2. EXECUTIVE SUMMARY
India offers huge business potential for online advertising industry with rising population,
growing income level and changing lifestyle. With increasing number of educated people and
migration to urban areas, increase adoption in internet and online advertising is being
witnessed. Despite the growth, many challenges continue to plague the industry such as
underdeveloped infrastructure and lack of faith of both advertisers and audiences.
Online advertising is developing rapidly in the country but decline in advertising revenues have
been noticed during 2009 due to the global economic slowdown. However, in 2010, a recovery
in advertising spend was witnessed, due to an improvement in market sentiments. Moreover,
sectors like finance, IT and education, which are the largest contributors to online advertising,
reduced their advertising budget during 2009 and from the second quarter of 2010 onwards
again started increasing their advertising spending. In 2010, online advertising surpassed
growth rate of other advertising formats like TV, print and radio. The factors that helped the
industry growth were, increase in internet penetration, e-commerce, social networking and
population growth.
Among the various online ad categories, display advertising has always been the leading
segment. Sectors such as travel, Banking, Financial Services and Insurance (BFSI), telecom,
auto and online publishers dominated the display advertising segment. Sector wise, text
advertising is dominated by BFSI, followed by travel and online publishers. Mobile advertising
is a relatively new concept in India and it includes banners, text, click to call, click to SMS, in-
game among others. With increasing demand for smart phones and 3G networks, mobile
internet data usage is expected to be the growth driver, thereby leading to growth in mobile
advertising. The role of social media is also rising due to growing internet access and also on
account of social media becoming a standard element of web use.
Growth and new business opportunities exists for the online advertising industry in India, due
to a large youth population, popularity of social networking sites, growing e-commerce trade,
increase in educated population and broadband connectivity, as well as decreasing internet and
telecom costs. Moreover, entry of foreign e-commerce companies is also expected to drive the
market for online advertising. Mobile advertising is also predicted to grow with the popularity
of 3G services, which was recently introduced in the market, thereby driving the demand for
online advertising services.
The report on “India Online Advertising Industry Growth and Forecast 2016” includes a
detailed study of the Indian online advertising industry. We have also analyzed the industry
and its various categories/ segments and trends prevailing in the market. The report also
includes the industry, present performance and forecast of its various segments. Additionally,
we have discussed cause and effect relationship of macroeconomic and industry factors on the
industry providing the basis for the future outlook.
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3. TABLE OF CONTENT
1. The Indian Online Advertising Market
1.1. An Overview
1.2. Value Chain Analysis
1.3. Market Size
1.3.1. Total Advertising Spending
1.3.2. Online Advertising Spending
2. Online Advertising By Category
2.1. Display Advertising
2.2. Online Text Advertising Market
2.3. Online Mobile Advertising
2.4. Online ad-spend break up by industry
2.4.1. Display Ad Spend by industry
3. Industry Trends
Importance of On-line Advertising by Demography
Role of FMCG in Online Advertising
Amazon in Indian Market
Advertising Regulation in India
Opportunities for Social media
Online ad networks in India
4. Major Driving Factors
Internet Users and broadband Penetration
Growth Driven by Rising Population
Literacy Rate
Growth of E-commerce
Cost Effectiveness
Increasing Userbase in Social Networking Sites
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4. 5. India Macro Economic Factors
5.1. GDP Growth Makes the Market Lucrative
5.2. Rising Per capita Income
5.3. Inflation
5.4. Population
6. Mergers & Acquisitions/Deals
7. Future Outlook of Indian Online Advertising Industry
Online Display Advertising
8. Appendix
8.1. Forecast Methodology
Data Collection Methods
Approach
Multi Factor Based Sensitivity Model
Targeting Methods
Final Conclusion
8.2. Definition
8.3. Abbreviations
8.4. Disclaimer
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5. LIST OF FIGURES
Figure 1: Online Advertising Value chain Analysis
Figure 2: Indian Advertising Expenditures by Media in 2010 (%)
Figure 3: India Online Advertising Spending (2006-2010)
Figure 4: Online Display Advertising Spending (2006-2010)
Figure 5: Online Ad Spend Per User (2008 & 2009)
Figure 6: Online Text Advertising Spending (2008-2010)
Figure 7: Online Mobile Advertising Spending (2008-2010)
Figure 8: Display Advertising break-up by Industry in 2010
Figure 9: Online Display Advertisement Popularity by Demography 2010
Figure 10: India Internet Users and Penetration (2006-2010)
Figure 11: Literacy Rate in India
Figure 12: E-commerce Market in India (2006-2010)
Figure 13: Facebook Users Segmentation by Age
Figure 14: India’s Gross Domestic Product (2006-2010)
Figure 15: India Annual Population (2006-2010)
Figure 16: Indian Online Advertising Spending Forecast (2010-2015)
Figure 17: Display Advertising Spending Forecast (2010-2015)
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6. LIST OF TABLES
Table 1: Text Advertising break-up by Industry in 2010
Table 2: Online Ad Networks by Funding
Table 3: Leading Online Activities
Table 4: India Broadband Penetration (2006-2010)
Table 5: Average CPM across Various Media
Table 6: India CPI Annual Inflation (%) (2006-2010)
Table 7: Mergers and Acquisitions (Jan 2010 - Mar 2011)
Table 8: Cause and Effect Relationship Analysis between Industry Factors and Expected
Online Advertising Market Prospects
Table 9: Cause and Effect Relationship Analysis between Macro-Economic Factors and
Expected Online Advertising Market Prospects
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