Search and display ads continue to command high ad spends

Advertisers bet big on search and display ads, a trend which is likely to continue in the evolution of online advertising in India, say experts

e4m by Ankur Singh
Updated: Sep 8, 2014 7:52 AM
Search and display ads continue to command high ad spends

According to recent estimates, more than 227 million Indians use the digital medium to do just about everything – listen to music, watch a TV show, cricket or a film, book tickets and restaurant tables, buy, sell and socialise on computers, tablets, phones and other devices. A reason why the medium is finally making significant revenues and taking its well-deserved place in the heart of all marketing plans. It is also helping brands understand their advertising campaign’s popularity and success in real time.

Shikher Gupta, Head- Digital Marketing, Videocon Industries, said, “Consumers are gradually spending more time on digital mediums and advertisers have no other option but follow the consumers. Our focus is our consumer. Today, we interact with our consumers everywhere, be it Facebook, Twitter, Review sites, Search or Display. Digital is a significant part of our annual projections.”

The latest report to validate unofficial projections of the rapidly-growing digital industry is the ‘Digital Advertising in India’, jointly published by the Internet and Mobile Association of India (IAMAI) and IMRB International.

According to the report,“the online advertising market in India is projected to reach Rs 3,575 crore by March 2015, with an annual growth rate of 30 per cent. The online advertising market was pegged at Rs 2,750 crore in March 2014.” The report pegs 
digital ad spend on mobile devices at 14 per cent, whereas on desktops and laptops at 86 per cent. The growth in e-commerce industry and its ad-spend in digital media is the highest, contributing close to 20 per cent, followed by telecom and FMCG and consumer durables. The digital ad spends by the e-commerce industry has been growing at a CAGR of 59 per cent since 2011 and stood at Rs 495 crore at the end of March 2014.

Top drivers

Currently, search and display are the top two contributors to the total digital advertisement spends in India. Of the Rs 2,750-crore market, Search ads constitute 38 per cent, display ads contribute 29 per cent and social media contributes about 13 per cent  of the overall ad spends.

“Search happens when someone has a need and is looking to fulfill it. It is natural for brands to pursue search advertising. As far as display is concerned, it will slowly merge with Social as more and more display platforms want consumers to be able to interact, reducing the gap between social and display,” pointed out Gupta.

According to Navninder Singh, Head – Digital Marketing, AkzoNobel India, more brands rely on Search as it targets the intenders and shows a direct correlation between clicks and intended action brands wants users to take - be it purchase or sign up. “Display ads help build brand awareness and contribute to the likelihood of users clicking on search ads. Display ads are the first touch point with users and drive them further in the consumer journey,” he added. 

Despite its popularity, marketing budgets for social media in the country are quite slim.  “The Asia-Pacific social media marketing budgets are just about two per cent. This has doubled in the past 12 months. But, we are looking at a 98 per cent possibility,” said John Kerr, Managing Director, Zeno Asia. Pinning his hopes on the growth of the digital medium Kerr added, “Digital across the region is about 24 per cent, up from eight per cent two years ago. But a vast majority of that 24 per cent is going into banner ads. Who clicks on a banner ads? People just skip them. There remains a massive difference between consumption of media from a consumer’s perspective, and investment in the right types of media from a marketing perspective. And, I think this will change.”

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