Led by a strong 35% surge in the demand for search-based advertisements, Google India has bagged over Rs 600 crore or 55% of the Indian online advertising market which crossed Rs 1,100 crore in 2010. Last year, the online ad revenue registered a 25% jump over 2009, experts said.
Following Google India are a clutch of leading online brands which generated advertising revenue worth Rs 480-500 crore capitalising on the traditional display and banner ads coupled with some search ads. These include Yahoo India, Rediff.com, Indiatimes, Web18, and Hotmail among others.
Online medium now commands 13% share of the revenue generated by the print media. In 2011, online medium is set to generate a 40% jump in the ad revenue so as to reach Rs 1,500 crore. Both search and display ads will dominate the marketers, experts said.
This comes on the back of online ad spends ($26 billion) overtaking the print ad spends ($23 billion) in the US in 2010.
While none of the leading online brands were keen to disclose their revenue, Google India conceded that its revenues have been growing at a very fast pace in its last few years of India operations. It also said that not just the search-based ads, but the display advertising spend among Google?s largest 1,000 advertisers increased 75% in the past year and the number of transactions that occur every day tripled.
?Our online revenues have been increasing over the past few years. While the online advertising was based on the pay for performance model till some time ago, now it is used for brand building. In fact, traditional marketing companies are also adopting online marketing strategies,? said Nikhil Rungta, country marketing manager, Google India.
But what is driving the growth in the online space? Experts said online medium when used for search-based ads, gives a more quantifiable deliverable for advertisers.
Agrees Sandeep Amar, head of marketing, audience and pre-sales at the Times Internet. ?The pressure for ads to perform is driving the revenue where search ads play a crucial role. Advertisers have a strong intent of going beyond ‘clicks’ which the display ads offer. And of course, the online traffic has grown very strongly. These reasons together will help us cross Rs 1,500 crore revenue mark in 2011-12,? Amar told FE.
However, India still remains dominated by the television and print medium which together generate over Rs 22,000 crore in advertising revenue. ?It will take several years to reach a stage where the United States is today. Last year, the online spends by advertisers exceeded compared to what the print medium generated,? says an analyst who tracks media.
According to US-based EMarketer, the online ad spends in America grew by around 14% in 2010 to reach $25.8 billion while spending on print newspaper ads witnessed around 8% drop to settle at $22.78 billion.