Online Display Advertising India

December 2009

Research conducted by:

Research conducted for:

 TABLE OF CONTENTS
1.0 EXECUTIVE SUMMARY 4

2.0 RESEARCH METHODOLOGY 6

3.0 ONLINE ADVERTISING MARKET IN INDIA 7

3.1 MARKET SIZE 8

3.2 QUARTERLY DISTRIBUTION OF REVENUES 9
3.3 BREAK UP OF MARKET BY VERTICALS 10
3.4 GROWTH IN VALUE OF VARIOUS VERTICALS 11

4.0 GLOBAL ADVANCEMENTS IN ONLINE DISPLAY ADVERTISING 12

4.1 GLOBAL ONLINE DISPLAY ADVERTISING MARKET SIZE 12

4.2 IAB GUIDELINES FOR GAUGING PERFORMANCE OF DISPLAY ADVERTISEMENT 13

5.0 UNDERSTANDING AN INTERNET USER 15

5.1 DEMOGRAPHIC DISTRIBUTION OF USERS 16

5.2 ONLINE ADVERTISEMENT FOR DIFFERENT PRODUCT CATEGORIES 17
5.3 SEARCHED FOR INFORMATION AFTER WATCHING THE ADVERTISEMENT 18
5.4 PRODUCT PURCHASED 19
5.5 CONVERSION FROM VISIBILITY TO PURCHASE OF ONLINE ADVERTISEMENTS 20
5.6 PROBLEM SEEN BY INTERNET USERS IN ONLINE ADVERTISEMENTS 21

6.0 ONLINE ADVERTISING IN SME 22

6.1 AWARENESS AND USAGE OF ONLINE ADVERTISEMENTS AMONGST SMES 23

6.2 BARRIERS FOR USING ONLINE ADVERTISEMENTS AMONGST SMES 24

7.0 EMERGING TRENDS IN ONLINE DISPLAY ADVERTISING MARKET 25

7.1 “PERFORMANCE BASED” ONLINE DISPLAY ADVERTISEMENTS 25

7.2 INTEGRATING INTERNET ADVERTISING IN MARKETING CAMPAIGNS 26
7.3 IMMERSIVE FORMATS FOR INTERNET ADVERTISING 26

8.0 ENDNOTE 28

2
3
1.0 Executive Summary

As media vehicles continue to fragment and mesh within each other, marketers need to
understand the implication of various parameters guiding this fragmentation basis the
consumer behavior. The challenge for a marketer is to have a deeper understanding of
every media vehicle so that they can selectively target right customers for their
message delivery.

Internet has opened up a lot of opportunities for marketers for targeting customers in
interactive and measurable ways. Online advertising helps to target specific customer
segments and gather information across geographical boundaries in a cost effective
manner. Online advertising helps in not only leading visitor to a publisher‟s site but also
creating awareness which potentially could result in gradual brand building. This report
aims to map the size of online display advertising in India. The report charts detailed
behavior of Internet users and small-medium enterprises in the online display
advertising market in India. The report is based on an extensive research conducted by
IMRB International and supported with industry feedback.

Findings of the report show that size of the online display advertising market has
reached INR 3250 Million for FY 2008-09 registering a significant growth rate of 38%
and is expected to surge at INR 4300 Million for FY 2009-10. The study reveals the fact
that online publishers (26%) remain major contributors of this market while there is a
sharp decline in the contribution of the BFSI sector (25% to 17%) this year. In addition,
FMCG sector and mobile handset manufacturers have adopted this form of advertising
as an effective tool to target Internet users in the age group of 18-24 years, who are the
growth drivers of the Internet in India.

Online display advertisement has consistently formed a sizeable portion of overall

online advertisement market. It has continued to be an effective long-term option for
digital marketers in targeting customers with specific characteristics. Although the share
of other options such as search engine marketing may assume larger proportions over
4
time, display advertisement will continue to command a substantial part of this
spending. Recent financial debacle in the US and its ripple effect on the Indian economy
has resulted in differences in the market dynamics compared with previous years.
However, increase in the Internet user base, extensive usage of Internet by political
parties for elections and usage of Internet for advertising by SMEs are the factors
strongly supporting for sustained growth of online display advertising market in India.

5
2.0 Research Methodology
The research team at eTech Group | IMRB, a specialist unit of IMRB International
adopted a mix of primary as well as secondary research for this report. Given below is
the research methodology used for the report:

 In-depth discussions with the key players in the

online display advertising industry

 Detailed questionnaire was designed to get insights

on the market size of online display advertising
industry

 Relevant data points were culled out from ‘I-CUBE

2008’ reports, an annual syndication of eTechnology
group, IMRB International

 This is based upon primary survey covering 20,000

Households, 90,000 individuals, 1000 SMEs and 500
cyber cafes

 Secondary research was done using information

from various published resources and other research
bodies to triangulate with our findings

6
3.0 Online Advertising Market in India

Figure 1: Growth in the Active Internet User Base in India

(All figures are in Million. Source: I-Cube2008, Annual IMRB Syndication)
57
((All figures are in Millions. Source:
50 I-Cube2008, Annual
IMRB Syndication) 46
) 42
36
32.2 32

21.1
16.4
11.9 11.2
8.7 7.5
4.9 4.3 5.5
2.2 3.3

2000 2001 2003 2004 2006 2007 Mar-2008 Sept-2008 Mar-2008

(Est.) Rural

Claimed Internet User Active Internet User

The graph above illustrates the growth in Internet user population in India over the
years. The Internet penetration findings are based on I-Cube 20081 which is an annual
research syndication conducted by IMRB International. India has witnessed continuous
growth in the Internet adoption in certain sections of society - predominant patterns exist
mostly in urban areas. Across all urban areas, there has been an increase in the
number of Claimed2 as well as Active3 Internet users. Further with increased
penetration in less affluent classes of the society, Internet has started to reach the
bottom of the pyramid.

1
Internet in India (I-Cube) reports are based on a primary survey conducted across 30 cities - among 20,000 Households, 90,000
individuals, 1000 SMEs and 500 Cyber Cafes. To extend the scope of this study, we have carried out this research across 100
rural centers to understand Internet behaviour in rural areas.

2
Claimed Internet User is an individual who has used the Internet at any point in time in past. This gives us a clear indication as
to how many Indians have experienced Internet at least once in their lifetime.

3
Active Internet User is an individual who has used the Internet at least once in the last 1 month.
7
With nearly 0.6% of penetration in the total population, there are 3.3 Mn Active Internet
users in rural India. Non-Government Organizations (NGOs), GOI initiatives, community
service centers and CSR activities by private companies have played a significant role
in ensuring this penetration.

3.1 Market Size

The below figure illustrates the growth of online display advertising market in India. In
the financial year 2007-08, the size of this industry was at INR 2350 Million. During the
year 2008-09, the industry grew at a high rate of 38% reaching INR 3250 Million. Based
on the primary research conducted in this study, it is expected that the industry will grow
at a lower rate at 32% and will grow to INR 4300 Million.

Figure 2: Online Display Advertising Market (INR Million)

38%

4300
3250
2350

32%

FY 2007-08 FY 2008-09 FY 2009-10

The ad spent per user, shown in Figure 3, is a function of the total display advertising
market and the Internet user base in India. The online display advertising spent per user
in India is INR.65 which is very less compared to the other developed countries.
Understanding the impact of economic downturn and it effect on budget allocation for
marketing activities, online Ad spends per user is expected to increase marginally to
INR.68 for the next year.

8
 Figure 3: Ad Spent per User (INR)

(Conversion: 1 USD = 50 INR)

65 68

2008-09 2009-2010

3.2 Quarterly Distribution of Revenues

Distribution of revenues across the year in various quarters follow a particular trend with
maximum revenues recorded for first and third quarters of the financial year 2008-09.
The growth in the first quarter was largely influenced by continued growth in the past
years. With the skepticism of the economic downturn, online advertisement spends
reduced in the second quarter. In the third quarter, due to holiday season and festivals
online expenditure grew to 27%. There seems to be an overall reduction in marketing
spends in the last quarter. However, some sectors such as telecommunication and
automobile seem to have regained their momentum.

Figure 4: Quarterly Distribution of Revenues

April to June
26%

23% July to September

24% October to December

27%
January To March

9
 3.3 Break up of Market by Verticals

Figure 5: Industry Breakup of Online Display Advertising

Spends
2008-09 2009-10

(Market Size INR 3250 Million) (Market Size INR 4300 Million)

2%
2% 4% 4% 2% 15%
4% 17%

BFSI
Auto 25%
9%
FMC G
9%
26% C onsumer Durables
IT / Telecom
Education

10% Online publishers

Electronic Media 11%
Print Media 8%
8%
6% 8% Others
16%
15%

The figure above shows the percentage distribution of different industry verticals
contributing to the online advertising market. With the recession in the US economy and
its global effect, there is a sharp decline in the contribution from the BFSI sector to the
market and is expected to decline further in the year 2009-10. This decline pertains to
foreign banks that have operations in India and extensively use online medium for
targeting HNIs and businessmen.

Online publishers are the major contributors to online advertising market with 26% of
the revenue from this industry vertical. This is attributed to the available platform as well
as easy accessibility to the target audience, which in turn, helps them to become key
influencer. Their share is expected to remain static or decline in smaller percentage in
upcoming year. Online spending by political parties, general merchandise companies
and real estate players which are categorized as “Others” formed 4% of online
marketing spend in the financial year 2008-09. These expenditures are expected to fall
to 2% in the next financial year.

10
3.4 Growth in Value of Various Verticals
The graph below shows the value in INR Million and growth of the various verticals in
the online display advertising market. Of these industry verticals, Education and Print
media are expected to grow at the rate of 76%. There is a sharp decline witnessed in the online
advertising spend from BFSI sector because of financial debacle over the last year.

Following this, automobile sector is expected to show the second highest growth rate
(46%) with increase in the product launches and emergence of Internet as the effective
medium to target youth who constitutes the major chunk of Internet user base in India.
With lot of information available online and introductions of the websites where you can

Figure 6: Growth in Online Advertising in INR Million (FY 2008-09 and FY 2009-10)

76% 76%

46%
40% 41%
32% 32%
27% 1075

17%
845
688
645
553

488
473
387

344

344
325
276

-31%
260

195

172
130

130
49
86

90
B FSI A uto FM CG Co nsumer IT / Teleco m Educatio n Online Electro nic P rint M edia Others
Durables publishers M edia

FY 2008-09 FY 2009-10 % Growth

compare the features, prices of various vehicles it offers great help to the prospects for
taking purchase decision.

11
4.0 Global Advancements in Online Display Advertising

4.1 Global Online Display Advertising Market Size

Based on the reports published by Internet Advertising Board (IAB), the aggregate
online advertising revenue in the US has reached INR 1172 Billion in the year 2008.
This revenue has been growing exponentially in past years. However, due to recent
downturn the growth has been a little lower. Of this aggregate revenue, online display
advertising comprising banner ads, sponsorship links, rich media and digital video
amount to 32% (or INR 375 Billion). On the other hand, search advertising commands
45% of this share. The latest estimates for Europe market has not been made available
by IAB yet. The previous reports have indicated that the European market stands at INR
872 Billion for the year 2007.

Figure 7: Aggregate Online Ad Revenue – Europe and USA

(INR Billions)

1131 1172

900 872

562

2006 2007 2008

USA Europe
Source: IAB Internet Advertising Revenue Report – March 2009
& IAB Europe AdEx 2007

Figure 8 below, illustrates the Online spends per user in developed countries like USA
is INR 7165 of which INR 2293 is spent on online display advertising per user (i.e. 32%
of the Total Online Advertising Spend). This is far higher than the online display
advertising spent in India which stands at INR 65. The online display advertising spend
per user in India is still lower compared to other European countries.
12
 Figure 8: Online Ad Spends per user across various countries
(INR)
10380
9415
8535
7165
6265 5930
5065
3835
3290 2975 2890 2875

Norw ay UK Denmark USA Sw eden Germany Netherlands Belgium Finland France Austria Italy

Source: IAB Europe Ad Ex 2007/PWC

4.2 IAB guidelines for gauging performance of Display Advertisement

As witnessed earlier, there are numerous forms of online display advertisements that
can be used to convey messages by marketers. The consequence or users‟ reactions
on these advertisements are not completely known. Continuously, standards are being
devised as well as initiatives undertaken to arrive at the most appropriate method of
measuring the performance of various forms of digital advertisements. Interactive
Advertising Bureau (IAB) (http://www.iab.net), which comprises media and technology
companies, shares best practices and charts measurement guidelines.

The bureau is focused on including participants from the US and Europe. It is expected
that the guidelines charted out by the bureau can be utilized in Indian markets to gather
an in-depth understanding of online display advertisements. Based on the evolution of
online advertisements, IAB has charted out guidelines for different types of impressions
displayed to an Internet user. These guidelines are exhaustive and include search,
display as well as interactive rich advertisement displays.

13
The most dominant forms of measuring effectiveness of an online advertisement have
been the formulation of a price on click or viewing of it, illustrated in Figure 9 below.

Figure 9: Various Performance Measures

To be exhaustive in measuring performance of any medium, it is imperative to evaluate

the “reach” as well as “effect” criteria – or in simpler terms, look for forest as well as
count the trees. Using “reach” criterion, the extent of online advertisements can be
examined while through “effect” criterion; user‟s reaction post witnessing an online
advertisement can be discerned. In its latest release, IAB has proposed guidelines for
audience reach measurement as well as through rich applications which are the
emerging options for online display advertisement.

14
5.0 Understanding an Internet User
The effectiveness of the online advertising is based upon targeting the right customers
in a cost effective way. Today, most of the websites are loaded with different forms of
advertisements to enable advertisers for conveying their message regarding their
products/services. I-Cube 2008, annual syndicated study for tracking Internet usage
characteristics in the country, examines the orientation of users towards online
advertising. Internet users in their online purchase decision get influenced by their
exposure to various kinds of online display advertisements. This section charts out the
product purchase behaviour of a user post visibility of online advertisement to the final
product purchase.

Figure 10: Recall of Different Types of Online Advertisements

Banners 50%

Streaming
29%
videos

Sponsored
23%
links

Flash
23%
videos

Pop-ups 23%

Base: 1.8 Mn Active Internet users who have clicked on online Advertisements
(Source: I-Cube 2008, Annual IMRB Syndication)

Of the different types on online display advertising, online banners record the highest
recall of 50%. 29% of the 1.8 Mn Active Internet users were able to recall streaming
videos which they had seen in past. With improvement in the infrastructure and
reduction in the hardware prices there is higher possibility of using streaming videos as
an effective method for online advertisement. The lowest recall percentages (23%) are

15
for pop-ups, flash videos and sponsored links. While sponsored links are not apparent
on a website, pop-ups and flash videos are often blocked by browsers.

5.1 Demographic Distribution of Users

Growth of Internet in India is predominantly driven by youth i.e. users in the age group
of 18-35 years. With higher adaptability to the technological changes, users in this age
group are using different applications available on the Internet. As witnessed in the
following graph, College Going Kids and Young Men form 60% of users who have
clicked on online advertisements followed by older men and school going kids.

Figure 11: Demographic Distribution of Users who have

clicked on an Online Display Advertisement

3%
8% 10%

School Going Kids

College Going Student

19%
Young Men
30%
Older Men

Working Women

Non-w orking Women

30%

1.8 Mn Active Internet Users who have clicked on online display advertisement
(I-Cube 2008, Annual IMRB Syndication)

16
5.2 Online Advertisement for Different Product Categories

Base: 1.8 Mn Active Internet users who have clicked on online advertisements

Online advertisement for different product categories Percentages

Mobile Phone/Instruments 58%

Ads for Loans by Banks/Financial 50%
Entertainment Sites 42%
Ads for Job Sites 40%
Investment options like Mutual Funds 39%
Education/Training related 37%
Computer/Laptop/Printer/Scanner 38%
Air Tickets Ads 35%
Personal Products 28%
Insurance Ads 28%
Hotels & Holiday Tours/Packages 25%
Automobile Ads 23%
Matrimonial Advertisements 20%

(Source: I-Cube2008, Annual IMRB Syndication)

The above table shows the list of categories for which display ads were „clicked‟ by the
Internet users. Category of ads related to mobile phones and devices are most
frequently clicked by active Internet users. As youth in the age group of 18-35 years
form a substantial proportion of Internet users, advertising such devices over the
Internet is a viable option. This is followed by advertisements for financial products,
travel and automobile. Further, with the increase in the popularity of online portals for
travel, entertainment and jobs there is significant proportion of visibility seen for
advertisements from this area of operations.

17
5.3 Searched for Information after Watching the Advertisement

Base: 1.8 Mn Active Internet users who have clicked on online advertisements

Information Searched Percentages

Investment options like Mutual Funds 13%
Ads for Job Sites 8%
Mobile Phone/Instruments 6%
Education/Training related 6%
Entertainment Sites 4%
Air Tickets Ads 3%
Computer/Laptop/Printer/Scanner 3%
Personal Products 3%
Ads for Loans by Banks/Financial 1%
Automobile Ads 1%
Insurance Ads 1%

(Source: I-Cube2008, Annual IMRB Syndication)

Online advertisements play an important role in generating awareness as well as

building branding among users regarding different product categories. Maximum
number of users searched for information for the product like mutual funds after
witnessing online advertisements. Online advertisements related to the job sites as well
as mobile phone/instrument have high rate of persuasiveness. In contrast, online
advertisements for products like matrimonial and tour packages seem to have the least
influencing power leading to the lowest information search.

18
5.4 Product Purchased

Base: 1.8 Mn Active Internet users who have clicked on online advertisements

Products Purchased Percentages

Investment options like Mutual Funds 38%
Air Tickets Ads 18%
Education/Training related 15%
Ads for Job Sites 12%
Mobile Phone/Instruments 7%
Personal Products 5%
Ads for Loans by Banks/Financial 3%
Automobile Ads 2%
Insurance Ads 2%
Computer/Laptop/Printer/Scanner 2%
Entertainment Sites 1%

(Source: I-Cube2008, Annual IMRB Syndication)

The above table shows the number of Active Internet users who have purchased
product after clicking on the Online Display Advertising. Across all product categories,
investment options like Mutual Funds have recorded the highest online purchase after
clicking on the online advertisement. This could be due to the online banking facilities
like online trading, online banking facilities offered by financial institutions. Convenience
and higher discounts act as major drivers for higher purchase of air tickets using online
travel sites. Online display advertisements related to matrimonial seems to generate
almost none or minimal impact in enticing Internet users to look for information or buy
products.

19
5.5 Conversion from Visibility to Purchase of Online Advertisements

Base: 1.8 Mn Active Internet users who have clicked on online advertisements
Clicked Searched for Product
Product Categories
Online Ads Information Bought
Mobile Phone/Instruments 58% 6% 7%

Ads for Loans by Banks/Financial 50% 1% 3%

Entertainment Sites 41% 4% 1%

Ads for Job Sites 40% 8% 12%

Investment options like Mutual Funds 39% 13% 38%

Computer/Laptop/Printer/Scanner 37% 3% 2%

Education/Training related 37% 6% 15%

Air Tickets Ads 35% 3% 18%

Personal Products 28% 3% 5%

Insurance Ads 28% 1% 2%

(Source: I-Cube2008, Annual IMRB Syndication)

The above table shows the number of users who have clicked on an online display
advertisement which has led to the product purchase across product categories. The
maximum conversion from visibility to the purchase is observed for investment options
like Mutual Funds followed by Air Ticket advertisements and advertisements regarding
Education/Training. In addition to this, these product categories draw higher customer
involvement leading to higher number of users searching online information after
witnessing an advertisement. Although, irrespective of higher visibility online purchases
for Insurance products are lower. This shows that function of online advertisements is
to create awareness while traditional method of selling these products through financial
advertisers is more preferable for Insurance products.

20
5.6 Problem seen by Internet users in Online Advertisements

Figure 12: Problems seen in Online Display

Advertisement

70%
62%
54% 52%
47%
37% 34%
They present

They do not
irrelevant
comprehensive

likely to make
distracting

They are less

offer a wide
They are
me purchase

I ignore them
information
misleading

Ads are

variety of
They do not

products
information
offer

Base: 1.8 Mn Active Internet users who have clicked on online

Advertisements
(Source: I-Cube 2008, Annual IMRB Syndication)

Active Internet users feel that online advertisements are misleading and distracting. This
could be attributed to reaching not to the exact page where product is advertised but to
the home page of the advertiser after clicking an online display Advertisement. This is
not in accordance with the requirement of the users who are in a search of a good deal
but ultimately leading to the advertiser‟s home page and not to the product advertised.
While 37% of the Internet users state that they ten to ignore ads, however, the corollary
is that quite a few of (66%) feel that online display advertisements serve wide variety of
products and these advertisements are generally not ignored by them.

21
6.0 Online Advertising in SME

Figure 13: Advertising Methods Utilized by SME

44% 45%

34%
31%

23% 23% 23%

21% 22%
15%

8% 8%
6% 6%
2%3%

Newspaper Yellow Pages Magazine/ Internet Out of Home Online Radio Others
Journals (Billboards, Classifieds
Hoardings
etc.)

Advertisement Methods Currently Used Likely to advertise in future

Source: I-Cube 2008, Annual IMRB Syndication

Small-Medium Enterprises4 (SMEs) are keen on advertising in specific geographies

considering constraints regarding the scope of operations and limited advertising
budgets. This might have resulted in the higher popularity for Newspapers, Yellow
Pages and even online classifieds. Interestingly, SMEs are embracing Internet as an
advertising medium including Internet advertising as well as online classifieds with
considerable percentage of awareness and likeliness of usage in future. It has been
witnessed that online advertising has gained acceptance among SMEs in India and
Internet medium is capable of having an impact on the audiences with considerable
percentage of SMES showing likeliness of using online advertisement in future.

4
For the purpose of the study we defined SME as an enterprise with employee strength of 11-250. Only those SMEs
which had either a Head office or a single office in the Top 8 Metros (Mumbai, Delhi, Kolkata, Chennai,
Hyderabad, Bangalore, Pune and Ahmedabad) were considered.

22
 6.1 Awareness and Usage of Online Advertisements amongst SMEs

Figure 14: Awareness/Usage of Online Advertising Options (SME)

74%
69%

44%

35% 33% 31%

27%
22%
20%
14%
10% 10%
7%
3%

Banner Ads on email Marketing Advertisements in Pop-ups Content Based ads Results on search Sponsored search
Portals and other Blogs engine item on a search
w ebsites engine

Awareness of Online Advertisement Methods Present Usage of Online Advertising Methods

Source: I-Cube 2008, Annual IMRB Syndication

Overall, display advertisements are more popular among SMEs compared to the search
engine marketing in India. The highest conversion from awareness into actual usage
exists for Online Banner advertisements followed by email marketing. Few SMEs use
Pop-ups as preferred type of online advertising. Compared to the online display
advertisements there is lower awareness and usage of SEM (Search engine Marketing)
among SMEs. It has been observed that SMEs prefer local search engines for
advertisements and some of these even opt for sponsored search links on these search
engines.

23
6.2 Barriers for Using Online Advertisements amongst SMEs
Figure 15: List of Barriers for Using Online Advertisement

36%
32%

22%
18%
16%

9% 10%

Inadequate Less effective Lack of Lack of Online C onsidered Others

reach awareness expertise for advertising is more intrusive
implementation not relevant to than others
the brand
image/
objectives

Source: I-Cube 2008, Annual IMRB Syndication

„Inadequate reach‟ and perception of Internet as a „Less effective media‟ are the main
barriers preventing SMEs from using online advertising. Lack of awareness among
people and lack of expertise are other important barriers for not using online advertising.

24
7.0 Emerging Trends in Online Display Advertising Market

Online advertising avenues include various web-based options using which brand and
marketing messages get delivered. These options include search engine marketing,
banner ads, rich media, digital video, email marketing, lead generation, classifieds and
sponsored links. Search engine advertising comprises a high proportion of the overall
options due to efficient search engine avenues. Online display advertisement
comprising banner ads, rich media, digital video and sponsored links has relatively large
number of participants but enjoys a limited share in the total spends. There are,
however, inherent differences in these options. Online display advertisement provides a
marketer an option to generate awareness which in turn will result in brand-building in
long run. Meanwhile through search advertising a marketer can generate leads in a
short span of time. Search engine marketing provides a distinct advantage of enabling a
marketer by providing complete control over a campaign with selection of keywords and
the ability to place the advertisements on the selected websites while the same does
not hold true for online display advertisements

7.1 “Performance based” online display advertisements

The yardstick to measure the effectiveness of online advertisement has evolved from
mere number of impressions to the customer acquisitions leading to performance based
advertisements. This trend is very much apparent in India where in pricing for online
advertising campaigns are frequently measured against the performance. In some of
the recent examples seen, the display advertising is evolving to deliver performance
and leads similar to the ones delivered by search marketing. There are transactional
banner systems5 emerging which enable users to purchase products and services via
banner without visiting the vendor‟s website. This service has generated better
response rates compared to the traditional banner for some of the clients.

5
http://www.bizreport.com/2007/07/new_type_of_banner_ad_launched.html

25
7.2 Integrating Internet advertising in marketing campaigns

Recognizing the possibility of using Internet as an effective tool for targeting niche
audiences, innovative perspectives are being practiced by established and traditional
institutions. During the recent US Presidential elections, Barak Obama's team ensured
that the campaign had a strong presence on social networking sites such as Facebook,
MySpace and LinkedIn. Through such presence, Barak Obama ensured he maintained
a two-way interaction with his electoral.

In the recent general elections in India (early 2009), many Indian politicians considered
Internet as a useful platform for interactive political communication especially with
youth. Indian National Congress party used sites like YouTube and Facebook to
execute web-based social marketing campaigns. With 50 Million Internet users in Urban
India and majority of them in the age group of 18-24 years, Internet was found to be an
effective tool to engage with them. Bhartiya Janata Party (BJP) launched a website
LKAdvani.in for its prime ministerial candidate Lal Krishna Advani. Further, both the key
parties (Congress as well BJP) teamed up with top Internet companies for spreading
their campaign messages over the Internet.

Apart from the political general elections, several brands have started integrating
Internet as part of their communications. The key ones to do so in 2009 include Tata
Tea, Nike, Nokia, Perk, Vodafone, Airtel, etc.

7.3 Immersive formats for Internet Advertising

The advancement in the technology is leading to the development in the area of online
display advertisements allowing display advertisements to become more immersive,
interesting and useful. Thus combined with the traditional advantage of delivering
contextual messages at the right time, with the emerging technologies, the marketers

26
can now allow their target audience to indulge into an in-depth brand experience. Thus
with the advancements in the space the

Expandable Banner:

Expandable banners which use a new technology that allows the banner to expand
when the user rolls over them. These banners are fresh, exciting, compelling and highly
interactive to the viewer. They can deliver a story with a mouse over or give an enticing
hint to what users can expect when they click on the banner and led to a micro-site.
Most of the portals have already adopted these for inventory on their home pages.

Augmented Reality (AR):

AR will offer different various advantages for different forms of online display
advertisement in future. The goal of augmented reality is to add information and
meaning to a real object or place. Unlike virtual reality, augmented reality does not
create a simulation of reality. Instead, it takes a real object or space as the foundation
and incorporates technologies that add contextual data to deepen a person‟s
understanding of the subject. Augmented reality is designed to blur the line between the
reality the user is experiencing and the content provided by technology. Augmented
reality adds graphic, sound and smell to the virtual world as it exists in the real world.

Technological development in the field of AR is leading to the acceptance of this

technology in various marketing activities. Of these, usage of AR is predominantly
witnessed in the field of advertising. Large corporate like P& G, IBM have used AR in
their latest advertisements6. IKEA PS, dealer in household furniture has offered mobile
augmented reality solutions which enable users to imagine how this furniture would fit in
their houses7.

6
http://funkadelicadvertising.blogspot.com/2009/09/top-10-augmented-reality-adveritising.html

http://www.itvt.com/story/5315/procter-gamble-use-augmented-reality-make-print-advertising-interactive
7
http://www.mobiadnews.com/?p=3829

27
8.0 Endnote

Over time, the online advertisement space is expected to change its composition.
Presently, search engine marketing has a fairly high share of this space which is glaring
in matured markets. Display advertisement, however, will continue to hold its share due
to its distinct advantages such as ensuring long-term impression of a brand, a higher
possibility of interactivity and delivering rich media messages to users. At the same
time, online publishers and agencies are developing the space to deliver an immersive
brand experience by bringing in concepts like augmented reality.

The market is poised for huge growth, specially considering the fact that the traditional
advertisers (FMCG, Consumer Durables, etc.) still form a small proportion of the overall
online display advertising market in India . Further, the medium has a high viability for
opening up a new segment of buyers altogether – the SMEs which form a substantial
chunk of businesses in India.

In order to grow the market, the online display advertising industry in India needs to
develop globally accepted performance measures that also cut across various other
media vehicles like television, print and radio. This would allow true media meshing.
With the distinct advantage of online in terms of the number of hours spent online,
immersive experience that online can offer and the contextual delivery of messages,
online advertising is bound to emerge a winner.

Further, the online publishers need to continue developing better user experiences so
that online ads are not seen as a nuisance, rather are sought after.

All in all there are exciting times ahead for the online display advertising in India.

28
 About eTech Group | IMRB
eTech Group | IMRB (a specialist unit of IMRB International) is a research based consultancy offering
insights into IT, Internet, Telecom & emerging technology space.

Our continuous link with industry and a constant eye on the pulse of the consumer ensures that we can
decode the movements of technology markets & consumers. To our clients we offer an understanding of
the present market environment and a roadmap for the future.

Contact Details: Research team for this report:

eTech Group | IMRB Balendu Shrivastava, Group Business Director

IMRB International Tarun Abhichandani, Insights Director

„A‟ Wing, Mhatre Pen Building Rohit Gangwal, Research Manager

Senapati Bapat Marg, Mumbai

Tel : (91)-22-24233902 Contact us:

Fax: (91)-22-24323900 balendu.shrivastava @ imrbint.com

www.imrbint.com

About Internet and Mobile Association of India (IAMAI)

The Internet & Mobile Association of India (IAMAI) is a not-for-profit industry body registered under the
Societies Act, 1896. Its mandate is to expand and enhance the online and mobile value added services
sectors. It is dedicated to presenting a unified voice of the businesses it represents to the government,
investors, consumers and other stakeholders. The association addresses the issues, concerns and
challenges of the Internet and Mobile economy and takes a leading role in its development. The
association‟s activities include promoting the inherent strengths of the digital economy, evaluating and
recommending standards and practices to the industry, conducting research, creating platforms for its
members, communicating on behalf of the industry and creating a favorable business environment for the
industry. Founded in January 2004 by leading portals in India, IAMAI in the only specialized industry body
in India representing the interests of online and mobile value added services industry.

Contact Details:

Dr. Subho Ray, President, IAMAI

406, Ready Money Terrace, 167, Dr Annie Besant Road, Mumbai - 400 018
Tel : +91-22-24954574 | Fax : +91-22-24935945 | http://www.iamai.in

29
 Published By:
Dr Subho Ray, President, on behalf of Internet and Mobile Association of India,
406 Ready Money Terrace, 167, Dr Annie Besant Road, Worli, Mumbai 400018

30