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Online ad revenue to touch Rs 350 cr by 2009, finds survey

14-September-2005
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Online ad revenue to touch Rs 350 cr by 2009, finds survey

Online advertising revenue growth in India is showing all the signs of revival in line with the international market. According to a study conducted by estatsindia, an Internet research and consultancy firm, online ad revenue will rise to Rs 150 crore this year, up from Rs 120 crore in 2004. The figure might even touch an estimated Rs 350 crore in 2009, more than 100 per cent rise over the 2005 estimate, according to the report.

Consumer advertisers continue to represent the largest category of advertisers, accounting for 69 per cent of 2004 annual revenues, up from the 40 per cent the year before.

The largest categories under the consumer umbrella include retail, automotive, leisure, entertainment, and packaged goods. Of the total revenue in 2004, computing and financial-services accounted for 22 per cent and 20 per cent, respectively, with telecom and pharmaceutical and health care rounding out the total at 4 per cent and 6 per cent, respectively.

According to the report, in 2004-05, the B2C (Business to Consumer) market stood at around Rs 700 crore. The market is expected to grow at a CAGR of 43.91 per cent to touch Rs 5,499 crore by the end of 2009.

E-travel, including the railways, airlines (domestic and international), no-frills airlines, hotels, e-tours and travels, constitute the biggest segment in the B2C sector in terms of revenues at Rs 550 crore.

In case of the B2B, the market stood at Rs 1,600 crore in 2004-05 and is expected to grow at a CAGR of 55.55 per cent to touch Rs 23,710 crore by the end of 2009.

In the B2B category, Small and Medium Enterprises (SMEs) are considered to be the real growth drivers. The largest revenue earner in the B2B segment is e-procurement, which would soon see more players entering this space, the report envisaged.

P2P business models, which have grown very slowly in the Indian market space, were estimated to be of the size of around Rs 50 crore in 2004. “Out of the various segments, the digital media P2P space shows the largest pie of the total market space. This is an area showing very promising growth as far as P2P revenues are concerned,” Vikram Bhardwaj, CEO, estatsindia, said. However, with cyber laws still shaping up in India, the P2P market space still had a long way to go, he added.

Mobile commerce (m-commerce), which is still at a nascent stage in India, stood at around Rs 90 crore in 2004. This includes revenues of the lead portals providing such services as well as few other players like Air Deccan.

“M-commerce services, however, have still to grow along the learning curve and will soon evolve from basic information based SMS services to services like mobile ticketing,” said Bhardwaj.

“The e-trends established in the report sets an agenda for the future research on e-commerce and its related aspects in India. The report successfully elucidates the most popular business models and a revenue model on Internet in India today,” Bhardwaj said.

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