According to a report on Digital Advertising in India by IMRB International (formerly Indian Market Research Bureau) and IMAI (Internet and Mobile Association of India), the online advertising market in India is increasing at yearly growth rate of 30%. It was pegged at Rs. 2,750 crores for 2014, and if the current trend continues then it will be worth Rs. 3,575 crores by the end of March, 2015.
The online advertising market has been growing at a rapid rate in India. It was grown from Rs. 1,140 crores in 2010-11 to Rs. 2,260 crores in 2011-12 and to Rs. 2,750 crores in 2013-14.
Currently Search and Display ads contribute to the maximum portion of the digital advertising spends in India. Search and Display ads alone make up 38% and 29% of the total online advertising spends. The advertising spends on the social media contribute to 13% of Rs. 2,750 crores digital ad market in India, currently.
The spending on Search ads is reduced to 30% by the end of financial year in March, 2014. It is estimated that the spending on the search ads will go down even more in future and will increase for video, email and mobile ads.
Spending on video advertisements is expected to witness highest grow with a CAGR (Compound Annual Growth Rate) of 56% by 2015, and make up 12% of the digital ad market share. Better internet speeds are the primary reason why Video ads are witnessing higher growth than others.
The report also mentions that the advertisement spending for mobile devices and social media is growing at a CAGR of 43% and 41% year-over-year. The spending on social media ads touched Rs. 440 crores and that on mobile devices reached Rs. 385 crores in March, 2014.
The spends on video and email advertisements grew at a healthy CAGR of 51% and 16% touching Rs. 303 crores and Rs. 88 crores respectively.
Growth in Various Verticals
Growth of Ecommerce has been boon for digital advertising Industry. Given the cut throat competition in this space, E-Commerce players are spending big (which is possible due to large VC funding this sector is attracting)
Out of overall spend of Rs. 2750 crore, e-Commerce alone accounts for 495 crore. The same figure for last year was 113 crore – so e-commerce spends have increase more than 4 times in last 12 months.
The spends in Telecom sector are also quite high at 413 crore which account for over 15% of total online ad spending. Again, cut-throat competition among various telecom operators is the major reason why this sector is seeing big spending on online ads.
The spends in FMCG and Consumer durables has more or less remained constant and accounts for around 14 percent of total amount.
The top 3 verticals (E-Commerce, Telecom and FMCG ) in all account for nearly 47 percent of total online ad spends in India.