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| Most global internet advertisers yet to set shop in India |
| Pradipta Mukherjee / Kolkata Sep 11, 2009, 17:39 IST |
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Despite shift to online ads here, sector’s growth lags world trend
Only 14 of the 50 largest internet advertisers have either direct operations in India or operate here through partnerships, according to a TNS Media Intelligence study.
The research was done on the top internet advertisers by media value. Which, according to TNS, takes into account the value of display advertising in both standard and non-standard ad formats using the cost per impression or CPM-based methodology. Media expenditure estimates, argue TNS Media researchers, do not always take into account special considerations like publisher discounts, barter agreements, co-sponsorship and affiliate relationships.
The big names yet to set shop in India include Scottrade, TD Ameritrade Brokerage, Sprint, E-Trade, Nascar and Netflix. This trend, note analysts, indicates that the online advertising sector in India has a long way to go before it catches up with global market growth figures.
Globally, marketshare has largely been shifting from traditional media to the internet, which is expected to garner 15.2 per cent of global ad spending by 2011 —it was 2.7 per cent in 2001. And though the Rs 21,000-crore Indian media and advertising sector had its first bout of negative growth during the first six months of 2009, internet advertising itself grew in India during the period by 16 per cent.
Moreover, with broadband users accounting for many home internet connections, consumers are spending more time online. The internet now accounts for approximately 10-25 per cent of all media and news consumption. And within certain demographics, the internet provides a satisfactory return-on-investment (ROI). Analyst reports say the average 21-35-year-old spends over 50 hours a month on the web. Yet, it is still to find favour with the largest online advertisers.
Amitava Sinha, executive vice-president, Rediffusion Y&R, said: “We would have expected at least 25 out of 50 top online advertisers to have operations in India. The fact that it is less than half (14 on 50, as stated at the outset) means India needs to have more favourable conditions and regulations for corporates and the largest advertisers to set up shop here.”
Madison Media chairman, Sam Balsara, says the advertising industry is still coming out of the shadow of the global slowdown, due to which spending has declined. He also cites this as a reason for internet advertising being in its infancy. But, believes the tide is shifting. “In the April-June quarter, the latest IIP data came as the biggest surprise, clipping at a stupendous 7.8 per cent in June. It leads us to believe the next six months are going to be much better than the first six months.”
Many advertising executives and analysts agree the worst is over. But there is little agreement on the strength, timing and distribution of any recovery. Some analysts argue that traditional media will never regain ad spending lost during the recession, as advertisers shift to other outlets, like the internet, cable and satellite television channels.
Consultants at PricewaterhouseCoopers say they think the gap between advertising and other forms of revenue will persist, adding that global ad spending will remain below 2008 levels even four years from now.
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