For advertisers looking to promote their product or service, as well as website publishers looking to monetise their web traffic, one of the best resources available are ad networks. Ad networks are not new to India, with the likes of Komli Media and Tyroo already present. However, it was only in 2008 that saw the rapid rise of this medium with Ibibo launching its own ad network, Adwinks; Interactive Avenues launching Ad Magnet; and Capital18-funded WebChutney launching an ad network company called Networkplay.
However, this growth is still not significantly big enough as compared to say the US, where the market is huge with approximately 300-plus networks. Ad networks play a key role for all the constituencies in the business, namely publishers, advertisers and media planners. exchange4media speaks to some industry players on the role of these ad networks and the steps being undertaken for further growth in this space.
According to Rammohan Sunderam, Founder and MD, Networkplay.in, Indian display advertising ad market would be around Rs 325-350 crore or so in 2008-09, while ad networks would be around 8-10 per cent of this market, that is, around Rs 30-35 crore, which would be largely performance driven. This number is expected to go up to around Rs 150 crore by 2011 if the Internet advertising market touches Rs 1,000 crore.
Role of ad networks
Ratish Nair, Co-Founder, Ad Magnet, explained, “Ad networks help publishers by selling their unsold or remnant inventory, thereby contributing to higher revenues as well as getting a potentially high share of the advertisers’ budget, especially in the case of large advertisers. In fact, 100 per cent of the inventory gets filled up because of ad networks.”
He continued, “It helps advertisers by providing ‘higher reach at lower costs’ and also provide ‘performance based deals’. Ad networks are open to working on achieving the advertisers’ ROI objectives much more transparently than most other entities and helps media planners by helping them reach out to a large number of sites, which might otherwise have been a logistical nightmare.”
Alok Kejriwal, Founder and CEO, Games2win, noted, “Ad networks play an important role of being able to monetise traffic of a publisher or an entrepreneur who is very good at content creation. Publishers who have large inventory can negotiate special terms with ad networks, however, it all depends on what position you are and what kind of inventory you have to sell.”
Networkplay.in’s Rammohan Sundaram observed, “Online ad network space in India is very nascent from all aspects, whether it is the size, maturity, dominance of a player, coverage in terms of trade penetration or in terms of benefit on yields for a publisher, and all of this, I believe, is due to the supply and demand mismatch. It’s the easiest thing to aggregate volumes on supply and not do justice to any party concerned due to lack of demand.”
He further said, “This worsens when the same offerings are given by multiple networks to same planners in the trade and then confusion reigns supreme with fights on who owns what post, and it is the sales guys’ relationship that clinches the deal. This, to me, is disastrous in the long run. We have known instances where agencies call publishers directly and buy media, these are extended media buying organisations, who call themselves ad networks.”
Amar Goel, CEO, Komli Media, said, “Ad networks play an increasingly important role, and although different advertisers have different goals and objectives, the ad networks help advertisers simplify their lives. Networks also play an important role in helping marketers target their audiences.”
How mature are the ad networks?
Ad networks in India are said to be growing at a faster space, and in a few years from now, are all set to become mainline Internet vehicles, thereby commanding a fairly significant portion of the Internet advertising pie.
According to Sunderam, “The ad networks are yet to mature in India. There are two aspects of the business – one, that is performance driven, and the other, that is brand driven. In the performance space, most advertisers feel that since they spend such large budgets on Internet advertising, they automatically get a rub-off that translates into branding, and the other, where it is pure play branding for categories such as FMCG, consumer products, telecom, auto and so on. This is the category of advertisers that is going to help the industry grow. So, we are seeing huge traction in these categories and are seeing emphatic growth. I am confident this trend will continue till we hit the Rs 1,000-crore mark by 2011. We are sighting 2011 as the year for Internet advertising maturity in India and I guess it will have ‘matured’ by then.”
Disagreeing with that, Kejriwal added, “I would say that in any country if the ad network is around 50 per cent of the market, only then can it be called matured. It has not happened in India so far because we do not have too many niche and specialised sites. Horizontals are collapsing and verticals are deepening and that is what is happening in the industry.”
Nair pointed out, “The market is slowly maturing and ad networks will sooner than later become a mainline Internet media vehicle. This is evident by the fact that more and more clients are testing out ad networks as part of their online media plans, and also the entry of some of the larger US ad networks into the country. We see this space gathering momentum furiously in the next one year or so. We also feel that sound technology, quality of inventory and a focus on advertiser RoI is what will differentiate one network form another.”
According to Goel, “The ad networks in India are most certainly far from maturity, nevertheless, today they are part of every business plan. In markets like the US and Europe, ad networks are already matured, and in some ways ad networks in India are roughly 7-8 years behind the US. Currently, the ad networks are roughly about 5-7 per cent of the online advertising market.”
Advertisers and media planners are always looking for better advertising opportunities, so an ad network doesn’t only provide an advertiser reach, but also gives them media planning tools given the depth of information an ad network gathers by displaying ads on sites. While ad networks in India still have a long way to go before reaching maturity, this space is seeing a rapid growth.
To be continued…