Indian online ad spend to jump 54% this year: IAMAI

The Indian online advertising market, including classifieds, will grow by a whopping 54% in the next 12 months, a report by the Internet and Mobile Association of India (IAMAI) and IMRB said.

As of March 2012, the industry was worth Rs 2,851 crores in annual revenue and will further grow to Rs 4,391 crores by March 2013, the IAMAI, which represents the online and VAS players in India, said.

IAMAI, however, includes online classifieds in its online ad market estimates. Online classifieds are sometimes not included in the definition of online ad market. India has a large online matrimonial ad segment.

Excluding online classifieds, online advertising in India was worth about Rs 1,250 crore last month and will grow about 25% to Rs 1,561 in the next 12 months.

Mobile advertising will grow from 105 crore to Rs 144 crore during the same period (all numbers annualized.)

Interestingly, the display market continues to be slightly ahead of the search market in India, contributing about 55-60% of the total ‘pure’ online ad market. The ratio will remain very similar even after a year, it predicted.

Worldwide, analysts have been pointing to a sharper rise in search advertising compared to that of display.

“Travel and banking and financial sector continued to be the main spenders as far as display ads are concerned. The display ad spend by automotive companies has appreciably increased. Its overall share has risen from 9% in FY2010 to 13% in FY2011 to 14% in FY2012,” the report said (see chart.)

In terms of size, the online advertising market in India is about 11% the size of the conventional or traditional media ad market, the annual survey said.

Online advertising has been growing in India, even in the recent economic downturn. “On an average, the digital ad spends have been growing at 25% year-on-year basis,” IAMAI said (see chart.)