Indian ad network market not mature enough to support verticals

Indian ad network market not mature enough to support verticals

Author | Robin Thomas | Tuesday, Apr 07,2009 8:28 AM

Indian ad network market not mature enough to support verticals

After the emergence of various horizontal or general ad networks in India, it is time for vertical ad networks to claim their share of the ad pie too. One of the reasons why vertical ad networks today are gaining popularity is because they are essentially focussed on their content and not scattered, therefore, they directly communicate to their audience.

For instance, Inviziads, an in-game ad network by Games2win, focuses directly on the gameplay, while Capital 18-funded vertical ad network,, in February 2009 launched its shopping category with six websites for its other verticals – travel, women, technology, news, social conversational media, business, and health.

Ironically, Internet penetration itself is very low in India. According to the Pitch-Madison Media Outlook 2009 report, the year 2008 saw new media expand to reach Rs 363 crore, claiming around 1.7 percent of the total ad pie.

Industry players believe that although the ad networks in India are growing, they are far from mature and did not really support the vertical ad network business model. The good news, however, is that thanks to the current economic scenario, brands are looking for accountability, and vertical ad networks are said to be 100 percent transparent.

So, are vertical ad networks the need of the hour? Does the online advertising market support vertical ad networks? exchange4media speaks to industry honchos to find out more.

How they see it

According to Viraj Malik, CEO & Managing Director, Percept Knorigin Solutions Pvt Ltd, “Internet as a media is more accountable and performance-oriented compared to any other media, whether it's vertical ad networks or horizontal performance, and where accountability is required. I think the need of the hour in India is more vertical quality content. We use vertical targeting within our publisher base to better yields for both advertisers and publishers. I believe the market has not evolved for a pure play one vertical specific ad network. We have more than 30 demographic verticals in our ad network and we cannot survive if we just focus on one specific vertical.”

Rammohan Sundaram, Founder, CEO and Managing Director,, observed, “Need of the hour is not vertical ad networks, but to understand the advertiser’s business needs and then provide him with a solution, and vertical ad networks can do that better than anyone else in that space. Therefore, if this means that vertical ad network is the need of the hour, then so be it.”

He further said, “Online advertising space is bound to grow with or without vertical ad networks, because the online medium has now started being a core area of focus in many organisations, and so I have no doubt that it is going to grow by leaps and bounds in the next 2-3 years. Vertical ad networks are just going to be one contributor to the entire scheme of things.”

Alok Kejriwal, Founder and CEO, Games2win, noted, “Vertical ad networks thrive only when there is a large depth of sites or publishers that can support a vertical. For instance, there are very few shopping verticals or travel and gaming verticals. So, in a country with 30-40 million unique users across 10 or 12 genres of sites, it is very difficult to create a vertical ad network site. In fact, the industry cannot flourish unless there is a depth within the vertical.”

“It allows the brands to get to their target audience very fast, therefore, it is more laser-focused. Vertical ad networks are an important aspect of maturing of the Internet ad industry, but it has to be brought in supplementary horizontal and it cannot be a medium in itself right now,” he added.

Does the market support verticals?

Percept Knorigin’s Malik noted, “My personal view is ‘no’, it would take a few years before pure play vertical ad networks can be successful, we need to wait for a more evolved ecosystem of advertisers and development of niche vertical content. I can see few experiments happening in gaming, travel and other verticals. I guess they have to wait before they start seeing flurry of advertisers.”’s Sundaram pointed out, “Markets are created and a smart marketer knows where his market lies and how to create it, we believe that we have created a space for ourselves well enough to get on to a growth path we have chartered for ourselves. It only shows that there exists a market. Now, is the market mature? However the ad network market has not matured yet, to support verticals, nevertheless, it will take another 2-3 years for it to get to some scale in terms of demand coming closer to that of supply.”

Games2win’s Kejriwal observed, “No, the market is not matured to support even a basic ad network. Other than Google, there are very few ad networks that have come to life. In a nation like India, we cannot have merely two or three ad networks, but instead, we need to have at least 30-40 ad networks. It’s all about penetration and usage for it to mature, we need at least 100 million users for ad networks to flourish in India.”

Trends in 2009-10

Malik added, “I think a lot of consolidation has happened in this space in the last two years in the international market. In India, it is yet to happen. I probably would see some consolidation in 2010. I would also love to see a formidable technology that can challenge the contextual key word based targeting, which Google offers. Maybe 2010 could be a good year where some innovation happens in this space.”

Kejriwal noted, “I see far more information gathering on consumer behaviour now as digital is more accountable. During the time of slowdown, the more deliverable we can get to the advertisers, the bigger and better it is. So, what I believe will happen is they are going to spend a lot of money in tracking user behaviour and then plough them back into getting more relevant ads.”

Sunderam of Networkplay said, “I am sure we will see a lot of innovation and traditional brands coming online and that would propel the growth of the industry on the whole. The scope is large simply because it differentiates what technology hasn’t mastered to do yet. Segmentation of audience is critical to understand SEC profiling, purchase power and so defining target audience clearly.”

The ad network market in India is less than 10 percent, which can only grow with greater penetration of the Internet. Currently, the other set of challenges before ad network companies are the rise in publishers launching their own ad networks. Nevertheless, ad network companies believe that no publisher would serve any purpose to the advertiser by restricting the buyer to one or two sites.

On the other hand, while vertical ad networks do have scope, they are very few in number, hence, it first needs to deepen itself and allow the online advertising market to mature, which would take another couple of years before it can support the verticals. But once that happens, vertical ad networks will grow in leaps and bounds.

Tags: e4m

Write A Comment