 89
60
59 64
40 55 52
20
0
FY 2008 FY 2009 FY 2010 FY 2011(E)
Text (INR Crores) Display (INR Crores)
5
advertisement.
Page | 10
AUTO
Auto industry is another big contributor to online ads. The industry is primarily uses display
advertising. Hit by the economic slowdown, auto industry’s online ad spend didn’t grow much
during FY08 and FY09. However, with economy back on track, it is expected that this segment
will continue to remain one of the biggest online advertisers.
Auto vertical covers all advertisers from the automotive sector including OEM manufacturers,
cars and passenger vehicle manufacturers, tyre manufacturers etc.
Auto-Online Spends
70
60
62
50
40
30 39
20 29 28
24
10 17
0
FY 2008 FY 2009 FY 2010 FY 2011(E)
Display advertising for the Auto industry has risen from Rs. 24 crores in FY08 to the current
level of Rs. 39 crores for FY10. This is expected to reach Rs. 62 crores for FY 2011. In other
words, the there has been a growth of 63% over a period of 2 years. It is estimated that the
Auto industry spent Rs. 17 crores on Text6 ads in FY10 which is expected to grow by 65% and
reach Rs. 28 crores for FY11,.
6
advertisement.
Page | 11
TRAVEL
Travel7 industry is another big online advertiser.

Added as separate advertiser segment this year, it Travel-Online Spends
100
is estimated that its Display ad spend for the year 90
FY10 was Rs. 59 crores and is expected to grow by 80 90
70
14% to Rs. 67 crores for the year FY11. Text8 ad 60 74
67
spent on other side, is expected to grow from Rs. 50 59
40
74 crores in FY 10 to Rs. 90 crores in FY 11. 30
20
10
Like BFSI and Auto advertisers, Travel is one of
0
the evolved online advertisers, which is gradually FY 2010 FY 2011(E)
moving from display to performance based Text (INR Crores) Display (INR Crores)
advertising.
ONLINE PUBLISHERS
Online advertising for publishers is defined as all

Online Publishers-Online Spends
advertising emerging from various websites 90
related to gaming, email, portals, matrimony, 80
85
job space etc. 70
60
72
9 59 58
Advertising spend of online publishers from this 50
40
round does not include ad spend by Travel and 40
30 37
tourism portals as it is now analyzed as separate 20
advertiser segment. During FY10 online 10
0
publishers are estimated to have spent Rs. 37
FY 2008 FY 2009 FY 2010 FY 2011(E)
crores towards display and Rs. 58 crores
towards Text ads which adds up to Rs. 95 crores.
This spend is expected to grow to Rs. 122 crores (Display Rs. 40 crores and Text Rs. 72 crores) in
FY11 i.e. a 28% increase.
7
Travel segment is analyzed as separate advertiser for this first time in this round of report. In earlier rounds it was
categorized under Online Publisher segment
8
advertisement.
9
Advertising spends of Online publishers till previous round of report (FY 09) also includes Travel publishers.
Page | 12
IT- INFORMATION TECHNOLOGY
Information technology10 is includes all those products and services for computing platforms
including packages / customized software and services, PCs, laptops, servers, PC accessories,
broadband, data cards and Internet services.
Information Technology-Online Spends

50
40 46
42
30
33 33
20
10
0
FY 2010 FY 2011(E)
TELECOM
Telecom-Online Spends
11 80
Telecommunications is one of the
70
biggest display advertisers. Broadly 60 71
speaking, telecom related products and 50
40 51
services include Pre Paid cards, mobile 30
services, landline services, mobile 20 31
10 23
phones, PDAs etc.
0
FY 2010 FY 2011(E)
10
IT as advertiser segment is analyzed separately for the first time in this round of report. Till last round it was
clubbed with Telecom and it was together called as IT / Telecom.
11
Telecommunications (Telecom) as advertiser segment is analyzed separately for the first time in this round of
report. Till last round it was clubbed with Telecom and it was together called as IT / Telecom.
Page | 13
FMCG
FMCG, one of the biggest advertisers on FMCG-Online Spend

45
Television, is so far one of the lowest spenders on 40
the Internet. However, slowly, this industry 35 39
30
vertical has started realizing importance of 25
Internet as an advertising medium and leading 20 26
15
FMCG companies have started advertising online. 10 17
13
This new entrant is expected to spend about Rs. 5
0
17 crores on Text12 & Rs. 39 crores on display FY 2010 FY 2011(E)
advertising in year 2010-11. Text (INR Crores) Display (INR Crores)
For our analysis, the FMCG is includes advertisers from consumer goods such as soaps,
detergents, powder, cosmetics, personal care, beverages, processed food, edible oil etc. Being
new entrant in online media, FMCG is likely to remain mainly as a Display advertiser in current
year, as well as in near future.
CONSUMER DURABLES
All consumer durable items like Air

Consumer Durables-Online Spends
Conditioners, Refrigerators, TV, Audio systems 60
and excluding IT and Mobile products are 50
categorized as Consumer durables in our 40 48
analysis. This category is also mainly a display 30
34
advertiser. During year FY10, Consumer 20
26
durable advertisers are estimated to have 10 19
10 15
spent Rs. 34 crores on Display which is almost
0
double the amount they spent in FY08 and Rs. FY 2008 FY 2009 FY 2010 FY 2011(E)
10 crores on Text13 ads. The ad spends of Text (INR Crores) Display (INR Crores)
display ads have been growing steadily over
the years, and are pegged to touch Rs. 48 crores by the year 2011.
12
advertisement.
13
advertisement.
Page | 14
EDUCATION
Education sector is one of the fastest growing

advertisers on Internet. This segment has seen Education-Online Spend
40
growth of more than 200% in ad spent from 35
FY08 to FY10. 30 35
25
Predominantly a display advertiser, Education 20 25
vertical includes all education related ads such 15 20 18
10
16
as those by Educational institutes, coaching 5 10
classes, schools, colleges and universities etc. 0
It is estimated that the segment will spend Rs. FY 2008 FY 2009 FY 2010 FY 2011(E)
35 crores towards Display and Rs. 18 crores in Text (INR Crores) Display (INR Crores)
Text ads in FY 2011.
Page | 15
ONLINE MARKETING ACTIVITIES
Social media marketing has been on the

rise, as one of the prime online marketing Online Marketing
100%
activities among online advertisers. It is 90%
observed that email marketing is done by 80%
Other (Banner,
companies with the help of their internal 70%
SEO, SEM)
60% 82% 77%
databases. Spending on email marketing
50% Social Media
campaigns is not as common, as compared 40% Mktg
with spending on Social Media marketing. 30%
20%
54% growth Email Mktg
Other conventional Online marketing 11% 17%
10%
activities such as SEO, SEM Advertising are 0% 7% 6%
still the most common forms of online 2009-10 2010-11(E)
marketing among advertisers.
ADVERTISING ON SOCIAL NETWORKING
Social networking sites (SNS) have gained large user base in the past two to three years. Large
number of advertisers are now moving towards SNS for their marketing activities. These could
be branding activities like “Follow the Company” on a social networking site or it could be
advertising on the same. It is estimated that about 11% of total online advertising was done on
social networking sites in year 2009-10 and is expected to grow to 18% in year 2010-11.
Page | 16
ONLINE ADVERTISING VIEWED BY INTERNET USERS
80% 69%
70%
Ad Conversion 60%
74% 53% 54%
60% 50% 50%
50% 37%
40% 51% 62% 51% 26%
46% 46%
30% 38%
37%
20% 28% 25% 23% 24%9%
10% 19% 13%3%
0%
Sponsored Email ads Sponsored Flash Banner ads Pop-ups Streaming Viral
links in links in other Animations / Videos Marketing
search websites Flash Videos Ads
engines Seen Clicked Click to Seen ratio
From the above data, it can be seen that around two thirds of the active Internet users have
seen sponsored ads and about half have clicked on them. On the other hand, Viral Marketing
Ads have the minimum viewership and are the least clicked.
Thus, sponsored links in search engines have the highest Conversion ratio from Seen to Click
followed by Streaming Videos. On the other hand, Pop-Ups have a very low Clicked to seen
ratio. The main reason for that is that people while surfing do not prefer unwanted intrusion.
They treat the web space as their personal and any attempt to interfere in that space does not
go down well with the people. But the sponsored links in search engines always display
advertisements relevant to the search made by the people. Hence the propensity of clicking
those ads increases.
Also, Viral Ads, although known to create a lot of buzz have the least seen to clicked ratio. They
are mostly seen as a novel and creative video/ad rather than an ad. The attention span is very
low for these ads and do not result into click conversions.
Ad Types like to see

38%
40% 29% Like to see Like to see most
30% 30%
18% 19%
20% 20% 11% 12%
11% 11% 6%
10% 7% 6% 2%
3% 1%
0%
Sponsored Email ads Banner ads Flash Pop-ups Sponsored Streaming Viral
links in Animations / links in other Videos Marketing
search Flash Videos websites Ads
engines
Page | 17
The right type of ads have the best seen to click conversion ratio. And it is the placement of the
ads which have the highest impact. Customers get most influenced by ads that are relevant to
the context that they are looking for on the Internet. It is only those ads which are noticed the
most and thus have the highest visibility.
Sponsored links in search engines have the highest demand followed by Email Ads. This is
because the ads are relevant to the other contents on the web page. Streaming Videos have a
low viewership demand because they usually do not have any relevancy to the content of the
web page. So do the Viral Ads, which are seen more as an entertaining video rather than an ad.
A majority feel that online ads are informative and interesting but click them only when they
are relevant. This is because online ads are often intrusive and distracting. Thus care should be
taken while deciding the placement of the ad. These ads also help users find the right products
they are looking for and to some extent, influence their buying decision.
Page | 18
CHALLENGES
In India, online advertising faces some challenges before it can achieve its potential. One of the
reasons commonly cited by many, is the reluctance of advertisers to spend heavily in a medium
whose ‘Reach’ has yet to reach a significant level of the total population. ‘Reach’ signifies
number of unique visitors exposed to a given medium. As per ICube 2009, with 78 million
claimed Internet users, ‘Reach’ of Internet users in India is approximately only 8%. In addition,
unavailability of proper infrastructure in rural areas for Internet facilities is another major
concern for advertisers, and progress in terms of Internet penetration is by far, limited. On the
other hand, Television has reached the masses and advertisers are easily able to reach their
target audience quickly, albeit at a much higher cost.
Existing online advertisers are especially keen to understand the return on investment for a
given online investment. Clients are looking beyond pageviews, page clicks and other existing
metrics as CPC, CPI, CPA etc. in other words, a major challenge that web publishers face, is their
ability to convince why an advertiser must advertise on the publisher’s website (and not on any
other). Along similar lines, many feel that very few companies are talking about brand metrics,
accurate targeting as well as quality and type of audience.
Also, existing online advertisers face another challenge with regards to sustaining the interest
level of an online advertising campaign. In fact, some advertisers have launched successful
online campaigns to begin with, but have been unable to sustain interest level for an extended
period of time.
Besides these challenges, traditional high spenders in advertising like FMCG companies have
not invested any significant money in online advertising. Building appropriately tailored
solutions for companies from the FMCG sector, will be critical for publishers to attract more
advertisers and help growth of the online advertising industry.
Also, advertisers seem to lack knowledge about the online medium and how it could be
leveraged effectively. As per some, the online medium evolves so fast that before some
measurement standard can be set, some other measure becomes the norm and replaces the
earlier standard. Essentially, many feel that measurement will play a key role for online
advertising medium to succeed. A common currency would be required by both advertiser and
publisher to use the medium effectively.
Page | 19
FUTURE OF ONLINE ADVERTISING IN INDIA
With Internet penetration ever increasing, future of online advertising is promising. Broadly
speaking, following key drivers will enable growth of this medium – Rising broadband
penetration, emergence of social media and video ads, increased investments by various
companies as well as positive macroeconomic situation in India.
Increased
Type of Ad - Positive Investments by
Future
Video Ads Advertisers
Rising Macroeconomic
(FMCG,
of
Broadband Situation
Social Media - Automotive, BFSI Online
Penetration in , Travel among
Engagement of
End Users India various other
Advertising
industries)
Emergence of High Speed Broadband connectivity is a prime driver for online advertising to
increase. Traditionally, we have observed online text advertisements or display advertisements
(without much animation). However, with rising broadband penetration, advertisers can target
end users with video ads, which are similar to television advertisements. Moreover, the cost of
hosting a video ad on the Internet is significantly lower than that of a television advertisement.
Besides, the cost of broadband plans has been decreasing consistently and is becoming
affordable for an increasing number of Internet users.
With rising broadband availability, video ads or ads that require additional bandwidth will be
more commonly seen. These are comparable with television advertisements, albeit at much
lower advertising costs. Also, with a plethora of small and medium businesses mushrooming in
India, companies will utilize online advertising in a much larger way, rather than relying on
traditional forms of advertising, which might not be cost effective either.
Page | 20
Social Media has captured the imagination of over 500 million people globally. In fact, India
has also seen rise in number of Internet users, thanks to social media itself. Online advertising
has therefore been positively influenced by social media. Also, with people pressed for time,
they spend more time on social media to interact with friends, colleagues and relatives. In fact,
as per IMRB International’s web audience measurement product WAM, across India, the time
spent on social media is second only to that spent over email. Various social media applications
like gaming, friend updates, chat etc have been instrumental in users spending a great deal of
time on social media websites.
Additionally, with social media, companies are able to create buzz about their products and
services. People can interact with the brand and get a feel of the product or service on offer.
In addition, people can get immediate answers for their questions in real time, either through
brand owners themselves or even through end users who have experienced the brand, either
positively or negatively. With this in mind, advertisers are now gradually awakening to the
opportunity presented by social media. Effective engagement with consumers is the need of
the hour for many organizations. The Internet will enable this and moreover, at significantly
lower costs.
Increased investments from the FMCG sector will be another important driver for increased
online advertising expenditure. FMCG companies are traditionally huge spenders as far as
marketing and advertising of products are concerned. Currently, Indian FMCG companies spend
a majority of their advertising budgets on traditional advertising media i.e. television and print
advertisements. However, with emergence of social media, it is likely that FMCG advertisers will
be keen to exploit the online advertising medium.
As per ICube 2009 (Annual syndicated study by IMRB International on Internet users), the
number of claimed Internet users has risen to 78 million across India. Therefore, with ever
increasing number of Internet users, FMCG advertisers have now realized that it is merely not
enough to advertise on television or print only. While television and print ads can increase
awareness of a certain product in a very quick manner, these media are unable to engage the
consumers actively. In addition, television as well as print advertising involves sizeable costs
which smaller organizations might not be able to sustain. Internet on the other hand, enables
immediate interaction with end users and helps bridging this gap in a very cost effective
manner.
Page | 21
Companies from the BFSI, Automotive and Travel sectors have been early adopters of online
advertising. Having tried and tested various advertising models as pay per click, pay per
pageview and so on, companies belonging to these industries are now keen on performance
based advertisements, where they would pay publishers for the sales generated or at least
sales enquiries for a given product or service.
Internet would become an extremely important Sales medium, while television and print
media would be used for increasing awareness primarily. Companies would use television, print
and billboards for creating buzz about their brands, products and services. Internet, on the
other hand, will enable one to know intricate details, features, and specifications of the
product/service. Further to interact with customers, Internet can play a pivotal role by engaging
and helping customers know benefits of the companies’ products or services, as well as
advantage or disadvantages, if any.
In addition, Internet as a medium is progressively targeting required end users in an effective

manner. In other words, online advertisements have evolved to a certain extent, whereby they
can be placed on strategic websites to attract desired target group.
•Creating Buzz
Television, Print, • Increasing Awareness
Billboards
Advertising • Brand Building
Effective
Spend of
Advertising
• Enable In Depth Understanding of the Product / Service
• Brand Building by Engaging End Users through Social Budget
Online Advertising Media
• Building Emotional Connect with End Users
• Lead to Sales
In sum, with a rising Indian Internet user base as well as the advantages that online advertising
offers, it will be increasingly difficult for advertisers to neglect the Internet as an advertising
medium. In addition, it is becoming very important for advertisers to build an emotional
connect with consumers. Internet would go a long way in enabling this bond, which bodes well
for the online advertising industry as a whole.
Overall, with the macroeconomic situation in India also upbeat, Indian companies as well as
multinational companies (MNCs) are likely to spend more on their marketing and advertising
budgets. This certainly will trickle down to the online advertising spends of various companies.
Page | 22
About IMRB International and IAMAI
e-Tech Group | IMRB International (a specialist unit of IMRB International) is a research based
consultancy offering insights into IT, Internet, Telecom & emerging technology space.
Our continuous link with industry and a constant eye on the pulse of the consumer ensures that we can
decode the movements of technology markets & consumers. To our clients we offer an understanding
of the present market environment and a roadmap for the future.
Contact Details Research Team for this Report

eTech Group | IMRB
Balendu Shrivastava, Group Business Director
IMRB International
(balendu.shrivastava@imrbint.com)
‘A’ Wing, Mhatre Pen Building
Senapati Bapat Marg, Mumbai
Tarun Abhichandani, Insights Director
www.imrbint.com Ashwin Godbole, Insights Director
About Internet and Mobile Association of India (IAMAI)

The Internet & Mobile Association of India (IAMAI) is a not-for-profit industry body registered under the
Societies Act, 1896. Its mandate is to expand and enhance the online and mobile value added services
sectors. It is dedicated to presenting a unified voice of the businesses it represents to the government,
investors, consumers and other stakeholders. The association addresses the issues, concerns and
challenges of the Internet and Mobile economy and takes a leading role in its development. The
association’s activities include promoting the inherent strengths of the digital economy, evaluating and
recommending standards and practices to the industry, conducting research, creating platforms for its
members, communicating on behalf of the industry and creating a favorable business environment for
the industry. Founded in January 2004 by leading portals in India, IAMAI in the only specialized industry
body in India representing the interests of online and mobile value added services industry.
Contact Details
Dr. Subho Ray, President, IAMAI

406, Ready Money Terrace, 167, Dr Annie Besant Road, Mumbai - 400 018
Tel: +91-22-24954574 | Fax: +91-22-24935945 | http://www.iamai.in
Published By:
Dr Subho Ray, President, on behalf of Internet and Mobile Association of India
406 Ready Money Terrace, 167, Dr Annie Besant Road, Worli Mumbai 400018.
Page | 23

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REPORT ON

ONLINE ADVERTISEMENTS: 2010

Online Advertising ........................................................................................................ 5

Evolution Model ...................................................................................................................... 5

Market Size .................................................................................................................... 6

Display Ads ............................................................................................................................. 7

Text Ads ................................................................................................................................. 8

Industry Trends ......................................................................................................................10

Online Marketing Activities .....................................................................................................16

Online Advertising viewed by Internet Users ........................................................... 17

Future Of Online Advertising In India ........................................................................ 20

Additions in this round of report:

Online Advertising is a form of marketing communication on the Internet, intended to persuade

Online advertising can be classified in two types

Text Ads - Advertisements made up of text (displayed largely as sponsored links on

• Fundamental • Used most by •A step • Advertiser

Online Ads Market Size

540 417 459

Display Ads 2009-10 Display Ads 2010-11 (E)

Electronic Electronic Print

A sample display/banner ad can be seen below –

Banner ads can range from being

Text Ads 2009-10 Text Ads 2010-11 (E)

A sample text ad is seen below –

Internet Users in India

This section gives detailed view about various advertiser segments.

BFSI - Online Spends

Text (INR Crores) Display (INR Crores)

Travel7 industry is another big online advertiser.

Online advertising for publishers is defined as all

Information Technology-Online Spends

FMCG, one of the biggest advertisers on FMCG-Online Spend

All consumer durable items like Air

Education sector is one of the fastest growing

Social media marketing has been on the

ADVERTISING ON SOCIAL NETWORKING

Ad Types like to see

In addition, Internet as a medium is progressively targeting required end users in an effective

About IMRB International and IAMAI

Contact Details Research Team for this Report

About Internet and Mobile Association of India (IAMAI)

Dr. Subho Ray, President, IAMAI

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